The latest trend
September 30, 2021
It's a downward trend, and that's a good thing.
The Department of Education today released the latest default rate, which dropped 2.4 percent from 9.7 percent for FY2017 to 7.3 percent for FY2018.
And while the downward trend is no doubt good news, the question that might be in the back of a lot of people's minds – at least those interested in student loan default rates – is whether the trend will continue.
It's hard to say what the impact will be in the future when they release other default rates – especially with the unknown impact of the pandemic on borrowers' ability to repay when the student loan suspension ends early next year.
Students and borrowers may need a lot of support as they transition back to repayment or to repayment for the first time. And many organizations, including servicers, nonprofits, and the Department of Education, are taking some action to assist those borrowers. That is also good news.
Default rates have been going down for the last several years and the last thing we want to see is a reversal of that trend.