The rate at which student loan borrowers defaulted on debt taken out to attend college dropped for the second consecutive year, although the Department of Education says significant work remains on the issue.
Of the 5.2 million student borrowers who entered repayment in the 2013 fiscal year, 11.3 percent had defaulted on their federal student loans within a three-year period, the department announced Wednesday. That was a slight decline from the 11.8 percent default rate reported for the previous cohort and the 14.7 percent rate two years prior.
Student loan borrowers default on a loan when they haven’t made a payment in at least 360 days.
Despite significant growth in enrollment in income-driven repayment plans, the year-to-year drop-off in the cohort default rate was modest. The administration has also increased the amount of the maximum Pell Grant, cut student loan interest rates and simplified the process for applying for federal student aid.
“The Obama administration has taken unprecedented measures to provide borrowers more options to avoid default, manage their student debt and stay on track to repayment, and to hold institutions accountable for improving student outcomes,” said Education Secretary John King Jr. in a statement. “Even with progress, however, we know considerable work remains ahead.”
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