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||Reprinted with permission from the Lewiston Morning
Idaho's Student Loan Default Rate
BOISE -- The default rate on student loans in Idaho fell for the second straight year in
1999, following the national trend, even as the number of students due to begin repaying
their loans rose, new government figures show.
The U.S. Department of Education said the default rate in Idaho dropped to 5.8 percent
from 7.2 percent in 1998 as those required to start repaying the government increased more
than 6 percent to over 13,000.The national default rate was 5.6 percent, down from 6.9
percent in 1998. The department said 26 states had rates lower than Idaho's.
But one financial aid administrator warned that any dramatic deterioration of the economy
could reverse the downward trend.
Energy Secretary Rodney Paige said the decline reflects "a concerted effort by
schools and colleges to increase borrower awareness of their repayment obligations, track
borrower delinquencies and counsel borrowers who get behind in their payments."
The rates reflect the percentage of borrowers whose first loan payment was due in the year
that began on Oct. 1, 1998, and who failed to make that payment for at least nine months.
University of Idaho Financial Aid Officer Dan Davenport said the school's decision in the
early 1990s to switch to the government's direct loan program has been a big boost to
reducing defaults because it is centralized and easier to negotiate.
Idaho State's default rate dropped from 9.7 percent in 1997 to 6.9 percent in 1999 while
those required to make payments rose nearly 6 percent to 2,855.
In addition to the state two- and four-year institutions and the traditional private
counterparts, 13 other institutions, primarily trade schools, also qualify for federal
loans for their students.