Share of Defaulters and Three-Year Default Rates by Loan Balance

Thirty-five percent of the borrowers who entered repayment in 2010-11 and defaulted on their federal loans within three years owed less than $5,000. Another 31% owed between $5,000 and $10,000. Only 4% owed more than $40,000.

Figure 2016_12B: Share of Defaulters and Three-Year Federal Student Loan Default Rate Among Borrowers Entering Repayment in 2010-11, by Loan Balance

 Share of Defaulters and Three-Year Federal Student Loan Default Rate Among Borrowers Entering Repayment in 2010-11, by Loan Balance

Notes & Sources 

Notes: Loan balance is measured at the time the borrower entered repayment.

Sources: Council of Economic Advisers (2016), Investing in Higher Education: Benefits, Challenges, and the State of Student Debt, Figure 27.

  • Student loan default rates are highest for borrowers with less than $5,000 in debt. Default rates are lower for those with higher loan balances.
  • The high default rates for borrowers with low balances are related to the high default rates for non-completers. Students tend to borrow more as they stay in college longer and earn degrees. Many of those holding the highest levels of debt borrowed for graduate school.