Rising Default Rates Reflect Economic Times

December 2, 2013

By Ajong Mbapndah

In a trend that may be indicative of today’s economic realities, many schools are experiencing a hike in default rates for student loans.

The default rates have gone up for most schools in Richmond between 2009 and 2011, according to an analysis of data released recently by the U.S. Department of Education. For example:

¶ In 2009, the default rate at the Virginia Union University was 11.6 percent. It jumped to 15.3 percent in 2010 and 20.8 percent the following year.

¶ At the J. Sargeant Reynolds Community College, the default rate rose from 11.6 percent in 2009, to 12.9 percent in 2010, to 14.4 percent in 2011.

Statewide, of the 95 Virginia schools that received at least 25 federal student loans in 2011, 58 had an increase in default rates from 2010 to 2011.

Default rates at Virginia Commonwealth University are on the rise as well. In 2009, VCU had a default rate of 3 percent; that rose to 3.7 percent in 2010 and 4.7 percent in 2011.

Bons Secours St. Mary’s School of Medical Imaging, a private institution, had default rates of zero — no defaults — for 2009 and 2010. But the school registered a default rate of 7.1 percent in 2011.

Not every school has followed that pattern. The default rate at the University of Richmond increased from 1.2 percent in 2009 to 2.8 percent the next year, but then dropped to 1.2 percent in 2011.

At the Baptist Theology Seminary, the default rate has been in decline: from 6.8 percent in 2009, to 2.7 percent in 2010, to 2.6 percent in 2011.

This article is a “Data Drop brief” — a quick-hit posting based on analysis by students in MASC 644 Computer-Assisted Reporting. This exercise focused on using Microsoft Access, a database manager, to select records from a large data set and sort them.