October 05, 2015

FAME’s Student Loan Default Rate Second-Lowest in New England

The Finance Authority of Maine (FAME) continues to maintain impressively low cohort default rates for Maine student loan borrowers, despite increased borrowing and rising college costs. According to data recently released by the U.S. Department of Education, FAME’s federal Fiscal Year 2012 three-year cohort default rate was 5.6 percent. This represents a significant decrease compared to last year’s rate of 7.1 percent. By comparison, the national three-year average was 11.8 percent. The cumulative rate for other guaranty agencies like FAME was 8.3 percent. FAME reported the sixth-lowest rate in the nation, and the second-lowest in New England. FAME’s three-year cohort default rate is calculated based on the percentage of borrowers who enter repayment on certain Federal Family Education Loans (FFEL) loans during a particular federal fiscal year, October 1 to September 30, and default or meet other specified conditions prior to the end of the second following fiscal year. “FAME’s ability to maintain a low default rate benefits lenders, schools, and, most importantly, Maine students,” stated FAME Board Chair Ray Nowak. “FAME’s default rate is the result of expanded college access, financial education and debt management services that support financial aid offices and educate borrowers.” “These results show the value of the personalized financial education and default prevention efforts of FAME and our school and lender partners. FAME’s emphasis on default prevention is the right one for Maine students and families,” stated FAME Chief Executive Officer Bruce Wagner. FAME believes that financial education is the cornerstone of debt management and default prevention. Three years ago, FAME launched a collaborative effort with American Student Assistance that delivers SALT® financial education and debt management services free-of-charge to Maine students and alumni. The vast majority of Maine college students now have access to SALT’s proactive debt management services. In addition, Maine high school students also have access to SALT, allowing them to get an early start on managing their finances In 2016, FAME will continue its commitment to increasing financial education in K-12 schools by co-sponsoring “Fostering Financial Education in Maine Schools,” a financial education conference for Maine teachers, administrators, counselors and others. FAME also recently expanded its financial education efforts in Maine middle schools by offering free Claim Your Future® game kits to educators. Claim Your Future is a game that encourages students to explore education after high school, future careers, and money management. For more information, or to request a game kit, visit ClaimYourFuture.com.