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CWC troubled by rising loan default rate
Apr 19, 2013 - By Katie Roenigk, Staff Writer
Central Wyoming College officials say loan default rates for local students are going in the "wrong direction."
Administrators this month said CWC's two-year draft cohort default rate increased to 18.9 percent in 2011, up from 14.1 percent in 2010. If the trend continues, CWC president Jo Anne McFarland said administrators could consider eliminating the school's student loan program altogether.
"That's not a decision that's been made," she said this week. "But it's an indication of our commitment to take this very, very seriously so as not to jeopardize our federal financial aid eligibility."
She added that the increase in loan default rates is not surprising, as the numbers represent students who attended CWC before certain debt management initiatives were implemented on campus beginning in 2011.
Administrators said the 2011 number represents federal loan borrowers who entered repayment between Oct. 1, 2010, and Sept. 30, 2011, and defaulted on their loans by the end of Sept. 2012. The 2010 number represents federal loan borrowers who entered repayment between Oct. 1, 2009, and Sept. 30, 2010, and defaulted by the end of Sept. 2012.
McFarland said students who borrow money now are required to undergo one-on-one loan counseling, and certain students must submit budgets and justification documents along with their loan applications. Beginning this fall, students will have to take a financial literacy course to meet their general educational requirements, and all first-time borrowers will have to pass the class with a C or better before that can receive all of their loan money.
CWC also is working with K12 school districts throughout the county to address issues students face when they transition from high school to college.
"We're tracking very, very carefully," McFarland said. "(This is) one of those problems that must be solved."
She is waiting to find out what CWC's three-year loan default rate might be, but McFarland guessed it likely will rise above 25 percent. She said a 30 percent three-year loan default rate triggers federal interventions and potential punitive actions after repeated offenses.