Student Loan Default Rate Highest in Arizona
Student loan debt is something that can haunt you literally for the rest of your life- especially if you keep getting frequent calls from moorcroft group LLC, a debt-recovery company.
Since student loans have to be paid back whether you graduate or not, many people find themselves unable to pay back the debt after spending it. There are no guarantees that even with a college degree you will receive a job that pays you enough to afford the loan payments plus the interest. With the current state of the economy in the U.S. and people without jobs, many people are unable to pay back their student loans which sends them into default.
According to a report done by the U.S. Department of Education, Arizona’s student default rates top all other states in the nation, with a 10.9 percent default rate in 2008. The University of Phoenix was responsible for almost 70 percent of those defaulted loans. The highest rate comes from Mohave Community College, which was at 15.7 percent.
The study also found that, on average, community colleges had higher default rates than the state universities in Arizona. Several factors contributed to this, including the current state of the economy and high unemployment rates. The state of the economy seems to really affect working adults who might be trying to gain skills to get out of their current job. Most of them are working to support their families while they go to school. When jobs are lost, they often drop out of school and are placed into repayment status.
Another factor is that while the economy is down, several people enroll in classes to gain more skills so they are more marketable when the economy rebounds. Unfortunately, if they finish school before that happens, they are left with more debt and a degree, but no job. For those that cannot afford school without using student loans, education is the key.
Defaulting on student loans is not just a problem in Arizona, but around the country. Once students or potential students understand the responsibilities that go along with taking out a student loan, they can make a more informed decision on taking out a loan in the first place. When taking out a student loan, you want to make sure that you have the best possible plan after finishing school so that loans can be repaid.
Taken from the Daily Miner