WASHINGTON (September 18, 2009)—Texas ranks second in the country in the rate of federal student loan defaults and six of the eight colleges and universities in Central Texas have default rates that are higher than the state average.

The state’s default rate is 9.3 percent, second only to Arizona, which has a 9.8 percent default rate.

The Department of Education put the national default rate at 6.7 percent, up from 5.2 percent the previous fiscal year.

That’s still well below the all-time national high of 22.4 percent in fiscal 1990, but above the all-time low of 4.5 percent in fiscal 2003.

The figures are for students whose first loan repayments were due between Oct. 1, 2006, and Sept. 30, 2007, and who defaulted prior to Sept. 30, 2008.

“The economic downturn likely had a significant impact on the borrowers captured in these rates,” U.S. Secretary of Education Arne Duncan said.

“The Department is reaching out to make sure current and prospective student borrowers are aware of the many flexible repayment options designed to assist them with their financial obligations, such as the new Income-Based Repayment Plan.”

Texas State Technical College in Waco had an 18.5 percent default rate in fiscal 2007, the same as in 2006 and up from 14.4 percent in 2005.

Hill College in Hillsboro had a 17.5 percent default rate in 2007, up dramatically from 6.2 percent in 2006. In 2005, no loans were in repayment.

Navarro College in Corsicana had a 15.9 percent default rate in 2007, up from 13.8 percent in 2006 and 11.8 percent in 2005.

McLennan Community College in Waco had a 12.1 percent default rate in 2007, up from 9.8 percent in 2006 and 7.3 percent in 2005.

Temple College had an 11.8 percent default rate in 2007, up from 8.3 percent in 2006 and from 10.8 percent in 2005.

The Central Texas College District in Killeen had a 10.5 percent default rate in 2007, up from 9.3 percent in 2006, but down from 11.3 percent in 2005.

The University of Mary Hardin-Baylor in Belton had a 5.6 percent default rate in 2007, up from 3.9 percent in 2006 and 3.7 percent in 2005.

Baylor University had a 2.7 percent default rate in 2007, up from 2.2 percent in 2006 and 1.8 percent in 2005.

The University of Texas at Austin had a 2.7 percent default rate in 2007, up from 1.9 percent in 2006 and 2.1 percent in 2005.

Texas A&M University had a 2.5 percent default rate in 2007, up from 1.8 percent in 2006 and 2005.

Texas Tech University had a 3.3 percent default rate in 2007, up from 2 percent in 2006 and 2.8 percent in 2005.

The department says schools with excessive default rates may lose eligibility from one or more federal student aid programs.

This year, two schools, Healthy Hair Academy of Dallas and Jay’s Technical Institute of Houston, are both subject to sanctions for current cohort default rates that exceed 40 percent, the Department of Education said.