Although student loan default rates have increased in recent years nationwide, default rates for students at UNC-system schools have remained relatively low.
According to the U.S. Department of Education, 8.9 percent of college students nationwide defaulted on their loans in 2009, a 1.9 percent increase from 2008.
But Steve Brooks, executive director of the N.C. State Education Assistance Authority, said default rates for system students have hovered at about 2.9 percent.
While the system’s default rate is 6 percent lower than the national average and 3.1 percent lower than the state average, students still face severe penalties for defaulting on loans.
In addition to losing their eligibility for more loans, students who default on their loans might have their tax refunds steered toward debt payments or loan payments deducted from their paychecks.
“Their credit rating will be pretty much destroyed,” Brooks said.
Default rates among UNC students have also remained stable. Shirley Ort, associate provost and director of scholarships and student aid at UNC, said the student default rate was only 0.5 percent in the 2008-2009 academic year, a decrease of 0.4 percent since 2006.
Ort said it’s difficult to determine why fewer students have defaulted on their loans.
“We assume that it’s because the debt load has been manageable and that students are still able to find jobs,” she said.
