Default rates on student loans dropped to 9.6% in fiscal year 1996, the first time it has dipped below the 10% mark, the Department of Education said Monday.
The 1996 data, the most recent available, also marks the sixth consecutive year that student loan default rates have fallen. In 1990 default rates hit a high of 22.4%
Secretary of Education Richard W. Riley said in a prepared statement that the strong economy and low unemployment rates contributed to the decline. "We have met our target date of lowering rates to 10% or less by the year 2002 well ahead of schedule," Mr. Riley said. "We've kept faith with taxpayers and students to ensure federal dollars aren't wasted."
In fiscal 1998, 5.9 million students borrowed $38 billion in federally guaranteed loans.
A spokesman for the Consumer Bankers Association said the industry deserves some of the credit. "Bankers typically are the front-line troops in default management," the spokesman said.