Student Loan Default Rate For New Jersey Revealed

A new report on student loan debt in the United States shows the default rate on the borrowed money in New Jersey is 9.5 percent. The state ranks 19th nationwide for the default rate on student loans, with the highest being 18.16 percent in Nevada and the lowest being 5.82 percent in Massachusetts.

According to the report from Lendedu, nationally the default rate was 10.1 percent. However, historically black colleges and universities had a higher national default rate, of 15.66 percent.

A federal student loan is considered to be in default if a payment is late by more than 270 days, or about nine months. The report says that standards for private student loans vary but generally a loan is considered to be in default if a payment is late by three or four months.

In New Jersey, out of 83,835 student loan borrowers, 7,963, are in default, which can lead to serious consequences, including having tax refunds, Social Security benefits or wages garnished as well as vastly lowered credit scores, the report notes.

According to the report, southern states typically had higher default rates while states in New England and the Midwest had some of the lowest default rates.

Outstanding student loan debt in the United States is at an all-time high of $1.6 trillion, making it the second-highest consumer debt category, according to Forbes.

Lendedu analyzed data from the U.S. Department of Education for the report. The data was released by the department on Sept. 23 and includes information for the 2016 fiscal year. (See the full methodology)