DATE: Oct. 11, 2005
CONTACT: Gus Wales, Director of Public Information and Communications
PHONE: (225) 922-2029
FAX: (225) 922-0790
State’s student loan cohort default rate continues to drop
The cohort default rate on student loans guaranteed by the Louisiana Office of Student Financial Assistance (LOSFA) dropped to 5.29 percent in fiscal year (FY) 2003, a decrease of 21.8 percent from FY 2002’s rate of 6.77 percent, according to figures recently released by the U.S. Department of Education.
The cohort default rate is defined by federal regulations as the percentage of borrowers who enter repayment in a certain year and default before the end of the following year. The recently released data represents the cohort of borrowers who entered into repayment during the period from Oct. 1, 2002 through Sept. 30, 2003.
Robert Pollage, administrator of LOSFA’s Default Prevention Section, attributes the improved rate to several factors, including a recently instituted early awareness program wherein borrowers leaving school and entering the grace period are notified by mail about repayment, deferment and forbearance options. The grace period begins when the student graduates or leaves school and ends six months later.
The U.S. Department of Education has placed the national FY 2003 cohort default rate at 4.5 percent, the lowest rate in the history of the program, representing a significant drop from FY 2002’s national rate of 5.2 percent.
“There’s a coordinated
campaign among all partners in the federal loan programs to focus attention
on student-loan repayment – and it’s working,” said U.S. Secretary
of Education Margaret Spellings. “Financial awareness outreach to students
and families, and targeted interventions when needed, have paid off, resulting
in significant savings to taxpayers.
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