Though student loan default rates have skyrocketed nationally, graduates from the University have managed to keep their default rates at a low level.

According to numbers released earlier this month by the U.S. Department of Education, University graduates default on their loans at a constant rate of 1.3 percent. Among graduates of all universities, about 8.8 percent of students default. This number rose from 7 percent the previous year. In Illinois overall, this rate is even higher at 9.1, up from 7.1 last year.

The University has the fourth lowest default rate of Big Ten schools, following the University of Michigan, the University of Wisconsin and Northwestern University.

If a graduate is unable to pay his or her monthly installment on loans, he or she enters into default.

“Defaulting is pretty much reaching financial ruin,” said Rich Williams, a higher education advocate at the Illinois Public Interest Research Group. “But these numbers are just the tip of the iceberg, in that the normal repayment period is between 10 to 20 years.”

These latest numbers reflect graduates of fiscal year 2009. These students have now been in the repayment phase of their student loans for two years.

“This is getting a very brief snapshot of what’s happening,” Williams said. “It doesn’t take into account how many students are defaulting after the two-year snapshot.”

Williams said the national rate especially has increased dramatically, doubling over the past six years, for a few reasons, chief among them rising tuition costs.

“When you look back about 12 years ago, only about a third of college students needed to borrow a loan to graduate,” he said. “The debt was $12,000 on average. But the most recent data says that more than two-thirds of students need to take out a loan, and the average debt is just under $25,000.”

This year the amount of student loan debt nationally will eclipse all credit card debt in the U.S., Williams said.

“That’s three trillion dollars,” he said. “It’s really getting to a crisis point.”

In addition, those who have defaulted on student loans cannot declare bankruptcy, just like tax evaders and those delinquent in child support payments, Williams said.

“You can declare bankruptcy debt on gambling debts and yacht payments,” he said. “But a defaulted student loan will stay on your credit score for life.”

The default rate of graduates from the Urbana campus has stayed below 2 percent, most recently reaching a high of 1.7 for graduates in fiscal year 2007. Randy Kangas, associate vice president for planning and budget, attributed this low rate to the post-graduate success of many students.

“Urbana has very high graduation rate,” Kangas said. “Students here are highly recruited, get good jobs, pay their loans and actually graduate.”

Dan Mann, head of the Office of Financial Aid, echoed Kangas’ evaluation of the low default rate, citing job acquisition of University graduates.

“I’m pleasantly surprised and pleased our rate stayed the same,” Mann said.

Williams said there are a few ways to minimize student loan debt to the point of default. He pointed to educated consumer choices as a primary factor and advised to only borrow money when absolutely needed.

“Default should be the absolute end. No student should hit default,” Williams said.