The percentage of students who are defaulting on federal loans has declined to some of the lowest levels in recent years, according to findings released Wednesday by the U.S. Education Department.

Students who began repaying loans in 2011 are defaulting at a rate of 13.7%, compared with 14.7% for those who began repayments in 2010.

The drop spanned all sectors of education – from public to private institutions – even as about 650,000 more students began repaying loans in 2011 compared with 2010.

Federal education officials in recent years have created initiatives to help borrowers manage their debt, programs they credit with helping to lower default rates. Among those initiatives, for example, are counseling sessions to help students understand their loan obligations and how income-based repayment plans work.


“The number of students who default on their federal student loans is still too high, and we remain committed to working with postsecondary education institutions and borrowers to ensure that student debt is manageable,” U.S. Education Secretary Arne Duncan said in a statement.

Despite the lower default rates, they remain higher than pre-recession levels.

The department singled out 20 for-profit schools and one continuing education school for having default rates so high they could be denied eligibility for loans and grants from the government.

Among those schools is Coast Career Institute in Los Angeles and San Diego College.


“I encourage institutions that may be subject to sanctions to communicate with their students to ensure that they understand the implications of a potential loss of access to federal loans,” Duncan said in the statement.

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