Stonehill Tied For Lowest Default Rate on Student Loans In Mass
May 07, 2012
by Eric Convey
Boston Business Journal
It's graduation season for the state's colleges and universities, which means it also is time for recently sprung students to start thinking about how they'll repay their federally backed student loans.
If recent history is a guide, graduates of some institutions will do far better than their peers at others.
The Massachusetts Institute of Technology and Stonehill College were tied for the lowest default rates in 2009, the most recent year for which the federal government has made data available.
Only 0.2 percent of former students - the data includes dropouts and graduates - who began repaying loans in 2008 stopped doing so in 2009, according to the U.S. Department of Education.
Hampshire College, Harvard University, Babson College and Brandeis University also had default rates of 0.5 percent or less.
At the other end of the spectrum, Berklee College of Music (7.8 percent), Salem State University (6.9 percent), Mount Ida College (5.7 percent) and Anna Maria College (5.5 percent) posted the highest default rates in 2009. universities. -RT>
None came anywhere near the levels of default that could trigger federal sanctions.
Frank Mullen, director of financial aid at Berklee, noted that the 2009 figures were tabulated shortly after the economy tanked.
"I think we have to take into consideration the fact that the people who were graduating at that point were under far greater economic strains ... than the graduates who finished prior to them and even those who are finishing after them," Mullen said.
Mary Lou Retelle, executive vice president at Anna Maria, said the new president at the Paxton college has focused on addressing the repayment issue. Indeed, the college's default rate declined during a time when many colleges were seeing their rates increase amid the tough job market.
Retelle said demographics are a factor in repayment rates.
"The average income for our students and their families is about $65,000," she said. "With the economy being the way it is, we find that some have been having a little more difficulty helping our students meet their expenses."
A Salem State spokesman said the university serves a disproportionate percentage of students with substantial financial need. Additionally, she said, "Reductions in state support, thus increased fees, have hampered our students' ability to finance their education."
Berklee's Mullen said part of the school's approach is to get prospective students thinking early about the cost of an education there.
"We do counsel our students who plan to borrow and we try to give them the best advice we can and to make the right decision in selecting a school," he said. "It's not solely academic or performance, it's also a financial decision."
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