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College loan default rates rise nationally, decline in Utah

College loan default rates rise nationally, decline in Utah

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SALT LAKE CITY -- The number of college students defaulting on their federal student loans is climbing, and those who attend for-profit schools remain the most likely group to default -- but Utah's contribution to the crisis is declining.

According to new government data released Monday, the U.S. Department of Education says numbers from fiscal year 2008 show 7 percent of borrowers of federal student loans default within two years of beginning repayment, up from 6.7 percent the previous year.

The default rate for students at for-profit schools rose from 11 percent to 11.6 percent.

Utah's student loan default rate has steadily slipped from over 4 percent to under two since 2005. That's less than one-fourth the national average.

Utah has the lowest rate default rate in the nation behind Montana for students who began repaying loans in 2008.

For-profit colleges are fighting proposed Education Department regulations that would cut off federal aid to for-profit college programs if too many of their students default on loans or don't earn enough after graduation to repay them.


Story compiled with contributions from Eric Gorski of the Associated Press.

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