![]() But, the study's author said, it could also get worse. Those numbers could change, the report notes, especially if the economy continues to improve, driving down defaults and lessening the effect of the 2008 recession. If the trends continue, Brookings predicted, default rates for student loan borrowers will skyrocket to 38% by 2023. But those numbers jumped sharply for those who entered college in 2004: Some 27% had defaulted after 12 years, a nearly 50% increase. Instead, it's the rapidly rising rates of people who go into default.įor people who entered college in 1996 and took out loans, the data shows, 18% had defaulted after 12 years, and more than a quarter had defaulted after 20. Student debt has ballooned from $260 billion in 2004 to almost $1.4 trillion, but it's not those numbers that spell serious problems for student loan borrowers, the report found. But a new report by the Brookings Institution, a centrist think tank, takes a far-reaching view of student loans and default, looking at what happens to people decades after they enter school. And the impending crisis will hit marginalized students the hardest, with sky-high default rates among black students and those at for-profit colleges.ĭata about student loan borrowers is often limited to small windows of time - typical "default rates" measure students for only three or five years. ![]() Americans are facing a "looming" student loan default crisis that is more serious, and more complex, than previously understood, an analysis of new federal data suggests.Īlmost 40% of borrowers who entered college in 2004 are likely to default on their loans by 2023, the report predicts.
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