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Student loan default rate at NMSU affects those who qualified for financial aid

When it comes to paying back student loans on time, New Mexicans rank dead last in the country, according to new numbers released last month by the U.S. Department of Education.

Data shows the national percentage of students who defaulted on their loans in 2013 was 11.3 percent. In New Mexico, 18.9 percent of students defaulted. The number at NMSU is even higher at 19.6 percent.

Vandeen McKenzie, the director of NMSU’s Financial Aid and Services office, said the university is working with the company Inceptia to contact students after they graduate to help them pay off their debt.

McKenzie told ABC-7 online counseling will now be required before a student takes out a loan and once again before graduation.

‘The concern is there, regardless of what the number is. The concern is always there once the student is going into default because they are affecting their credit, which we don’t want to happen,” McKenzie said.

“I was working at a grocery store and I didn’t make a lot of money, so I had other bills I had to pay as well, so it was like I’ll take the student loan this month and I’ll take the credit card the next month and the student loan this month and the credit card the next,” said NMSU student Stephanie Patterson, who has to pay off $26,000 in student loans.

McKenzie said the school contracted with Inceptia in 2012 after realizing the default rate was increasing. “They don’t wait until the students have defaulted, they try making contact once there’s any form of delinquency to get them back current so the students don’t end up in default,” McKenzie said.

The university is penalized if too many students go into default.

Last year, NMSU’s default rate reached 20 percent and students who qualified for financial aid were affected by those who defaulted because they could not receive all of their financial aid funds at once.

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