Default rates on student loans nationally have been falling for years. In 2003, the U.S. Department of Education didn't sanction a single school for exceeding its threshold for default rates. That said, students from Florida schools fall at the negative end of the positive trend: They usually have among the highest rates in the country of defaulting on their federal student loans.

Three years ago, the national default rate was 4.5%, but in Florida, 6% of the students who were supposed to begin paying their loans back were more than 270 days delinquent by the next year. Two Florida public universities had a default rate above the national rate. All the community colleges whose students borrowed money were at or above the national rate. Several private, non-profit institutions also had student loans go bad at higher than the national rate. Nearly all of the larger for-profit schools also had default rates higher than the national rate.

Janie Westberry, director of federal programs at the Office of Student Financial Assistance, attributes Florida's high rate to the state's more transient population and its large community college system. Two-year degree students have higher default rates than four-year degree students, she explains.

For-profit Florida Metropolitan University and National School of Technology, units of Santa Ana, Calif.-based Corinthian Colleges, also see student makeup behind their relatively high default rates. Their average student is 25 or older, has a job and family responsibilities and is less likely to receive parental support, says Florida Metropolitan President Jan Schoonmaker. "In general, our students have more economic obstacles to overcome in completing their education and in repaying their loans," Schoonmaker says. "That said, the majority of our students do graduate and do repay their loans."

Art Keiser, founder and chancellor of the for-profit Keiser College, says his school's default rate resembles that of community colleges' because it serves the same type of student. Keiser expects to see his students' default rate drop significantly in new data that was to have been released last month (too late to include in this publication). The school is increasing the numbers of bachelor's and graduate degree candidates. "Students default; schools don't," Keiser says. "The better the collection effort, the better the default rate."

In a 2003 review, the Legislature's Office of Program Policy Analysis and Government Accountability urged the state financial assistance office to do more to prevent defaults. Jeanine Blomberg, state education department chief of staff, says new, aggressive programs have been implemented to cut defaults. The loan guarantee agency business is a competitive field, and Florida is anxious not to lose business to other guarantors. Blomberg says the state's $56 million in profits from student lending programs in the last five years has been used to increase financial aid to students.

(Click "next page" links below to see charts on Student Loan Default Rates.)

(Click "next page" links below to see charts on Student Loan Default Rates.)