Illinois Student Loan Default Rate Lower than National Average

SPRINGFIELD – Data recently released by the United States Department of Education shows that the State of Illinois continues to achieve lower default rates than the national average despite the current economic downturn.  The Fiscal Year 2000 cohort default rate for the Illinois Student Assistance Commission (ISAC) saw a slight increase from 4.5 percent to 4.9 percent, but still remained one point lower than the national average which increased from 5.2 to 5.9 percent.  The Commission’s Executive Director, Larry E. Matejka, credits the successful default rate to the agency’s dedication to helping prevent students from defaulting on their educational loans.

“We also attribute our success to the cooperation and help we receive from our school and lender clients, who share our interest in helping students," added Matejka.

He noted that the student and parent borrowers served by the agency deserve credit as well, for successfully honoring their repayment obligations.  Those obligations can be burdensome, as student reliance on loans to finance postsecondary education has grown significantly in the past decade.

Key to the Commission's extraordinary success in the area of default prevention is the emphasis it has placed on ensuring that borrowers understand the implications of the financial obligations they are assuming, and equally important, the consequences of failing to honor those obligations.  ISAC assists schools and lenders by providing both online entrance and exit debt counseling through a strategic sponsorship with the Mapping Your Future Web site.  ISAC also helps students by identifying those who are in the at-risk population to default, such as those who withdraw from school prior to graduating or who attend schools with high cohort default rates.  The agency’s Web site, www.isac-online.org, offers additional information on default prevention and useful links concerning loan repayment, personal financial planning, and career advice.For all parties involved - the borrower, the lender, the school, the state and federal governments, and the taxpayers who support these programs - the best possible outcome is to avoid default and facilitate repayment.  When a student ends up in default, no one wins.

About ISAC
The Illinois Student Assistance Commission is the State’s centralized provider of financial assistance aimed at helping students and families access postsecondary education and/or training. Each year, the Commission awards an estimated $400 million in scholarship and grant aid to nearly 185,000 qualified students, and also provides an additional $740 million to borrowers through its student loan programs. The agency offers credit-based alternative loans, a 529 prepaid tuition program known as College Illinois!, and a broad array of outreach and informational services to ensure that families have access to the information they need to pay for a college education. More information is available by calling toll-free 800.899.ISAC (4722) or visiting the agency’s Web site at www.collegezone.com.