Given the condition of the economy these past few years, more and more students are finding it difficult to get a job that would help pay off the bills, much less the student loans they have haunting them. This is starting to result in a large number of student loan defaults and today, the highest number of defaults is recorded to be in Arizona as reported by the U.S. Department of Education.
Out of 276,057 borrowers of federal student loans credited to Arizona, 44,216 of these were in default. This number is almost twice that of the following states with the highest default rates. California has 21,529 defaults and Texas has 21,405. Arizona’s percentage of student loan defaults is almost twice the national average.
The Department of Education is stipulating that the reason for this overwhelming figure is the presence of the University of Phoenix, which is a for-profit college giant. This observation coincides with the data that for-profit colleges have by far the highest student loan default rate among post secondary institutions. The recorded default rate of for-profit colleges is currently at 15 percent, while the rate for public colleges is at 7.2 percent. Also, private non-profit schools have the lowest rate recorded at only 4.6 percent.
The spokesman from the University of Phoenix, Chad Christian, put the blame on the bad economy, saying that colleges and universities all saw an increase in default rates as it is becoming increasingly difficult for working graduates to make ends meet. However, he also said that the University is “committed to helping our students understand and manage financial aid debt levels, and we continue to make significant investments in technology, learning and preparation to help our students succeed.”
These high numbers are disconcerting and it goes to show just how bleak the economic situation is. It’s hard enough for new graduates to establish themselves, much less to keep paying off a loan they made too early in their life.