State financial literacy efforts promote importance of loan repayment
According to the U.S. Department of Education, Missouri’s three-year loan default rate decreased two-tenths of a percent, keeping Missouri’s rate lower than many of its neighboring states and on par with the national rate.
Missouri’s student loan default rate dropped from 9.9 percent to 9.7 percent. The national rate decreased from 10.1 percent to 9.7 percent. While some states see more borrowers defaulting, Missouri continues to see a decrease, moving it from number 26 last year, down to number 23.
More than 83,000 Missourians entered repayment on student loans during the reporting period.
“We are pleased to see this steady decline in default rates in Missouri,” said Zora Mulligan, commissioner of higher education. “Students entering repayment is a confirmation that colleges and universities are helping students to make smart financial decisions, and to only borrow what they need.”
The Missouri Department of Higher Education & Workforce Development administered a Default Prevention Grant Program for 18 years, providing funds and training to higher education institutions for student-focused financial literacy programs. The grant ended in June of 2018, but the impact of those efforts will continue to be seen due to the timing of default rate reporting. The department continues to promote financial literacy, and the importance of smart borrowing and loan repayment, among high school and college students.
The U.S. Department of Education figures are based on default rates for borrowers whose first loan repayment came due between Oct. 1, 2016, and Sept. 30, 2017, and who defaulted on their loans before Sept. 30, 2019. Nationally, more than 4.2 million borrowers began student loan repayment during that time.
Default rates in neighboring states were: Arkansas, 13.2 percent; Illinois, 9.4 percent; Iowa, 8.2 percent; Kansas, 11.7 percent; Kentucky, 13.9 percent; Nebraska, 8.3 percent; Oklahoma, 14.2 percent; and Tennessee, 11.5 percent.
About the Missouri Department of Higher Education & Workforce Development: The department works to empower Missourians with the skills and education needed for success. More information about MDHEWD can be found at https://dhewd.mo.gov or on Facebook and Twitter @MoDHEWD.