Two-year college students defaulting less

Loan default rates among two-year college students are dropping, but they remain higher than those for other college students. The Department of Education reported that the overall default rate on Direct Loans and Federal Family Education Loans fell from 5.2 percent in 2002 to 4.5 percent in 2003. But for public community colleges, 5.8 percent of students defaulted in fiscal year 2003; however, that default rate slid in recent years from 7.2 percent in 2001 and 6.7 percent in 2002.

Among those in proprietary two-year schools, 10.8 percent defaulted in 2001, dropping to 10.1 percent in 2002 and 7.9 percent in 2003. Among those attending nonprofit two-year schools, 9.3 percent defaulted in 2001 and 9.7 percent in 2002, dropping to 7.9 percent in 2003.

In a press release, the Education Department credited the drop in part to its "enhanced management and oversight of the federal loan programs," including its stepped-up education of students about college costs and repayment options. It didn't mention improving economic conditions.

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