BATESVILLE, AR (KAIT) - The U.S. Department of Education recently released the official fiscal year 2009 national student loan cohort default rate, which has risen to 8.8 percent, up from 7.0 percent in fiscal year 2008. The University of Arkansas Community College at Batesville (UACCB), though, has a default rate that is three times the national average – posting a signficant gain of 26.5 percent.
"We are responsible for that default rate every year," Kristen Cross, director of financial aid, said. "And, as that goes up, there are some things that could come in the future – some sanctions from the Department of Education if we don't get that under control."
The fiscal year 2009 cohort consists of borrowers whose first loan repayments came due between Oct. 1, 2008, and Sept. 30, 2009, and who defaulted before Sept. 30, 2010. The Department of Education reported 309 UACCB students entered repayment during that time, but 82 students failed to pay.
"We don't advertise student loans very much. We hope that those would be a last resort for students," Cross said.
Cross added that taking out loans are discouraged because of the low cost of attendance, but UACCB has recently adopted new methods to curb the default rate. Those initiatives include a separate application for loans, submitting a family budget before loan approval and one-on-one counseling.
"We felt like if we could be very intrusive, very one-on-one with our students, that they would have more of an opportunity to realize the end goal," Chancellor Deborah Frazier said.
Instead of loans, students are encourage to use money, like Pell grants, that they do not have to pay back. UACCB, however, could lose its ability to access federal student aid if it maintains a default rate above 25 percent three years in a row.
"Of course, this is our first year to exceed that 25 percent, and, with all the initiatives we're undertaking, we're confident that we're able to get it under control," said Brian Berry, vice chancellor of enrollment management and student services.
The Department of Education reported UACCB's student loan cohort default rate at 18.5 percent in 2008, a decrease from 19.1 percent in fiscal year 2007.