In Community colleges, default rate for student loans continues to rise. The national average of default is 15.5 %.  But in community colleges it is on a average of 16.7%. This default level is five times higher than government instructed institutes and  almost three times higher than most private colleges.

Default rates vary by type of school. Colleges and universities need to maintain a three-year student loan default rate of 30 percent or lower in order to be eligible for federal financial aid. The schools need to maintain two-year default rates of 25 percent or lower.

The Official said there are several reasons for the higher default rates at the colleges, including the fact that graduates are less likely to land high-paying jobs. Advocates for higher education praised the overall success of graduating students who can pay their debts.

The public four-year schools did the best. The average three-year default rate is 3.1 percent, while national average is 7.1 percent. The four-year private schools did nearly as well, averaging a three-year default rate of 5.3 percent.

The community colleges averaged a three-year default rate of 16.7 percent, which higher than the 15.5 percent national average. But they also varied widely among schools.  Ellsworth Community College in Iowa Falls was at the top end, with a 23.1 percent default rate. Northwest Iowa Community College in Sheldon was at the low end, with an 8.2 percent rate.

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