Have Student Debt Repayment Rates Bottomed?

Student repayment rates continues to decline, although the trend seems to be slowing, according to the most recent College Scorecard data. This data measures repayment rates at 1,3,5, and 7 years. Repayment rates and default rates are very different. Repayment rates are the percentage of students who have made progress in paying them down (i.e. have paid down at least $1 in the initial balance of their loans) after entering repayment. Default rates measure the worst-case scenario for repayment outcomes and can be manipulated through deferments and forbearances. 

 

To create this composite picture, we took the average repayment rate by institution and multiplied it by the number of students being measured to come up with an institutional average and then aggregated the data by year. 

 

Three-Year Repayment Rates

 

 Five-Year Repayment Rates

Seven-Year Repayment Rates

The One-Year Repayment Rates were not updated and the last year we have is 2014. The Three-Year Repayment Rate has rebounded from 30.45% to 31.03% in 2016. The Five-Year Repayment Rate has declined from 38.55% to 36.42% and the Seven-Year Repayment Rate has declined from 53.23% to 46.28%. The trending graphs are shown below. Obviously the time horizon is the key. Those entering into repayment during the Great Recession continue to struggle to repay their debts whereas those entering into debt outside of the Great Recession seem to be doing better. On the other hand, we may be so accustomed to poor performance that we still accept that two out of three students do not pay their student debts down when they are due, even five years into the repayment cycle.

 

Share This Story

Similar Posts

  • Are Outpatient Imaging Quality Measures Effective?

    CMS began developing measures evaluating imaging efficiency back in 2007. These performance measures have been distributed as part of Hospital Compare for the past four years. Lower percentages suggest more efficient use of medical imaging. The purpose of reporting these measures is to reduce unnecessary exposure to contrast materials and/or…

  • CMS Introduces New Hospital Returns Measure

    The most recent batch of Hospital Compare data has expanded the whole area of readmissions, returns, and deaths. There are now separate measures for mortality rates, readmissions, and hospital returns. The hospital returns measure is brand new, with the most recent data through June 2016, and applies to heart attack…

  • Nursing Home Coverage of the Elderly

    While long-term care services more than the elderly, approximately 63% of residents are 65 or older. According to the Administration on Aging, population 65 years or older will increase from 14.1% of the population to 21.7% of the population by 2040. As the population ages over the course of the…

  • Student Debt Continues to Rise – Repayments Flat

    Last week, the Government Accountability Offices announced that the federal government will forgive a whopping $108 billion in student loans in the coming years. Prognosticators project a coming economic doom as the student debt crisis approaches mortgage meltdown proportions.   Last week we focused on the earnings of students six…

  • New Violence Against Women Data on Campuses

    A slug of new data has recently been released covering campus statistics on violence against women. This data was mandated by the Violence Against Women Reauthorization Act of 2013 (VAWA) and is added to numerous other statistics required under the Campus Crime Statistics Act, or Clery Act. College institutions must…