Student loan defaults are a problem for several states

on January 7, 2010

With the current financial crises, schools have been forced to raise tuition. Enraged by the scale of the raise, students have rioted at several California schools. Given the increased debt many of these students will have, we thought a quick look into student loan default rates could be insightful.

With the dot plot on the upper left, you can easily see the institutions with exceptionally high default rates, or high numbers of borrowers defaulting. For instance, if you look at Arizona you can see that the University of Pheonix (a school famous for its online classes) has almost 10,000 borrowers defaulting. Similarly, in Florida you can see that almost a third of Angley College's students are in default.

The recent tuition protests at California public universities made me wonder what student loan default rates are like in that state. As you might expect, the premier public Californian universities have very low default rates: UC Berkeley managed a commendable .9% and UCLA 1.5% (though private USC led the pack with .7%). However, one must wonder if the public universities will be able to keep their excellent default record while raising tuition by almost a third.