Today, the Department of Education released new data on student loan defaults. The Cohort Default Rate (CDR) is the percentage of borrowers from a school who default after three years. This new data shows that for the cohort of borrowers who entered repayment during fiscal year 2016, the national cohort default rate was 10.1 percent—down from 10.8 percent for fiscal year 2015. There were a total of 458,687 defaulters of the more than 4.5 million student loan borrowers who entered repayment in fiscal year 2016. Defaults might be dropping by this metric, but at certain schools defaults are still high. Many students also might be struggling but are not counted under this metric.
Defaults By Sector
While the national CDR sits at 10.1 percent, that looks very different across sectors of colleges and universities. Private, non-profit colleges and universities have the lowest defaults at 6.6 percent. Public institutions—which make up the largest share of borrowers—have a CDR just under the national average at 9.6 percent—down from 10.3 percent for fiscal year 2015. For-profit institutions had much higher default rates at 15.2 percent. The default rates at those schools were so high that, even though for-profits accounted for approximately 22 percent of all borrowers, they accounted for approximately 33 percent of all defaults.