Default rate for student loan repayment by former Syracuse University students reaches lowest level ever
Default rate for student loan repayment by former Syracuse University students reaches lowest level everMarch 24, 2001Cynthia J. Moritzcjmoritz@syr.edu
According to a draft report from the U.S. Department of Education, only 2 percent of former Syracuse University students who were due to start repaying their student loans in 1999 went into default, representing the lowest default rate ever for the University. The Department of Education calculates a school’s default rate by taking the number of students who go into repayment in a particular fiscal year (beginning October 1) and dividing it by the number of students who are in default at the end of the next year. According to the draft report, 3,339 borrowers were due to begin repayment in 1999, the most recent year for which figures are available. Of those, only 67 defaulted on their payments. The final report will be released in the fall. “Our rate compares very favorably with other institutions,” says Christopher Walsh, SU’s executive director of financial aid. “Two percent is about the lowest among large institutions.” SU’s default rate in Fiscal Year 1998 was 3.1 percent. The year before that, in 1997, the rate was 5.2 percent, which was SU’s highest rate in the past 13 years. For borrowers who default on their student loan repayments, consequences can include having wages garnished, requiring one’s employer to forward 10-15 percent of disposable pay toward repayment of the loan; having to pay collection costs on top of the loan repayment; notification to credit bureaus, resulting in a lowering of the borrower’s credit rating; denial of any further Title IV federal student loan if one defaults on a Title IV loan; and ineligibility for any deferments of payment. Walsh attributes SU’s low default rate in part to a robust economy. But, he adds, SU goes to great lengths to keep student debt low. “I think the key is responsible borrowing,” he says. “We work with the whole family, not just the student, to make sure they don’t borrow more than they can afford.” The University is always looking for better loan products for its students, Walsh says. New initiatives in the past year included special parent and alternative loans, and the implementation of electronic processing of paperwork. The Office of Financial Aid and Scholarship Programs electronic processing team received a 2000 SUIQ Exemplary Achievement Award from SU in recognition of its work.