By Melissa Burbidge
When it comes to paying off student loans, BYU students surpass the national average.
Student Aid News reported that of all universities with 1,500 borrowers or more, BYU has the third lowest default rate.
BYU”s 1998 cohort default rate was .8 percent, falling in third place to Stanford University with a rate of .65 percent and the University of North Dakota with the rate of .71 percent, according to Student Aid News.
“We have a great student body that is committed to paying off their loans,” said Norm Finlinson, director of BYU Financial Aid.
A student receiving a federal loan has a period of six months from the time they leave school to the time they must begin payment on their student loan.
If students fail to make payments within 270 days of that six-month grace period, their loan falls into default, said Steve Olsen, a BYU Financial Aid attorney.
Former President Bill Clinton said he and his staff have credited the low national default rate of 6.9 percent to the “robust economy, strong department management and tougher enforcement tools.”
However, the nature of BYU”s student body, not measures taken by President Clinton”s administration, lend itself to the university”s low default rate, Finlinson said.
Statistics from the Department of Education show that default rates at BYU have decreased in recent years.
According to the departments statistics, BYU”s default rate has fallen from 1.6 percent in 1997, to .8 percent in 1998.
Finlinson credits this decline not only to committed students, but also to the incentives offered by the Financial Aid Office.
Three years ago, BYU”s Financial Aid Office began sponsoring a program called, “The Financial Path To Graduation,” Finlinson said.
This program is a seven-step planning process that students must undergo before they are certified for a long-term loan.
“The planning program gives students a sense of how much they can afford to borrow, and how much they will have to repay,” Finlinson said.
Low default rates are partly a result of this new planning process, he said.
The Department of Education statistics show default rates at BYU as being significantly lower than rates at nearby universities and colleges.
However, Finlinson said the default rate is not the issue being debated.
“Our concern has not been the default rate, but the students who were indiscriminately borrowing all they could, although they may not have needed to,” he said.
When this issue of borrowing arose, Finlinson said they should get into the business of helping students make wise decisions about borrowing.
Creativity in financing education is Finlinson”s advice to students.
“Don”t automatically defer to loans,” he said.
“I”m a proponent of being somewhat thrifty. Students can really help themselves out now and in the future if they are prone to sacrifice a little and go without,” he said.
