It builds personalized lists of loan providers that students can review on their computer screens. They can contact their financial aid providers by telephone or by clicking on a link to their Web sites to obtain more in depth loan information. Studies Show That Clearinghouse Helps Reduce Loan Default Rates Education Secretary Richard Riley recently announced with great fanfare that student loan default rates have fallen to their lowest level ever. The healthy economy and strong loan collection efforts by lenders and guarantors have contributed to the reduction. Technical delinquencies and defaults are those that occur when borrowers re-enroll in school after a break in their education or when they transfer between schools, and do not make loan payments.
Lenders think borrowers are out of school and are obligated to repay their loans.
Due to poor communications between delinquent borrowers, schools and lenders, prolonged delinquency periods and even defaults can occur. Several of their cohort default lists were compared with the all-enrolled database at the Clearinghouse to determine the number of defaulted borrowers who were actually enrolled at least half time during the cohort period. The CUNY study revealed a technical default rate of over 7 percent. It s a valuable service for us and our student borrowers. The Clearinghouse conducted another study in cooperation with USAF, the nation s largest loan guarantor.