U.S. Department of Education Updates Colleges’ Student Loan Default Rates
5/2/2016 7:35 AM
Twenty-one schools received adjustments to their default rates, allowing federal funding to continue.
The U.S. Department of Education altered the student loan default rates at 21 colleges, allowing them to continue to receive federal funding, according to a report in The Wall Street Journal.
Colleges with default rates at more than 30 percent for three consecutive years or 40 percent for one year are subject to losing their federal funding and grants from Ed, according to the article. Federal law allow colleges to file appeals with Ed to have their default rates adjusted. “Adjusting the default rate for one or more of those years can give the colleges a reprieve that preserves their ability to offer federal student aid,” The Wall Street Journal reports.
In 2014 and 2015, Ed made voluntary adjustments to some colleges' default rates as a result of some students having multiple loans, according to the article.
The reason for the recent adjustments is unclear, however and Ed spokesperson told The Wall Street Journal the changes are “part of the department's deliberative process.”
Ten of the 21 schools with adjusted rates are for-profit colleges and together students at the campuses received more than $145 million in federal aid in 2014/15, according to the article.
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