The Department of Education has announced that the number of people that are not making payments on their federal student loans within three years has fallen.
The national student loan default rate is now at 11.3% which is down from 11.8% in the previous year.
This statistic is closely monitored because a school will lose its access to federal student aid if it reaches a default rate of 30% or more.
In October of 2012, there were more than 5.2 million borrowers, spread out across 6,5155 schools, who began paying their student loans.
Out of those 5.2 million borrowers, 593,182 ended up defaulting on their loans.
These numbers are scattered based on the type of school the borrower attended.
Public colleges have a 11.3% default rate, which is down from 11.7%.
Private nonprofit colleges saw an increased rate to 7% from 6.8%.
And for profit colleges saw a decline from their previously recorded 15.8% to 15%.
The Education Secretary, John B. King Jr., believes the national default rate has lowered because of increased enrollment in the government’s repayment plans.
There are now more options available to repay student loans.
Borrowers are able to have a repayment plan which makes their payments a certain percentage of their income, which keeps a lot of people from defaulting.
[tweet_box design=”default” float=”none”]Income driven student loan repayment plans have seen an increase in usage of 140% since December of 2013. [/tweet_box]
While default rates are lowering, these numbers do not take into account students who are struggling to repay.
The default rate only takes into account students who are extremely behind on their loans.
The government has reported that 3.6 million people have loans in some form of delinquency.