Roughly one in five borrowers repaying federal Direct Loans tied to Alabama colleges is more than 90 days delinquent, according to federal data released last week.
The estimated nonpayment rate crept up to 19.7%, just above the 19.3% rate last summer. The increase is small, but the lack of improvement is not good news.
That is because federal education officials consider nonpayment as an early warning of how many borrowers could eventually default.
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High default rates can carry consequences not only for borrowers, but also for the colleges they attended. Institutions can lose access to federal student loans and Pell Grants if their official default rates become too high.
For now, the overall picture at Alabama colleges has changed little. Twenty Alabama institutions — public, private nonprofit and for-profit — had nonpayment rates of at least 30%, the same number as last year.
The institutions with the highest rates also remained largely the same. There was some movement: however, two public community colleges moved above 30% and two proprietary institutions moved above 40%.
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EDITOR’S NOTE — This story was written by Trisha Powell Crain and originally published by Alabama Daily News.
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