Rate of student loan default for Sooner graduates defies national trends
Student loans may be going unpaid across the country, but OU’s default rate on federal student loans remains low and one university official attributes this to the quality of OU graduates.
The two-year student loan default rate rose to 8.8 percent last year, up from 7 percent in the 2008 fiscal year, according to figures released Monday by the Department of Education.
The rate at OU is 3.8 percent, barely up from 3.6 percent in FY 2008 and one of the lowest rates in the nation.
That number is even more impressive considering 37 percent of OU undergraduate students receive some kind of federal student loan aid, according to the department’s Institute of Education Sciences.
Brad Burnett, associate vice president for enrollment and student financial services, credits the low rate to OU students.
“My first impression ... is that the student body here is just excellent,” Burnett said. “Their ability to go out and find work upon graduation ... that’s helping them pay their loans.”
Another explanation is the Financial Education and Counseling Center, formed six years ago per the request of University College. Student surveys showed they were interested in financial education, so Burnett began speaking on the subject during freshman Gateway classes, he said.
His lectures cover budgeting, credit cards and the ramifications of defaulting on student loans, on which you can’t file bankruptcy.
Burnett also encourages students to look at entry-level salaries of jobs in their fields so they have a reasonable idea of what they can afford post-graduation.
Burnett encourages students not to take student loans unless they need them. But if it comes down to getting a degree or not getting a degree, they’re a good investment, he said.
Another explanation for OU’s rate is more students are receiving private scholarships from the university, allowing them to avoid loans.
OU’s $250 million Campaign for Scholarships, now at $180 million, has allowed OU to more than double its private scholarships in the last five years, university spokesman Michael Nash said.
The campaign created the Sooner Heritage Scholarships, which targets students from middle-income families, students who wouldn’t qualify for Federal Pell Grants but also couldn’t pay for tuition outright, Burnett said. The program has provided more than $10.6 million in funds and almost 22,000 scholarships since its inception, Nash said.
To accommodate all the scholarships, the university added a scholarship center in Whitehand Hall about a year and a half ago, Burnett said. There students can apply for all private scholarships using the OU Common Scholarship Application instead of having to apply for them individually.
“Students are doing more financial planning than ever before,” Burnett said.
The Associated Press contributed to this report.