HomeNewsState audit finds high default rate on need-based student loan program

State audit finds high default rate on need-based student loan program

Author

Date

by Dave Williams | Dec 2, 2021 | Capitol Beat News Service

ATLANTA – Georgia’s need-based, low-interest student-loan program has a high default rate that serves to limit its success, a new state audit has found.

About 31% of borrowers participating in the Student Access Loan (SAL) program default within three years of entering repayment, the Georgia Department of Audits & Accounts concluded in a report issued late last month.

That’s more than three times the default rate of federal student loan participants.

“Borrowers were more likely to default if they were enrolled in a technical college (vs. a four-year institution), were eligible for the federal Pell Grant, did not receive HOPE or Zell Miller aid (with the exception of the HOPE Grant), or did not earn a postsecondary credential prior to repayment,” according to the audit.

“We also found that on average defaulted borrowers earned approximately 40% less than those who remained in good standing.”

Since its inception in fiscal 2012, the SAL has provided about $266 million in loans to nearly 36,000 students. SAL receives $26 million in Georgia Lottery proceeds each year to help borrowers with postsecondary costs.

Since the lottery-funded HOPE Scholarships program is purely based on merit, the SAL is the primary vehicle for need-based student aid in Georgia.

Because of the HOPE and Zell Miller Scholarship, which goes to HOPE recipients with the highest grade-point averages, Georgia awards more grant dollars per undergraduate student than any other state in the country. However, Georgia devotes a smaller proportion of its state assistance to need-based aid compared to other Southeastern states.

The audit concludes it’s no surprise a program that primarily attracts low-income students would suffer from a high default rate.

The report recommends that the General Assembly codify into state law SAL’s intent and define the program’s goals and priorities. It also suggested the Georgia Student Finance Commission consider easing some of the program’s overly burdensome repayment terms.

This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.

4 COMMENTS

  1. Georgia should take the SAL funds and invest in elementary, middle, and high charter schools that will provide the basic education, discipline, and study skills that students need to be successful in higher education. It will not happen since our education system has morphed into a non-profit business that exists only to pay the salaries of the administrators and instructors. Colleges and universities will gladly accept as many poorly prepared high school graduates as possible to keep the classrooms full. They will also gladly grant you a degree for which there is no demand in the current job market.

  2. “The audit concludes it’s no surprise a program that primarily attracts low-income students would suffer from a high default rate.” While the term “low-income” may be tangentially accurate, the term “low-performing” is a far more salient and germane descriptor.

  3. “SAL receives $26 million in Georgia Lottery proceeds each year to help borrowers with postsecondary costs.” So, our Georgia Lottery funds are no longer an exclusive, qualifying scholarship based fully on academic merit! I was not aware of this prior to reading this news article. So sad! The under-privileged in our state should have secondary education funds available (as loans), but the Georgia Lottery is not the ticket to ride unless it is earned.

Recent posts

Recent comments

Pierce Blitch III on Augusta barber tradition continues
Tedd Antonacci on Bon Air receives failing grade
Catherine McKnight on Bon Air receives failing grade
Carolyn Vickers on Pay going up for city employees
Clarence Powell on Pay going up for city employees
Thomas Yarbrough on Pay going up for city employees
Leza Witherington on Pay going up for city employees
J. Paul Griffin on Pay going up for city employees
Catherine McKnight on Sias found guilty of federal crimes
Dianne Lackey on Dine and Dish: Calvert’s
Jimmy Clark on Faith: Swift retribution
Penny Danner on Faith: Swift retribution
Kevin de l’Aigle on Arrest made in transgender slaying
Barry Paschal on Dine and Dish: Calvert’s
THOMAS SUMNER on Dine and Dish: Calvert’s
Christine Slendak on Gold Cross increase request fails
Thomas Yarbrough on Murder suspect arrested
Thomas Yarbrough on Columbia County inmate dies
Thomas Yarbrough on Operation Grace leads to arrests
Thomas Yarbrough on Operation Grace leads to arrests
Phillip Williams on Operation Grace leads to arrests
Tedd Antonacci on Opinion: Letter to the editor
NancyBlumenthal on “Augusta” By David Sirull
Kelly Wagner on Another homicide in Augusta
Juliann McCraney on Column: Faith: Ups and downs
Robert Schloesser on Saga with Gold Cross EMS continues
Thomas Yarbrough on Garnett Johnson: In his own words
Tedd Antonacci on OPINION: Letter to the editor
Charmain Brackett on Reoccurring Members
Charmain Brackett on Short Getaways: Edisto Beach
Russell Smeak on Short Getaways: Edisto Beach
Trudy Edwards on Short Getaways: Edisto Beach
Gay Wright on Reoccurring Members
Russell Smeak on Short Getaways: Edisto Beach
Charmain Brackett on Short Getaways: Edisto Beach
Charmain Brackett on Short Getaways: Edisto Beach
Russell Smeak on Short Getaways: Edisto Beach
Thomas Plowden on Short Getaways: Edisto Beach
Charmain Brackett on Man struck by train Thursday
Thomas Yarbrough on Man struck by train Thursday
Tedd Antonacci on Man struck by train Thursday
Dennis Perry on FAITH: Our Only Hope
Nona Zimmerman on Amy Grant at the Miller May 25
Sandy Steed on