Surprisingly, the less student debt a person owes, the more he or she is likely to default, the New York Fed found. The highest default rate— at nearly 34 percent — occurs among borrowers owing less than $5,000. Those owing more than $100,000 have a default rate of only 18 percent. The reason for this could be that low-income borrowers didn't complete their studies and are unemployed, or they finished school and have such low- paying jobs that they can't afford payments of even $50 a month.