One in four Central Oregon Community College students who took out loans in 2010 have “defaulted,” or failed to pay back, these loans in the past three years, according to Kevin Multop, director of Financial Aid at COCC. To default, a student has to be 270 days past-due on their payment.
Defaulting on loans has consequences, according to Multop, like affecting credit and making students ineligible for any future financial aid.
But if the default rate continues to rise, according to Multop, every student at COCC could be affected. The Department of Education could get involved and COCC could lose its eligibility for financial aid.
“It’s important for students to understand that default [rate] doesn’t just affect them,” Multop said. “It affects all students at COCC.”
A few years ago, COCC’s default rate was considered better than average, according to Multop. While there have always been students who default, typically miscommunication was the cause–a student who moved and failed to receive payment reminders.
Alicia Moore, dean of students at COCC, believes the rise in default rates can be linked to rise in unemployment.
“There seems to be a correlation, and it makes sense,” Moore said. When unemployment rates rise, default rates rise as well.
“There’s no reason for a student to default on payments,” Multop said. “Student loans are designed to be very borrower-friendly.”
Students can get deferments on loan payments after college, according to Multop, or get the payment changed to reflect their income.
Moore cautions students to plan on entering a field that will allow them to pay off their loans.
“Be very intentional about where you’re going,” Moore said. “Be mindful about what employment options exist in your chosen field.”