(Wall Street Journal) — Default rates on federal student loans have risen sharply in recent years, the U.S. Department of Education reported Monday, blaming the increase primarily on weak job growth in a tepid economy. ”These hard economic times have made it even more difficult for student borrowers to repay their loans,” Education Secretary Arne Duncan said in a statement. By Sept. 30, 2010, 8.8% of federal student loans whose payments started coming due in the previous fiscal year had fallen into default, up from 7% in fiscal 2008. The results were skewed higher by for-profit colleges, whose students’ default rate jumped to 15% from 11.6%. The disproportionate role of for-profit schools in student-loan default rates was reflected in the Department of Education’s announcement Monday, which named five schools across the U.S. that face possible sanctions because of extremely high default rates. Of the five, four are for-profit schools.
