Student loan defaults down at Mohave Community College
The number of students who default on student loans has dropped significantly at Mohave Community College.
Interim MCC President Diana Stithem said the college’s cohort default rate has vastly improved from its record low about a decade ago.
“Over years of hard work, we are bringing it down,” Stithem said.
“Cohort default rate” is a term used by the U.S. Department of Education. Schools with high default rates may lose their eligibility to participate in federal student aid programs.
Currently, MCC’s rate is 14.74 percent. This represents a 60 percent decrease in MCC’s three-year rate since it was first released at 36.5 percent.
At the meeting, Stithem recognized financial aid department staff for helping shave down the rate. They were Lisa Downey, Brenda Averett, Corrie Valencia, Ann Morse and Heather Patenaude.
“It was good money well spent,” noted board member Judy Selberg during the meeting. She was referring to the various consultants and agencies the college worked with to improve its cohort default rate.
On Tuesday, governing board President Julie Bare explained why MCC had such a high rate 10 years ago.
“During the economic downturn in 2007-2009, Mohave County was hit hard. When unemployment rises, so did our enrollment as people returned to school to gain new skills and perhaps change careers. Most of them took out student loans. Those who were not academically successful dropped out of school without completing a program… Unfortunately, many became loan defaulters,” she said via email.
It is highly unlikely that MCC will see high default numbers again. The college developed a definitive plan to promote successful borrower repayment. It begins with a financial literacy course for entering students.
“Federal guidelines for student loans are different than they were ten-plus years ago,” Bare said. “The college financial aid office continues to appropriately monitor the entire process.”
Also, more recent federal regulations have tightened up the borrowing eligibility rules so that only academically progressing students can continue to borrow.
Nationally, outstanding student loan debt stood at $1.46 trillion in the fourth quarter of 2018, according to a report by the Federal Reserve Bank of New York. Those aged 18 to 29 had the most college debt — more than $1 trillion.