The number of borrowers defaulting on federal student loans has risen substantially, highlighting concerns that rising college costs, low graduation rates and poor job prospects are getting more and more students over their heads in debt.
The national two-year cohort default rate rose to 8.8 percent last year, from 7 percent in fiscal 2008, according to figures released today by the Department of Education.
The latest figures show the percentage of the more than 3.6 million borrowers whose first payments came due in the year starting October 2008 — at the height of the financial crisis — and who defaulted before Sept. 30, 2010.
More borrowers in that group have likely defaulted since last fall. Next year the department will begin using three-year default rates — considered a more accurate measure — to determine which institutions lose eligibility to enroll students who have borrowed from the government.