Allen loans have high default rate

Allen University has the highest student loan default rate in the state, according to figures released Monday by the U.S. Department of Education.

Just over 26 percent of Allen borrowers whose first loan repayments came due between Oct. 1, 2006, and Sept. 30, 2007, were in default by Sept. 30, 2008, department figures show.

The Department of Education is changing the way it calculates default rates and put together a three-year examination of default rates to give colleges and universities a heads-up on what the new procedures will look like.

No sanctions will be imposed on schools on the basis of the figures released Monday, an official with the department said.

When the department calculates official rates, the federal government could bar students from using Pell Grants or other federal assistance at a college or university if its default rate exceeds 25 percent for three consecutive years or if it exceeds 40 percent in a single year.

The figures released Monday show that Allen's default rate in 2007 was up sharply from the year before, when it was at 16.4 percent, and from 2005, when it was at 16.5 percent.

Allen officials declined to comment on the default rate or to describe what efforts, if any, are being made to make sure federal assistance to its students is being repaid in a timely manner.

Benedict College faced the possibility of eventual federal sanction in 2005, when its default rate was at 26 percent. But Benedict's students have compiled a better record of repayment since then, reducing the school's default rate to 22.5 percent in 2006 and 21.9 percent in 2007.

Allen, Benedict and Clinton Junior College, which had a default rate of 22.4 percent in 2007, were the only schools in the state with a default rate above 20 percent.

The average default rate for schools in South Carolina was 5.4 percent, the second-lowest rate in the South.

Only Virginia, which had a default rate of 5.3 percent, had a lower average rate.

Texas, at 9.3 percent, and Arkansas, at 9 percent, had the highest default rates in the region.

The average default rate for schools across the country was 6.7 percent in 2007, up from 5.2 percent the year before.

Nationally and in South Carolina, default rates at private colleges and universities were generally lower than those of public schools. And historically black colleges and universities had higher rates than other schools.

The University of South Carolina's Columbia campus had a default rate of 1.8 percent in 2007. Clemson University's default rate was 1.2 percent. The College of Charleston's default rate was 2.2 percent.

Coastal Carolina University's rate was 2.9 percent, and Winthrop University's rate was 4 percent.

Wofford College had a default rate of zero. Furman's default rate was .2 percent, and Presbyterian College was at .5 percent.

S.C. State University's default rate stood at 9 percent, and Claflin University's was 12.3 percent. Voorhees College's default rate was at 13.4 percent.

"The economic downturn likely had a significant impact on the borrowers captured in these rates," U.S. Secretary of Education Arne Duncan said in a statement released by his department on Monday. "The Department is reaching out to make sure current and prospective student borrowers are aware of the many flexible repayment options designed to assist them with their financial obligations."