DALLAS (AP) - Texas finished second in the nation for the rate of federal student loan defaults at 9.3% at a time when the economy struggles to recover.
The U.S. Department of Education put the national default rate at 6.7%, up from 5.2% the previous fiscal year. Arizona had a borrower default rate of 9.8%. The figures are for students whose first loan repayments were due between Oct. 1, 2006, and Sept. 30, 2007, and who defaulted prior to Sept. 30, 2008.
U.S. Secretary of Education Arne Duncan, in response to figures released Monday, said the economic downturn "likely had a significant impact on the borrowers captured in these rates." The department says schools with excessive default rates may lose eligibility from one or more federal student aid programs.