DOE: University of Phoenix Leads the Way with Most Student Loan Defaults
According to a report by the U.S. Department of Education, Arizona has the highest rate in the nation of debtors defaulting on student loans.
With a national average rate of 7 percent for student loan defaults, Arizona tops the chart at a whopping 10.9 percent.
Despite the U.S. Department of Education’s best intentions, this report is misleading. The Department’s report gets its figures by considering the loans defaulted from a school based in its state. The University of Phoenix plays a key factor here. This University, with the availability of its online programs, proudly hosts a nation-wide student body. This means that, no matter the home state of these students, their loan, if defaulted, counts as a defaulted loan in Arizona.
If the U.S. Department of Education omits the University of Phoenix from Arizona from the research data, this arrive at a default rate of 8 percent. This figure more closely resembles the national average of 7 percent.
The default rate strictly for the University of Phoenix was an extraordinary 12.9 percent, and the University of Phoenix represented 70 percent of Arizona’s defaulted loans.
According to the USSA (United States Student Association), universities like these often have a high rate of defaulted loans, due to their availability and low tuition, which attract low-income students, who are unable to repay loans. This is possibly a result of the high youth unemployment rate, which, at 20 percent, is at its highest in almost 80 years.
The average student today graduates with over $20,000 in student debt and, with one of the highest unemployment rates in history, it’s no wonder why so many student loans have defaulted.
Other stories our readers have found helpful:
