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Things may be changing, but the recovery rates on defaulted student loans used to be 120%, meaning that the government was collecting an additional 20¢ on each
by projektfu 10y ago
Things may be changing, but the recovery rates on defaulted student loans used to be 120%, meaning that the government was collecting an additional 20¢ on each dollar in default. This is in comparison to programs like SBA that have recovery rates around 50%. When you factor in an already high interest rate, this state of affairs is profitable.
- antisthenes 10y agoDo you have a source for that? A 120% recovery on defaulted loans seems insane.
- projektfu 10y agoI'm not sure what year I read that, or what article it was in, but after some cursory searching, in 2014, the recovery rate was 103-111%. Recovery rates are much higher in student loans because they cannot be discharged. So 120% is certainly not out of the question some years. https://www2.ed.gov/about/overview/budget/budget14/justifications/s-loansoverview.pdf https://www2.ed.gov/about/overview/budget/budget14/justifica... In FY 2016: 100-112% https://www2.ed.gov/about/overview/budget/budget16/justifications/r-sloverview.pdf https://www2.ed.gov/about/overview/budget/budget16/justifica...