Selected SLC Research


Policy Analysis | November 1, 2009

What are the student loan default rates in the SLC states?

The FY 2007 national student loan default rate increased to 6.7 percent, up from the FY 2006 rate of 5.2 percent. As a historical comparison, in FY 1990, nearly one in four borrowers defaulted on their federal loans when default rates set an all-time high of 22.4 percent. The rate dropped to record low of 4.5 percent in FY 2003. Schools with excessive default rates may lose eligibility from one or more federal student aid programs.

Half of the ten states with the highest default rates are in the South--Texas (9.3%), West Virginia (9.3%), Arkansas (9.0%), Kentucky (8.8%), Mississippi (8.8%), Colorado (8.6%), Louisiana (8.6%).Six Southern states – Maryland (6.3%), Georgia (6.3%), Missouri (6.0%), North Carolina (5.7%), South Carolina (5.4%), Virginia (5.3%) – had default rates below the national average.The table below provides default rates for SLC member states.

Student Loan Default Rates in the Southern States

State Number of Eligible Schools with Loans Number of Borrowers in Default Number of Borrowers Entered Repayment Borrower Default Rate
Virginia 114 3,599 67,903 5.3%
South Carolina 69 2,167 39,618 5.5%
North Carolina 119 3,217 56,202 5.7%
Missouri 160 4,617 75,925 6.1%
Georgia 119 4,828 76,132 6.3%
Maryland 81 2,856 44,767 6.4%
Oklahoma 84 3,422 45,537 7.5%
Florida 272 13,848 168,342 8.2%
Tennessee 118 5,338 63,204 8.4%
Alabama 54 4,403 51,785 8.5%
Louisiana 82 4,396 50,790 8.7%
Kentucky 89 4,283 48,609 8.8%
Mississippi 42 2,752 31,170 8.8%
Arkansas 60 2,602 28,777 9.0%
West Virginia 55 2,332 25,015 9.3%
Texas 283 18,756 201,027 9.3%
SLC Region 1,801 83,416 1,074,803 7.8%
United States 5,340 225,208 3,338,253 6.7%

Source: United States Department of Education Federal Student Aid Program, October 2009 (accessed November 2, 2009)