Although student loan default rates have soared across the country, Bradley’s did not see an increase this year.
At .9 percent, BU’s rate remains one of the lowest in the state, at about six percentage points lower than the state average.
The Federal Department of Education calculates the rates by the number of borrowers who entered repayment in a year and defaulted that year or the next year, divided by the number of borrowers who entered repayment in that first year, said Sandra Fay, the student finance manager.
“Bradley University’s cohort default rates have been consistently lower than those of similar institutions, and all institutions since 1989,” she said.
This is because the university provides students the opportunity to learn about their responsibilities for repayment and contacts students after leaving Bradley if they are having problems with repayment, she said.
The numbers recently released were the default rates for 2007.
Bradley’s default rate was the same as its rate in 2006, and down from 1.6 percent in 2005.
This compares to Illinois State University’s rate of 1.6 percent, Illinois Central College’s of 14.3 percent and University of Illinois at Urbana-Champaign’s of 1.7 percent.
U.S. Secretary of Education Arne Duncan said the rise in student loan default rates is likely an effect of the dismal economy.
Fay said there is a chance the economy may impact Bradley’s rate in the future.
“Anytime we are in a situation where jobs are more difficult to find as it is now, default rates tend to rise,” she said. “We do anticipate that this may happen. However, there are many options available such as deferments and forbearances that allow borrowers to postpone payment when having economic difficulties.”
Fay said private schools tend to have lower rates because graduation rates are higher which means employability and repayability.
However, she said she encourages anyone who may have a problem after graduating or leaving Bradley to contact the university for assistance and for all students to keep their contact information up-to-date with the university.
Borrowers go into their repayment periods six months after graduation or dropping below the status of a full-time student.
Stafford loans are considered in default when a borrower is 270 days late on payment.
“The consequences for default are quite serious,” Fay said. “The entire unpaid balance, plus the outstanding interest, collection, fees, court costs … will be added together and will become immediately due.
“The U.S. Department of Education may sue the defaulted borrower, take all or part of the borrower’s federal tax refund and garnish the borrower’s wages.”
In addition, the default borrower may not be eligible for mortgage loans, auto loans and loan deferments and eligibility for student aid.
