NCMC Student Loan Default Rate Down

The student loan default rate at North Central Missouri College has dropped nearly 2.5 percent in one year to below 20 percent, according to draft figures recently released by the U.S. Department of Education.
This is among the lowest among community colleges in the state of Missouri.
Default rates are calculated as a percentage of former students who are not making payments on their federal student loans. An institution with a high default rate faces sanctions from the federal government and can even lose the ability to provide federal aid to its students. Nearly $6.8 million of federal aid was processed at NCMC last year, with 85 percent of students receiving some type of financial aid. In order to continue serving students by offering federal aid, it is imperative that NCMC works toward decreasing its current default rate.
“Federal student loans are borrowed money and must be repaid with interest,” said Sarah Williamson, NCMC Financial Aid/Cashier. “Borrowers are required to start repaying student loans six months after they either graduate, leave school, or drop below halftime enrollment.”
Ms. Williamson said default occurs when a borrower has been delinquent for more than 270 days.
“Borrowers in default face severe legal consequences, including having their loan assigned to a collection agency, damaged credit rating, wage garnishment, withheld federal and state tax refunds, and ineligibility for additional federal student aid,” she said.
Ashley Buntin, associate director of financial aid, said a combination of things being done at NCMC have contributed significantly to the rate reduction.
“For the last several years, we have received a Missouri Department of Higher Education Default Prevention Grant,” Ms. Buntin said. “NCMC’s Default Prevention Team (staffed with personnel from both the financial aid and admissions offices) works with this grant to provide support for Default Prevention initiatives including the education of students in the areas of budgeting, smart borrowing, avoiding default and consequences of default.“
This week, the NCMC Financial Aid department is also participating in FAFSA Frenzy, a program designed to help future students file paperwork and inform themselves about federal funding for higher education.
“It is the responsibility of each member of the campus community to educate themselves on the individual and institutional effects of default,” Dean of Student Services Dr. Kristen Alley said. “Helping students make wise borrowing decisions and establish healthy repayment habits is critical to the success of North Central Missouri College and its students.”