While the student loan default rate is decreasing nationwide, the state of West Virginia has the second highest default rate in the country at 16.2 percent, according to the U.S. Department of Education.
Default occurs when a student loan recipient enters repayment after graduation or from withdrawing from class, but does not make a payment for more than 360 days or request a deferment or forbearance.
Student loan default not only negatively impacts a student, but also the college or university that they attended. When an institution of higher education’s student loan default rate reaches 30 percent or greater for three consecutive years or surpasses 40 percent for the latest year, they are at risk of losing their eligibility for federal Title IV loans and Pell Grants.
In 2013, New River Community and Technical College initiated the Borrow Smart campaign along with support from EdFinancial, a third-party default prevention provider, to address the increasing number of students defaulting on their loans as the college’s 2011 cohort default rate had risen to 39.5 percent.
In order to reduce the number of students in default, New River CTC formed the Default Management Task Force, a committee which outlined a default management plan along with the Borrow Smart campaign, headed by Financial Aid Director Patricia Harmon, who has 30 years of experience in administering college financial aid programs.
Borrow Smart focuses on educating students about financial literacy, the consequences of loan default and options to avoid default. Financial aid personnel counsel students that loans should be taken as a last resort and in the minimum amounts necessary.
New River CTC was able to reach at-risk borrowers and reduce the default rate for the 2012 cohort. The college’s official default rate for the 2013 cohort is 25.5 percent, which is higher than the national average of about 20 percent for community colleges, but is a tremendous improvement from just a few years ago.
Today fewer New River CTC students are taking out loans. Only 21.2 percent of students received a loan in 2015, down from 26.1 percent in 2013. In 2015, 66 percent of the college’s 2,924 students received some form of financial aid totaling $9.28 million with only $2.1 million in loans.
New River Community and Technical College serves nine counties in southeastern West Virginia from the Greenbrier Valley Campus (Lewisburg), Mercer County Campus (Princeton), Nicholas County Campus (Summersville) and Raleigh County Campus (Beaver/Beckley).
