Analyzing data from the Department of Education, LendEDU recently published a report that highlights the student loan default rates at nearly 4,500 different institutions, in addition to all 50 states and Washington D.C.
And, the data did not bode well for the state of Mississippi; with a student loan default rate of 14.94%, the Magnolia State had the second highest default rate in the country, outpaced only by Nevada’s default rate of 18.16%.
The student loan default rates at the University of Mississippi (7.5%) and Mississippi State University (7.6%) were the eighth and ninth lowest in the state, respectively. Schools in the state with very high default rates included Rust College (27%), Alcorn State University (21.4%), Tougaloo College (20.8%), and Jackson State University (17.8%).
The consequences of student loan default are severe, potentially including things like a damaged credit score and the garnishment of wages, Social Security benefits, or tax refunds. The negative impact is often tenfold, as many of the affected are young Americans who are just beginning their financial journey.
Much of the blame for excessive student loan default rates not just in Mississippi, but the entire country, can be placed on the colleges and universities that charge over-the-top tuition rates without rhyme or reason.
In a perfect world, colleges would realize there is hardly a justification for tuition rates that sometimes exceed $50,000 per year and lower them accordingly.
But, as many higher education institutions have shifted their focus to big business rather than educating our nation’s young adults, this is highly unlikely and it is why the government must force their hand.
Colleges and universities that have raised tuition rates to outrageous levels should be held accountable through federal oversight. If a certain institution repeatedly has unusually high default rates, in addition to high student loan debt figures brought on by tuition rates, they should become equal partners with students, both dropouts and graduates, in repaying the subsequent student loan debt.
This would call for these institutions to make matching monthly student loan payments in partnership with the student, or perhaps even paying a bit more. There is no good reason why a young adult should have their financial life set back by a decade from tuition rates that can only be met by taking on student loan debt amounts that blow past six figures, while the colleges and universities continue to fill their coffers.
The government has the ability to identify those institutions that have become outliers when it comes to student loan debt and default rates so this accountability system would not be difficult to establish; the Department of Education already releases default data, while report’s like LendEDU’s Student Loan Debt by School by State study can be used for tracking student loan debt figures at each school. https://lendedu.com/blog/student-loan-default-rates-by-school-state/
Such a proposal to hold colleges more accountable for their pricing behaviors by making them help repay student loan debt has been discussed by Congress, but not surprisingly, that piece of legislation is currently collecting dust on Capitol Hill.
Our government would do well to pass such a policy and reign in colleges that deserve much of the blame for the worsening student loan debt crisis in this country by hitting these institutions where it hurts: their wallets.