More Missouri students paying back loans

The percentage of Missourians defaulting on their student loans has dropped slightly, according to a recent report by the U.S. Department of Education.

The latest data show the three-year default rate fell to 12.6 percent for Missouri students who were supposed to begin repaying their loans in fiscal year 2011, down from 13.1 percent the year before.

Defaults in Kansas were even lower, 11.1 percent.

Students in some nearby states aren’t doing as well. The default rate in Arkansas was 15.8 percent; Iowa, 17.3 percent; and Oklahoma,15.7 percent.

Nationwide, the default for fiscal year 2011 was 13.7 percent, down from 14.7 percent the year before.

“We are pleased to see Missouri’s default rate on the decline,” David Russell, the state commissioner of higher education, said in a statement Friday. “Efforts to help students make smart financial decisions clearly are paying off.”

Russell attributes the decline in part to a state program that puts money into financial literacy training for student borrowers attending the state’s colleges and universities.

“Missouri institutions are using these grants to educate student borrowers about the importance of minimizing their debt, following a budget and repaying their loans,” Russell said.

Fifty percent of the schools that participated in the financial literacy program in 2011 ended up with a default rate at or below 10 percent, Missouri education officials said.

In addition to several other statewide programs aimed at helping students avoid debt they can’t pay down, the state Higher Education Department hosts an event called Default Prevention Day. It’s an opportunity for colleges and universities to learn more about student loan default and how to prevent it.

The default rates reported recently by the U.S. Department of Education refer to borrowers whose first loan repayment came due between Oct. 1, 2010, and Sept. 30, 2011, and who defaulted on their loans before Sept. 30, 2013. More than 4.7 million borrowers nationally began paying back student loans during that time.

In Kansas, 5,428 student borrowers defaulted on their loans in that time; in Missouri, 12,503 defaulted.

This story was originally published October 4, 2014 at 8:48 PM with the headline "More Missouri students paying back loans."