State financial literacy programs promote importance of loan repayment
Missouri ranks among the top 10 states nationwide in reducing student loan default rates, according to numbers released this week by the U.S. Department of Education.
The state’s three-year default rate decreased six-tenths of a percent, putting Missouri’s rate below the national average and lower than most of its neighboring states.
“We are very pleased to see a decline in default rates in Missouri. This is great news for our students and our state as a whole,” said Zora Mulligan, Missouri commissioner of higher education. “The efforts being made by our colleges and universities to help students make smart financial decisions is paying off.”
The Missouri Department of Higher Education’s Default Prevention Grant Program, now in its seventeenth year, focuses on reducing student loan default rates by promoting sound financial choices. The grants provide funding and training to higher education institutions for student-focused financial literacy programs that include information about borrowing money to pay for college and the importance of repaying student loans.
Missouri’s student loan default rate dropped from 11.5 percent to 10.9 percent. The national rate saw a slight increase – from 11.3 percent to 11.5 percent – after decreasing the past several years.
The U.S. Department of Education figures are based on default rates for borrowers whose first loan repayment came due between Oct. 1, 2013, and Sept. 30, 2014, and who defaulted on their loans before Sept. 30, 2016. Nationally, more than 5 million borrowers began student loan repayment during that time.
Just over 106,000 Missourians were repaying student loans during the reporting period.
Default rates in neighboring states were: Arkansas, 12.2 percent; Illinois, 10 percent; Iowa, 12.6 percent; Kansas, 12.4 percent; Kentucky, 14 percent; Nebraska, 8.5 percent; Oklahoma, 11.6 percent; and Tennessee, 11.8 percent.
In addition to its Default Prevention Grant Program, the Department of Higher Education promotes financial literacy through publications and school presentations for students and their families. For more information about the department’s programs, visit dhe.mo.gov/ppc/defaultprevention.php.