Fairfield County colleges and universities cut their student-loan default rate to 4.6 percent in the most recent fiscal year, matching the national rate and down from 6 percent the year previous.
Statewide, Connecticut universities and colleges had a 2.7 percent default rate, an improvement from the previous year”™s 3.8 percent rate. Those figures do not include smaller trade schools, where default rates have nearly doubled in the past two years to 10 percent.
Among institutions granting at least an associate degree, Norwalk Community College had the worst default rate in the state at 24 percent, according to updated statistics from the U.S. Department of Education.
If it sounds like a high number, it is ”“ Norwalk Community College had the worst default rate in New England and was one of the 10 worst in the nation last year among more than 4,000 institutions granting at least an associate degree.
The number may be a one-time outlier, however ”“ just 38 of Norwalk Community College”™s students held one of the two loans tracked by the Department of Education. The previous two years, the school”™s default rate was between 5 percent and 6 percent, comparing favorably with other community colleges in the state.
Schools that have a default rate of more than 25 percent over three successive years ”“ or more than 40 percent in one year ”“ face termination of their ability to participate in the relevant student loan programs.
Those programs include Federal Family Education Loans and William D. Ford Federal Direct Loans. The new Department of Education figures track graduates who began loan repayments between October 2004 and September 2005, and who defaulted before October 2006.
Nationwide, the student loan default rate fell to 4.6 percent in the 2005 fiscal year, down from 5.1 percent in 2004. The Department of Education said the decline was due in part to a record number of loan consolidations as borrowers refinanced at lower interest rates and longer payment terms; as well as forbearance and deferments granted to victims of the 2005 Gulf Coast hurricanes.
New London”™s Connecticut College had the best record in New England, with none of its 318 students who began repaying loans in default after one year.
As it turns out, dentists and priests are the only better bets for Connecticut bankers these days; only the University of Connecticut School of Dental Medicine in Farmington and the Holy Apostles College and Seminary in Cromwell bested Connecticut College”™s single student default among nearly 900 borrowers entering repayment the past three years.
During that period nationally, the College of Saint Benedict (CSB) in St. Joseph, Minn., was tops with no defaults on more than 1,400 loans.
“One thing we do is give the students individual sheets of all the loans they took (and) who are the lenders,” said Jane Haugen, executive director of financial aid at the women”™s college. “Putting it all on one page helps.”
She also speculated that the Catholic school attracts students from families that steep them in responsibilities such as repaying debt.
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If not in the exalted strata of CSB, local Catholic schools fared well also ”“ Fairfield University was one of just three schools in Connecticut to improve both its rate and number of loan defaults for two years running, despite a whopping 63 percent spike in the number of borrowers graduating in the fiscal 2005 school year.
Fairfield University”™s 0.9 percent default rate over three years was tops in Fairfield County; neighboring Sacred Heart University was just behind with a 1.7 percent default rate over that stretch.
Default rates tend to fall in stronger economies when graduates can more readily find jobs, said Erin Chiaro, director of financial aid at Fairfield University. He added that schools with stronger academics tend to see lower default rates due to increased interest from employers.
As for Yale University, considered the top institution in the state? Fairfield University graduates bested their Ivy League counterparts at Yale by 0.01 percent in last year”™s loan repayment rates.
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