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Growing Number of Borrowers Are in Default

December 14, 2017

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.

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Paul Fain

Paul Fain, Contributing Editor, came to Inside Higher Ed in September 2011, after a six-year stint covering leadership and finance for The Chronicle of Higher Education. Paul has also worked in higher ed P.R., with Widmeyer Communications, but couldn't stay away from reporting. A former staff writer for C-VILLE Weekly, a newspaper in Charlottesville, Va., Paul has written for The New York Times, Washington City Paper and Mother Jones. He's won a few journalism awards, including one for beat reporting from the Education Writers Association and the Dick Schaap Excellence in Sports Journalism Award. Paul got hooked on journalism while working too many hours at The Review, the student newspaper at the University of Delaware, where he earned a degree in political science in 1996. A native of Dayton, Ohio, and a long-suffering fan of the Cincinnati Bengals, Fain plays guitar in a band with more possible names than polished songs.

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