UNC, one of the best-valued public schools across the nation, credits its low default rate of student loans to its accessible financial aid program, lower borrowing rates and low cost of tuition.
The default rate of student loans for the class of 2013 that just graduated from UNC is at 1.5 percent, among the lowest in the nation. The national average in FY 2013 was 11.3 percent.
College graduates owe around $1.4 trillion in student loans, a scene which is reminiscent of what happened during the subprime mortgage crisis in 2008.
But the situation could worsen. Default rates for students who first received federal loans in 2004 will reach almost 40 percent by 2023 following the current trend, according to a report from the Brookings Institution.
This trend, however, is not observed at UNC. For the fiscal years 2008-2013, the Department of Education reported UNC’s average default rate for new borrowers of the Federal Perkins Loan went into default at 6.44 percent, compared to the national average of 10.15 percent. The Federal Perkins Loan, a campus-based loan program, is one of the two student loans offered at UNC. Both type of loans are awarded by the Office of Scholarships and Student Aid based on the student's FAFSA information.