For the second year in a row, the federal government's annual publishing of national student loan default rates was good news for Michigan.
The default rate for borrowers three years after they had to start paying on their loans dropped from 12.03% to 11.3%, mirroring the trend across the nation.
New federal data show that among borrowers nationwide who entered repayment in 2013, 11.3% had defaulted on their loans by 2015. That is down from 11.8% of borrowers who entered repayment the prior year and 13.7% the year before that. Borrowers are considered in default when they don't pay for 90 days or more.
While the lower default rate among borrowers entering repayment is good news, the total number of borrowers in default has continued to grow and is now at a record 8.1 million — more than the combined population of 38 states, according to a news release from the Institute for College Access & Success.
"It's great that recent borrowers are entering default at a slower rate," said Lauren Asher, president of the group, in a news release. "Yet the escalating number of people in default demonstrates that more must be done to help students avoid and get out of default."
The federal government touted the news.
"The Obama administration has taken unprecedented measures to provide borrowers more options to avoid default, manage their student debt and stay on track to repayment, and to hold institutions accountable for improving student outcomes," said U.S. Secretary of Education John B. King Jr. "Even with progress, however, we know considerable work remains ahead."
Teresa Coleman, 25, of Flat Rock started paying her loans in 2012 after finishing up at Michigan State University. She owed about $20,000 then.
"Some months is hard, and I made a few late payments," she said. "But there's a few more jobs out there, and both my husband and I have been working full-time for the last couple of years, which makes it easier. It was a lot harder when I was only working part-time and he was still finishing up school. Having those payments every month can be really tough."
Nationwide, for public institutions, the default rate fell from 11.7% to 11.3%, the federal department of education said. Among private and foreign schools, there were slight increases. For America's 1,734 private institutions, the cohort default rate edged higher — from 6.8% to 7%.
(2016 © Detroit Free Press)