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College loan default rates rise nationally, decline in Utah

College loan default rates rise nationally, decline in Utah

Posted - Sep. 14, 2010 at 11:49 a.m.



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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.

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

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