Default rate drops again for community colleges

U.S. Education Department (Photo: AACC)

The student loan default rate for community colleges continues to drop, decreasing to 15.2 percent in fiscal year 2017, according to new federal data.

The community college cohort default rate (CDR) for FY17 saw a 0.7 percentage-point decline from 15.9 percent in FY16, according to U.S. Education Department (ED) data released on Wednesday.

The default rate at community colleges has dropped slowly but steadily since 2010, when the sector’s rate was 20.9 percent. The rate was 16.7 percent in 2015, 18.3 percent for 2014, 18.5 percent in 2013 and 19.1 percent in 2012, which is when the department started tracking repayment over three years instead of two.

The number of overall student borrowers at public two-year colleges entering repayment also again decreased, which means fewer students had taken federal loans. In 2017, the number of borrowers entering repayment was 644,831, down from 730,146 in 2016 and 852,423 in 2015. In 2014, the number of borrowers entering repayment was 921,537, down from 948,515 in 2013.

The broader picture

Overall, the CDR for all U.S. public and private colleges and universities dropped to 9.7 percent from 10.1 percent in FY16, representing a 0.4 percentage-percent decline, ED said. For public institutions, the rate dipped to 9.3 percent in FY17, from 9.6 percent in the previous year. Among public four-year schools, the default rate actually increased slightly, from 6.8 percent for FY16, to 7.1 percent in FY17.

For private institutions, the CDR inched up 0.1 percentage point to 6.7 percent, from 6.6 percent in FY 2016. Among two- and three-year private colleges, the rate also edged up, from 15.2 percent in FY16, to 15.4 percent in FY17. For four-year privates, it also slightly increased from 6.3 percent to 6.5 percent.

Proprietary schools continue to see their default rates drop. In FY17, it dipped to 14.7 percent, from 15.2 percent the prior year.

Colleges may check their CDR rates online.

About the Author

Matthew Dembicki
is editor of Community College Daily and serves as publications director for the American Association of Community Colleges.