By Mike Petrovsky
For the Journal
A rise in the number of Idaho State University students during the recession and the university’s function as a community college are primary factors contributing to ISU’s student loan default rate, which is higher than state and national averages, an ISU official said this week.
The university loan default rate is 15 percent, reported James Martin, director of the ISU Office of Financial Aid and Scholarships. Average student loan default rates in Idaho and nationally are much lower – 13.1 percent and 13.7 percent respectively, according to the Associated Press.
Martin says ISU’s higher default rate is partly the reflection of a “bump” in enrollment that occurred at the university between 2007 and 2010, or during the recession.
And he said the other major contributing factor to the higher rate is that ISU serves as a community college.
“The wages aren’t quite has high for community college graduates,” said Martin, adding that as a result those graduates have a harder time paying back their loans.
“And once the students leave school, we lose contact with them and that puts us between a rock and a hard place,” Martin said.
Yet Martin said that ISU’s default rate is low compared with other Idaho higher learning institutions that also serve as community colleges.
“The College of Southern Idaho (in Twin Falls), College of Western Idaho (in Nampa) and Northern Idaho College (in Coeur d’Alene) are in the 22 to 24 percent default range,” Martin said.
To help solve the student loan default rate problem, which the Associated Press reports is on the rise statewide, Martin said that about a year and half ago ISU contracted with the Utah Higher Education Assistance Authority, which contacts ISU graduates once they are they 90 days delinquent in paying their loans. The organization tells graduates where they can assistance with paying back their loans or getting their monthly payments reduced.
As a further precaution, Martin said ISU has taken it upon itself to contact graduates who are 60 days delinquent to give them a heads up that they will be getting calls from the Utah authority in 30 days.
“We’re hoping to see results from these efforts soon,” Martin said.
Although defaulting on student loans has been an increasing problem among graduates statewide, the U.S. Department of Education says the national loan default rate has been declining, according to the Associated Press.
“Our economy hasn’t always been the best over the last few years,” Dan Davenport, student financial aid director at the University of Idaho, told the Idaho Statesman in a story on Monday.
That combined with rising college costs, low Idaho wages and students borrowing too much could be contributing to the increase in default rates in Idaho, the state’s university officials have told the Associated Press.
Boise State University’s default rate is at 11.4 percent, and the University of Idaho is at 8.3 percent.
“We do talk to students about smart borrowing choices,” said Jim Anderson, Boise State’s associate vice president for enrollment services. “We talk to them about their ability to reduce loans.”
The Institute of College Access and Success says the average total debt for those graduating in 2012 was $26,602 at Idaho State University, $27,369 at Boise State University and $26,809 at the University of Idaho.
Lewis-Clark State College in Lewiston had a default rate of 11.3 percent, down 6 percent from 2010. School officials attributed the reduction to a nonprofit group called American Student Assistance that helps students determine their payments based on their income.
The federal government gives graduates three years to start paying on their college loans. The student loan default rate percentages used in this story represent those who graduated in the 2011 fiscal year.
The Associated Press contributed to this report.