In Sept. 2013, Lane was under scrutiny by the U.S. Department of Education because the Cohort Default Rate (CDR) for student loans was at 30.6 percent, and 30 percent in 2014. At the risk of penalties, Lane reviewed the information used to calculate the CDR.
In order to avoid sanctions from the U.S. Department of Education a college must meet strict criteria. Helen Faith, LCC Director of Financial Aid said, “If an institution has a Cohort Default Rate (CDR) of 30 percent or higher for three consecutive years, the school is subject to loss of Pell Grants and Direct Loans for three years.”
After research, Lane challenged the CDR and ultimately got it dropped from 30.0 percent to 27.4 percent, allowing the college to narrowly avoid drastic sanctions. The most recent LCC default rate of 25 percent was reported about two weeks ago by the U.S. Department of Education.
Lane’s improved default rate is emblematic of a national trend. According to U.S. Department of Education this is the third straight year the average default rate has dropped.
When a student leaves school, and does not make a payment towards their loan within 270 days, their loan goes into default. A student who has a defaulted loan can experience many financial consequences including additional fees, garnishments and lawsuits.
The American Association of Community Colleges (AACC), suggests some changes which will help community colleges default rates. “These include, borrowing limits, and colleges having the authority to limit borrowing for high risk programs.”
Lane has included several resources to help students better understand loan debt. “In 2013, Lane began working with the American Student Assistance, a non-profit agency with a long record in helping students manage student loan debt, to provide a free lifetime SALT membership,” Faith said. SALT offers loan calculators, financial coaching and specialized courses to help with money management. Access to SALT can be found on MyLane, ‘My Finances’ tab.