U.S. Secretary of Education Margaret Spellings today announced that the FY 2004 national student loan cohort default rate was 5.1 percent, a small increase from last year's record-low rate of 4.5 percent and 77 percent lower than the all-time high of 22.4 percent set 14 years ago.

"I'm pleased to see that default rates remain at historically low levels. The new rate is the second-lowest ever recorded," Spellings said. "As the federally guaranteed student loan portfolio continues to grow, it is more important than ever that we continue our outreach to student borrowers to educate them about their responsibilities and the resources available to assist them in their repayment obligations."

The FY 2004 national default rate increased 0.6 percent from 4.5 percent in FY 2003. In addition to the national rate, the Department is also releasing rates for individual schools, states, types of postsecondary institutions, and other sectors of the federal loan industry.

Borrowers needing assistance in repaying their student loans can visit www.federalstudentaid.ed.gov or can contact the holders of their loans to learn about repayment options. For help locating their loan holders, borrowers may access www.nslds.ed.gov or may contact the Department's Federal Student Information Center at 1-800-4-FED-AID (1-800-433-3243).

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NOTE TO EDITORS: The FY 2004 default rates released today represent the most current data available and include data on borrowers who attended some 5,836 schools that participate in the Federal Family Education Loan and William D. Ford Federal Direct Loan programs. The FY 2004 default rate is the percentage of borrowers who began repaying their loans between Oct. 1, 2003, and Sept. 30, 2004, and who defaulted before Sept. 30, 2005.

Individual school default rates are posted on the department's website at http://www.ifap.ed.gov/DefaultManagement/DefaultManagement.html (click on Press Release hyperlink).

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