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UW-RF AMONG LOWEST IN STUDENT LOAN DEFAULT RATES
By Malisa Hyland
UW-RF University Communications
NOV. 18, 2005-- The University of Wisconsin-River Falls is among the top two schools with the lowest loan default rates in the UW System, according to the newest data from U.S. Department of Education's Information for Financial Aid Professional's Library.
The University of Wisconsin-Green Bay has the lowest default rate, 0.6 percent, with UW-RF following close behind with a rate of 0.7 percent. The University of Wisconsin-Madison is the third lowest with 0.8 percent. The most recent data is from fiscal year 2002-03.
The default rates are calculated based on loans from the Federal Family Education Loan Program (FFEL), the William D. Ford Federal Direct Loan Program or both, depending on the school.
A cohort default rate is the percentage of a school's student federal loan borrowers who enter repayment and default within the fiscal year. A federal fiscal year is from Oct. 1 through Sept. 30 of the following year, while a fiscal year at UW-RF is from July to June of the next year.
UW-RF uses only the FFEL program, which had 1,134 borrowers in the repayment period in fiscal year 2003. Only nine students defaulted dropping the default rate to 0.7%.
In the previous fiscal year, 21 out of 1,197 students in repayment defaulted, resulting in a 1.7% default rate.
A variety of situations can put a student into default including not making monthly payments after the six-month grace period or starting to pay the loans, but then stopping due to personal circumstances. A student is not in default, however, if they are working with their guarantor and making some payment each month, even if it is not the full amount due.
In the past, the benefits of having a low default rate have been noticeable by students. Assistant Director of Financial Aid Beth Boisen said that in previous years, a low default rate meant that the 30-day waiting period for financial aid refund was lifted for incoming freshman.
Boisen also said that a benefit in the past has been that students who only attended college for one semester of the year didn’t have to wait to get the second installment of their financial aid refund; they could receive their entire refund at the beginning of the semester.
Although these were benefits in the past, Boisen said that the Department of Education has changed the policy. The main benefit for UW-RF’s low default rate this year is that it puts the University on a pedestal.
“It makes our institution look good,” Boisen said. “We do have students who care about that. They are successful at River Falls, they go out and find careers and are able to pay off their loans. We have students with a good work ethic and it will show up in the numbers.”
To learn more about loan default rates, visit www.ifap.ed.gov.
Thursday, 22-Apr-2010 16:06:48 Central Daylight Time