BYU maintains low loan default rate

    63

    By CHRIS ONSTOTT

    Even as defaults on student loans continue to drop nationwide, BYU remains the envy of other schools because of its ridiculously low default rate.

    The default rate for students of universities and technical schools whose loans were due in 1995 was 10.4 percent nationwide, dropping from 10.7 percent the year before, according to the Department of Education.

    Default rates for students of four-year and two-year colleges and universities alone were 6.9 percent. However, despite an improving economy, the default rate at BYU does not have much further it can fall according to BYU Director of Financial Aid Norm Finlinson.

    “The default rate at BYU is about 1.3 percent,” Finlinson said.

    Finlinson attributed the low default rate more to the caliber of students attending BYU than to economic conditions.

    “They (BYU students) realize that these loans have to be paid back and I think they are very conscientious about doing that.”

    The decrease in the nationwide default rate, which has dropped five straight years from previous high of 22.4 percent in 1990. The Department of Education attributed the steady drop mainly to an improved economy and a get tough policy on delinquent loans which can include garnishing wages and even withholding income tax refunds.

    Even with the booming economy and the BYU default rate one of the lowest for an institution of its size, the BYU loan program is not without concerns. Following 1992, when legislative action in Washington made it easier to get loans and borrow more money than previously, student loans nationwide and at BYU shot through the roof.

    “We know that students are borrowing at record numbers,” Finlinson said. “We have developed several programs in the financial aid office to help students define what an appropriate debt level for students would be.”

    A loan is considered in default when payments are missed for at least six months in a year after the loan has come due.

    The drop in student default rates is good news for the national student loan programs as congress must reevaluate student aid legislation next year.

    Print Friendly, PDF & Email