In Maine, student loan default rate falls just below nationwide rate

By Mike Brown | Oct 28, 2019

It’s no secret that the United States has a student loan debt problem. In fact, people are already labeling it as a full-blown crisis.

Outstanding student loan debt in the U.S. is at its highest in history, which is at $1.6 trillion. Student loan debt is the second highest form of consumer debt in the country, second only to mortgage debt.

Recent figures from LendEDU report the average student loan debt per borrower figure to be $28,565; a considerable amount of money to be repaid upon graduation and will likely linger with most young Americans until their early thirties. Such a burden can significantly hamper young, eager consumers from moving forward to become homeowners and start families.

Unfortunately, as colleges across the country continue to raise tuition to unprecedented heights and as bachelor's degrees continue to be seen as the prerequisite for landing a good-paying job, the situation only looks like it will worsen.

For federal student loans, student loan default typically kicks in after a borrower is 270 days late on his or her payment. For private student loans, the timetable is a bit more opaque but default usually occurs after a payment is three to four months late.

The consequences of student loan debt default can be severe and can include things like the government garnishing the defaulter’s wages, tax refunds, or Social Security benefits. Further, their credit score will be dinged significantly, which will impact their ability to qualify for a mortgage or a consumer-friendly credit card. Lastly, if court orders are ignored when a debt collector is trying to put the defaulter before a judge, the defaulter can be arrested by U.S. Marshals for contempt of court.

And, according to a new report from LendEDU based on recently released numbers from the Department of Education, the national student loan default rate currently sits at 10.1%. Considering there are 44.5 million student loan borrowers in the U.S., this means that just about 4.5 million Americans are in default on their student loans.

While the national student loan default rate was 10.1%, the default rate in the state of Maine was slightly lower, 9.86%. This percentage was good enough to keep Maine in the top half of U.S. states and Washington D.C. when it comes to the lowest default rates, 23rd to be precise.

Specifically among the 40 institutions in Maine, there were 18,937 borrowers in repayment and 1,867 of them were in default.

There were a number of schools in Maine that posted exceptionally low default numbers, including Colby College (0%), the Institute for Doctoral Studies in the Visual Arts (0%), Maine College of Health Professions (0.8%), Bates College (1.4%), Maine Maritime Academy (2.1%), the Landing School of Boat-building and Design (2.1%), University of New England (2.4%), Bowdoin College (2.5%), College of the Atlantic (2.8%), and Saint Joseph’s College (3.3%).

On the other end of the spectrum, the schools that were bringing Maine’s collective default up were Washington County Community College (25.2%), Seacoast Career Schools (20%), Northern Maine Community College (18%), University of Maine – Machias (18%), Beal College (17.8%), Central Maine Community College (17.3%), Eastern Maine Community College (17.2%), Capilo School of Hair Design (17.1%), University of Maine – Augusta (16.8%), and Empire Beauty School (15.2%).

While Maine more or less was sandwiched in the middle of all 50 states and Washington D.C. when it came to student loan default rates, Massachusetts led the way with the lowest default rate in the country (5.82%), while Nevada had the highest default rate in the nation by a sizable margin (18.16%).

Not surprisingly, for-profit schools had the highest collective default rate (15.2%), while the rate was 9.6% at public schools, and 6.6% at nonprofit private institutions. It was somewhat shocking to see public schools have a higher default rate than private schools as the tuition at public institutions is considerably less than that at private campuses.

Finally, when it came to specific school types, the default rate at historically black colleges and universities (HBCUs) was 15.66%, while it was 17.37% at Native American institutions. At Hispanic colleges the number was 9.07%, and at women’s colleges the default rate was 5.35%. At non-designated schools, the default rate was 9.45%.

Avoiding student loan debt and possibly default can be really difficult for a young American that is feeling the pressure to attain a bachelor’s degree no matter the cost. When making the decision on where to attend college, a prospective student must seriously weigh the potential financial outcomes of each school. If one school is offering a larger scholarship than a person’s dream school, is going to the latter worth it even if it means taking on more student loan debt?

Further, if a young consumer already knows the career path that they want to head on, he or she must decide if an expensive, four-year institution is necessary for that path. Can the same goal be achieved by attending a cheaper trade school or community college? Is any type of higher education even needed or can the experience be gained through just getting right into the work.

Finally, if one does find themselves in default, they must take the appropriate steps to remedy the situation. In a lot of instances, a call to the student loan lender to explain one’s situation and possibly negotiate a new repayment schedule may work. But most importantly, do not ignore student loan default as if it will go away. It will not! Only by dealing with the lender or potential legal authority will the default problem get resolved.

Comments (3)
Posted by: Francis Mazzeo, Jr. | Oct 29, 2019 14:18

The person was ranked last in their graduation class from Medical School was called Doctor.



Posted by: Francis Mazzeo, Jr. | Oct 29, 2019 14:15

The world needs more educated idiots.



Posted by: Mary A McKeever | Oct 29, 2019 13:19

Sadly, not every one needs a college degree. Hard labor and good initiative brings personal results without a degree. Why is it that everyone has to get a college degree? There are good trade schools and thus guaranteed good jobs. Our High Schools teach good trade skills. Just wondering????

 



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