September 25, 2007 :: Oklahoma Shows Drop in Student Loan Cohort Default Rate
The Oklahoma Guaranteed Student Loan Program (OGSLP), Oklahoma’s primary guarantor of Federal Family Education Loan (FFEL) Program student loans, reports that the state’s student loan cohort default rate has dropped significantly.
The rate is the U.S. Department of Education’s (USDE) primary indicator of borrower success in the repayment of student loans, and according to figures recently released by USDE, Oklahoma’s cohort default rate fell to 5.8 percent in 2005 from 6.5 percent in 2004. This means that more than 94 percent of student loan borrowers in Oklahoma are repaying their federal loans, which are secured with no collateral or demonstrated credit history. In comparison, the national cohort default rate was more than 22 percent in 1990.
The USDE defines the cohort default rate as the percentage of borrowers who have defaulted on federal student loans within 12 to 24 months of entering repayment, which usually begins six months after the borrower leaves school.
OGSLP officials attribute the reduction in loan defaults to a wide spectrum of outreach and educational programs allowing them to provide direct assistance to institutions and borrowers. Programs also support the default prevention efforts of schools and lenders in the Oklahoma student loan community.
“OGSLP focuses on developing strong relationships with our customers, reaching out to borrowers through early assistance, financial literacy and default prevention initiatives,” said Mary Mowdy, OGSLP executive director.
An industry pioneer in the areas of early assistance and financial literacy, OGSLP communicates with borrowers about repayment before it begins and helps them make the often-complicated transition to financial independence after college. OGSLP developed the Default Prevention School Tool to help educational institutions track and contact at-risk borrowers. Other efforts include numerous printed materials and online resources to educate students about loan management, repayment and personal finance.
“Our agency isn’t the only one dedicated to this level of student support. Default rates sometimes fluctuate depending on the economy and various other factors, but the FFEL Program community maintains its commitment to borrower education that emphasizes sound money management and prevents loan default,” Mowdy said.
To learn more about OGSLP’s outreach and educational programs, call (800) 442-8642 or visit www.ogslp.org.
The Oklahoma Guaranteed Student Loan Program, a division of the Oklahoma State Regents for Higher Education, serves as the primary guarantor for Oklahoma students and post-secondary institutions, insuring lenders against default, bankruptcy, disability or death of student loan borrowers.