Student-loan default rate among nation's lowest
University of South Carolina alumni are doing a better job than their counterparts nationally when it comes to repaying their student loans.
According to the latest U. S. Department of Education figures, the default rate on federal student loans for fiscal year 2008 inched up to 7 percent, up from 6.7 percent. The default rate at public institutions increased to 6 percent from 5.9 percent.
In contrast, only 1.6 percent of USC’s graduates failed to repay their loans, a figure that is among the lowest in the country, Ed Miller, USC’s director of financial aid and scholarships, said.
Miller attributed the low numbers to the university environment in which students are counseled and encouraged not to assume debt needlessly.
“The university creates an environment of responsibility and works with students to help them avoid needless debt,” Miller said. “We are stepping up our debt-management information efforts to help students manage the responsibilities during loan repayment. That includes timely payments and communication with the loan servicer. Those are the keys to success.”
Miller said financial programs that encourage students to set reachable goals and make prudent choices heighten their awareness about the importance of good credit.
The university’s financial-literacy program takes a three-prong approach to educating students. Catherine Sale, coordinator of tutoring and financial literacy in the Student Success Center, said efforts target the campus community, the classroom and the community.
Sale is building a network of offices and individuals across campus to be sure that students have access to the financial information they need. The program partners with the Darla Moore School of Business to teach courses on financial literacy and has teamed up with area banks to enlist their support in sharing valuable information about money management with student account holders.
“We want to provide our students the skills and knowledge to take control of their financial wellbeing and make smart decisions about their finances,” Sale said. “What they learn will serve them well for the rest of their lives.”
Student-loan default rates (FY 2008 figures)
- National rate: 7 percent (6 percent for public institutions)
- USC: 1.6 percent