Students’ loan default rate much lower than national average
Three years after they started paying back their loans, only 3 percent of Illinois State University students defaulted, a rate significantly lower than the 14.4 Illinois average and the 13.4 percent nationwide average recently released by the U.S. Education Department.
Illinois State officials attributed that to the University’s ability to attract high-achieving students who are more likely to graduate and find employment in their fields. Illinois State’s average ACT score is near 24 with a graduation rate of 71 percent, the second highest graduation rate in the state among public institutions.
“Our caliber of students remains high,” said Jonathan Rosenthal, associate provost for undergraduate education. “Students are borrowing more money, there’s no question about it, but they are getting jobs and have the ability to repay a relatively modest student loan debt.”
Illinois State’s also has increased the amount of financial aid provided, said Jana Albrecht, director of Financial Aid. The University offered about $26 million in institutional scholarships and grants this year, Albrecht said. The Illinois State University Foundation funds more than 600 scholarships.
“We are working to keep loan debt low,” she said, adding the University also requires students complete financial aid counseling prior to borrowing. “When students ask about borrowing, we walk them through the different types of loans, showing them their estimated loan debt and the repayment schedule. We encourage them to look for scholarships and work rather than take out more loans.”
The average loan debt for an Illinois State student is $22,720, well below state and national averages, and manageable over a 10-year repayment period, Rosenthal said.
“It’s a car payment, not a mortgage payment, and, unlike a car, education is definitely not a depreciating asset,” Rosenthal said.
The U.S. Education Department default rates were based on borrowers who began repaying loans from Oct. 1, 2008, to Sept. 30, 2009. More than one in eight of those student loan borrowers defaulted within three years. For-profit institutions had the highest average three-year default rates, at 22.7 percent, which was more than double the 11 percent rate among public institutions. Private, nonprofit institutions had an average three-year default rate of 7.5 percent.