New Education Department data shows 15.6 percent of community college students default on federal loans over the lifetime of the loan, reports College Bound. That’s lower than the 18.6 percent default rate for students of for-profit colleges, but considerably higher than the default rate for four-year, private, nonprofit institutions (5.6 percent) and four-year public colleges (6.3 percent).
The overall cumulative lifetime rate was 9.8 percent for the 2008 cohort, down slightly from 10.4 percent the previous year. Projecting out 20 years as to what the default rates in total dollars might be for students, the Education Department puts the estimate as high as 46 percent for students at two- and four-year proprietary schools and 31 percent at two-year public and private nonprofit schools.
I’m surprised the default rate for two-year public college students is so close to the for-profit rate since for-profit students have to borrow much more money to pay tuition. That may reflect poor completion rates for community college students.