NM universities see loan default rates rise this year

By Emily Crowe

CMI staff writer


More New Mexico college graduates and dropouts are failing to repay their federal student loans, a trend that has prompted two local educational institutions to spend more hands-on time counseling students.

Statewide, colleges and universities have seen a steady increase in default rates for students who enrolled in fall 2010, according to U.S. Department of Education information.

All of New Mexico’s six main universities, with the exception of New Mexico Tech, saw rates rise this year, following national patterns.

At Eastern New Mexico University, 21.1 percent of students in the fall 2010 cohort weren’t repaying their loans, up from 18.1 percent in the 2009. ENMU also saw an increase in its student population in that time frame, with 12,727 in 2009 and 12,964 in 2010.

Clovis Community College saw a smaller increase in default rates at 20.4 percent in 2010, up from 18.1 in 2009. CCC’s student population also grew from 5,866 in 2009 to 6,467 in 2010.

ENMU President Steven Gamble said as long as the economy stays in a downturn, default rates will remain higher than the school would like to see.

“I think it’s the students’ inability to get the type of jobs that would provide them with the income to pay off the debts they owe,” he said.

April Chavez, director of financial aid at CCC, shared Gamble’s sentiment. She sees the weakened economy and students’ inability to find jobs after graduation as the main reasons for the trend.

Chavez said CCC has returned to face-to-face entrance counseling to help students better understand options available to them.

Likewise, Gamble said ENMU now holds mandatory counseling sessions for current students who take out loans to tell them about their obligation to pay them back and what happens if they don’t.

ENMU has also contracted with a company that specializes in helping schools lower their loan default rate by working with students no longer at the school to offer services on debt consolidation and making minimum payments.

In addition, both schools delay distribution of loan money to students until 30 days after the beginning of a semester.

“I think everybody is concerned with where the default rate is going nationwide,” Chavez said. “We’re keeping an eye on it and we have a default prevention team. It meets once a semester to see what we can do to help students.”

Gamble said ENMU is doing everything they know to do in order to get the default rates back down.

“If we can’t reduce our loan rate, we sure don’t want it to be because we aren’t taking it very seriously,” he said. “We know that without any action it’s not going to get any better.”

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