ALBUQUERQUE, N.M. — Following the release of two national reviews of student debt and defaults, two University of New Mexico officials told the Board of Regents on Friday that such defaults are largely attributable to students who don’t complete school.
The officials also vowed to increase the university’s graduation rate.
Last week, the Journal reported that New Mexico students have the nation’s highest default rate, according to the U.S. Department of Education. This week, an independent nonprofit announced that graduates of New Mexico’s four-year institutions have the lowest average student loan debt in the country. New Mexico is the only state where the average debt upon graduation is less than $20,000.
UNM Provost Chaouki Abdallah told the regents Friday that student debt should not exceed a year’s salary and that most defaulters are former students who failed to graduate or obtain a credential.
“If they don’t graduate, they’re sentenced to a lifetime of not being able to pay their debts,” Abdallah said.
Later in the meeting, Terry Babbitt, associate vice president for enrollment management, agreed. In a presentation on debt and defaults at the university, Babbitt referred to a series of slides that showed UNM’s average debt is higher than the state average, but that UNM students not only borrow less than their national peers, they borrow less often.
Most striking, however, was the data Babbitt presented on default rates.
At the main campus, that rate is 9.3 percent. But at UNM’s branch campuses, it ranged from 12.5 percent at Los Alamos to 46.4 percent at Gallup. The rate for the university as a whole is about 13 percent, Babbitt said, which is near the national average for four-year schools.
Meanwhile, a sizeable majority of students who leave school without a credential default on their loans, Babbitt said. Percentages of defaulters without degrees or credentials range from 67 at Los Alamos to 74 at the main campus to 99 at the Valencia County branch. At the Taos and Gallup campuses, 89 percent of students who did not receive a credential defaulted on their loans.
Babbitt pointed out that the actual number of defaulters is relatively low, with fewer than 100, for example, at the Valencia County branch. Still, more than 80 percent of defaulters at the state’s flagship university did not complete a credential.
Earlier this week, the Institute for College Access & Success reported that 69 percent of graduates at public and private nonprofit colleges had taken out student loans in 2013.
Nationally, the average debt was $28,400 – 2 percent higher than it was in 2012. In New Mexico, the average was $18,656, the lowest in the country.
Officials attribute the state’s ranking, in part, to lottery-funded scholarships. The scholarships pay the bulk of most undergraduates’ tuition, greatly lowering the need to take out loans to get through school.