Last year, OU had the second highest three-year default rate of large public universities.
About 11 percent of Ohio University graduates were unable to make student loan payments in recent years.
OU’s three-year loan default rate has dropped from 15 percent to about 11 percent, according to 2015 university data.
OU’s rate now is lower than the national average of 11.8 percent for students who defaulted in the three fiscal years before Sept. 30, 2014.
College graduates default on their loans when they are unable to pay on their loans for nine months, or 270 days.
“There’s been increased attention at a national level on delinquency and default in the past few years,” Valerie Miller, director of student financial aid and scholarships, said.
Last year, OU ranked second nationally for three-year loan default rates for large public universities, according to a previous Post report.
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Ohio’s average three-year default rate is 14.6 percent, according to the U.S. Department of Education.
Miller said it’s nearly impossible to speculate about the cause for the increases and decreases of the loan default rate. She also said the university has tried to reduce the default rates.
“We are working with a vendor who specializes in default management to help assure that students who are nearing default are being regularly contacted both to inform them of the responsibility assumed in repaying student loans, as well as the rights available as borrowers,” Miller said.
She said the university internally reviews delinquency reports and sends letters to at-risk students. That information also is shared with the regional campuses.
Of OU undergraduates who graduated between July 1, 2013 and June 30, 2014, 66 percent had loans.
If a university’s default rate reaches a certain point, the university could lose federal funding.
“It can if a school’s default rate is equal to or greater than 30 percent for two years in a row, then the school works more directly on a more accelerated level with the Department of Education,” Miller said. “If resolution doesn’t come, certainly they can revisit student aid eligibility.”
Matt Merkel, a junior studying marketing, said he expected OU’s default rate to be higher.
“Eleven percent isn’t as high as I thought it would be,” he said. “It’s a high number, but with the cost of school and loans, I thought it would be higher.”
Allie Chaney, a freshman studying adolescent-to-young adult language arts, said she understands why students might not be able to pay on their loans.
“We’ve already paid so much money to be here, and jobs’ starting salaries aren’t as high,” she said. “We’re kind of chained to those payments.”
Chaney said the cost of interest and the cost of tuition could be a factor in how students repay their loans.
“They’re so high, and they just keep getting higher,” Chaney said. “I think if (the default rate) is high, it’s because tuition is so high.”
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