First Look: Repayment of Student Loans as of 2015

By Jael Greene

A recent report by the National Center for Education Statistics (NCES) examines repayment of federal student loans from two cohorts of students: those who started their postsecondary education in the 1995-96 academic year and those who started in the 2003-04 academic year. The report examines estimates of cumulative borrowing and repayment statuses of both cohorts as of June 30, 2015. 

Key findings include:

• Approximately 60% of both cohorts had taken out federal student loans by 2015.
  • 55% percent of the students in the 1995-96 cohort and 63% of the students in the 2003-04 cohort took out student loans within 12 years of starting college.
• After 12 years, students from both cohorts still owed significant portions of their student loans.
  • Students from the 1995-96 cohort still owed 70% of their student loan balance after 12 years and students from the 2003-04 cohort still owed 78% of their student loan balance after the same time period.
• Default rates varied between the two cohorts.
  • After 12 years, 18% of the borrowers in the 1995-96 cohort had defaulted on at least one federal student loan and 27% of borrowers in the 2003-04 cohort had defaulted on at least one of their loans.
  • After 12 years, 10% of the 1995-96 cohort and 16% of the 2003-04 cohort had defaulted on their most recent loan.
• The percentages of borrowers who paid their loans in full without default after 12 years was roughly similar for both cohorts.
  • 24% of borrowers in the 1995-96 cohort and 20% of borrowers in the 2003-04 cohort fully paid their loans without defaulting after 12 years.