Representing nearly 375,000 men and women, defaults on student loans are reaching record highs. In new data from the U.S. Department of Education, 9.1 percent of borowers defaulted on their federal student loans within two years of their first payment in fiscal year 2011, following an 8.8 percent default rate the previous year.
A default represents someone who has missed his or her payment for 270 consecutive days.
Additionally, two schools—one in Puerto Rico and another in Virginia—lost their eligibility for federal aid last year, including Pell grants, because their students' two-year default rates topped 25 percent. To date, 218 colleges and universities registered three-year default rates of 30 percent or more.
The study, conducted by the U.S. Senate's education committee, found that 54 percent of students attending for-profit schools dropped out without a degree during the 2008-2009 school year. Bachelor programs at for-profit schools cost 20 percent more than public schools, according to the study.