Students at a community college in rural Texas may lose access to federal aid as a result of a student-mortgage default measure Congress expanded largely to keep an eye on for-revenue institutions.
Frank Phillips College is among several two-year colleges whose leaders are worried about how their institutions will fare with this fall's release of the first batch of sanction-bearing numbers under the revised federal-loan default rate.
"We comprehend the results."
The U.S. Department of Education now tracks defaults among federal loan recipients for three years after they leave college. Two-year rates had previously been the standard. But the U.S. Congress inserted the expanded "cohort default rates" into the 2008 reauthorization of the Higher Education Act, which is the law that governs federal financial aid.
Pupil supporters had pushed for the three-yr rates. They contended that the latest measure would do a much better job of judging pupils' indebtedness and also the importance of the teaching they received.
Default charges are higher under the enlarged rates, particularly among for-profits.
For example, last year's release, which was based on loan repayments that were due in 2011, showed an average default rate of 21.8 percent in the for-profit sector, compared to 13.6 under the two-year metric. The three-year rate was 13 percent at all public institutions (including four-year institutions) and 8.3 percent at private, nonprofit institutions. Two-year rates were 9.6 at publics and 5.2 percent at privates.
Sanctions will kick-in with this particular year's release of three-year rates.
Universities will drop eligibility for many federal support, such as the Pell Grant system, if their speeds top 30 % for three successive years or 40 % to get one year.
Comparatively few associations would neglect under these speeds, mentioned Jacob P.K. Gross, an assistant professor of teaching in the College of Louisville, that has discussed default charges. Based On an investigation he ran of information from the initial two releases, 218 associations went above 30-percent at one-point and 3 7 -- or 4.3 % of associations participating in national assistance systems -- neglected to remain below 40 %.
The rates set "very low thresholds," Gross said. "We're not really talking about so many institutions."
Frank Phillips College is among several two-year colleges whose leaders are worried about how their institutions will fare with this fall's release of the first batch of sanction-bearing numbers under the revised federal-loan default rate.
"We comprehend the results."
The U.S. Department of Education now tracks defaults among federal loan recipients for three years after they leave college. Two-year rates had previously been the standard. But the U.S. Congress inserted the expanded "cohort default rates" into the 2008 reauthorization of the Higher Education Act, which is the law that governs federal financial aid.
Pupil supporters had pushed for the three-yr rates. They contended that the latest measure would do a much better job of judging pupils' indebtedness and also the importance of the teaching they received.
Default charges are higher under the enlarged rates, particularly among for-profits.
For example, last year's release, which was based on loan repayments that were due in 2011, showed an average default rate of 21.8 percent in the for-profit sector, compared to 13.6 under the two-year metric. The three-year rate was 13 percent at all public institutions (including four-year institutions) and 8.3 percent at private, nonprofit institutions. Two-year rates were 9.6 at publics and 5.2 percent at privates.
Sanctions will kick-in with this particular year's release of three-year rates.
Universities will drop eligibility for many federal support, such as the Pell Grant system, if their speeds top 30 % for three successive years or 40 % to get one year.
Comparatively few associations would neglect under these speeds, mentioned Jacob P.K. Gross, an assistant professor of teaching in the College of Louisville, that has discussed default charges. Based On an investigation he ran of information from the initial two releases, 218 associations went above 30-percent at one-point and 3 7 -- or 4.3 % of associations participating in national assistance systems -- neglected to remain below 40 %.
The rates set "very low thresholds," Gross said. "We're not really talking about so many institutions."
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Lowering your a student loan repayment should you do not qualify for student loan forgiveness could be as easy as student loan consolidation or reaging your department of education accounts
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