New data released by the Department of Education last week showed that the rate of students who are able to repay their student loans within seven years is worse than originally thought.
The Department of Education admitted that it had initially inflated student loan repayment rates, with actual numbers showing that at least half of students at more than 1,000 schools defaulted or failed to pay down their debt by even $1 within seven years.
The false numbers, which had been released in 2015, are a result of a "technical programming error” where the Department of Education inflated the repayment rates for 99.8 percent of all colleges and trade schools in the United States.
This new information shows that the student loan crisis is reaching critical levels. In fact, loan delinquencies are rising toward 50 percent, and the Treasury Borrowing Advisory Committee has forecasted that there could be up to $3.3 trillion in outstanding student loans by 2024.
Even worse, none of the schools saw its repayment rate improve under the new numbers. In fact, some schools, like The University of Memphis, saw the repayment rate drop by as much as 20 percent. The University of Memphis said it was never made aware of the data changes and will be challenging the accuracy of this new information.
This isn’t the first time the Department of Education has come under fire. A government report recently criticized the department for the way it tracks information on student loan forgiveness.
The department “needs to be regularly audited so these issues can be discovered sooner,” says Robert Kelchen, an assistant professor of higher education at Seton Hall University.