Five-Year Federal Student Loan Default Rates by Institution Type over Time

Graduate students and undergraduates who borrow to attend selective colleges have the largest debts and the lowest default rates. Students who attend for-profit and public two-year colleges have the smallest debts and the highest default rates.

Figure 2016_11B: Five-Year Federal Student Loan Default Rates by Institution Type, Borrowers Entering Repayment in 1978-79 to 2008-09

 Five-Year Federal Student Loan Default Rates by Institution Type, Borrowers Entering Repayment in 1978-79 to 2008-09

Notes & Sources 

Notes: Institution type is based on the school in which students were enrolled at the time their first federal student loan was issued. Graduate-only borrowers are those who only borrowed to attend graduate school. Perkins and Parent PLUS loans are not included. Default rates in Figure 11B are based on defaults occurring within five calendar years from the date of entering repayment. Consumer Price Index for all urban consumers (CPI-U) was used to adjust median debt for inflation. See Looney and Yannelis (2015) for information on how college selectivity is defined.

Sources: Adam Looney and Constantine Yannelis (2015), “A Crisis in Student Loans? How Changes in the Characteristics of Borrowers and in the Institutions They Attended Contributed to Rising Loan Defaults,” Brookings Papers on Economic Activities.

  • Among borrowers from for-profit institutions who entered repayment in 2008-09, 47% defaulted on their loans within five years — down from a peak of 65% for the 1989-90 repayment cohort, but up from 29% for the 1998-99 repayment cohort.
  • Among students who only borrowed for graduate school and entered repayment in 2008-09, 5% defaulted on their loans within five years — down from 10% for the 1978-79 repayment cohort, but up from 3% for the 1998-99 repayment cohort.