The new default data may have some impact on the debate about whether to end the bank-led Federal Family Education Loan (FFEL) program. For 2007, the default rate for colleges in the FFEL program was 7.2 percent, up from 5.3 percent.
By comparison, the 2007 default rate for the government-led Direct Loan program was 4.8 percent, only a small increase from the 4.7 percent rate reported in 2006.
About three-fourths of colleges participated in the FFEL program in 2008, while only about one-fourth were in the Direct Loan program, according to finaid.org. However, the group says, the credit crisis has increased interest in Direct Loans, which reported a 40 percent increase in loan volume in 2008.
For more information about the new default rates, including data for schools and sectors of higher education, visit the Education Department’s web site at http://www.ifap.ed.gov/DefaultManagement/DefaultManagement.html.
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