Growing Number of Borrowers Are in Default

The U.S. Department of Education this week released new federal loan data showing that 4.6 million student loan borrowers were in default as of Sept. 30, an increase from the 2.2 million who were in default four years earlier. Roughly 298,000 borrowers entered into default during the quarter that ended in September, the department said, with 274,000 defaulting for the first time.

The federal student loan portfolio has grown to $1.37 trillion, according to the department, up from slightly more than $1 trillion four years ago.

On Thursday, the Center for American Progress released an analysis on student loan defaulters. The left-leaning think tank found that defaulters tend to borrow less than their peers. The median defaulter owed $9,625, according to the analysis, which is $8,500 less than the median loan balance for a nondefaulter.

Likewise, almost half (49 percent) of borrowers who default failed to earn a college credential, the center said, compared to the 10 percent who hold a bachelor's degree.

Defaulters also are more likely to be from low-income backgrounds. The analysis found that nearly 90 percent of defaulters received a Pell Grant, while 70 percent are from families where neither parent earned a college degree.