Student-Loan Debt, Delinquency, and Default: A New England Perspective 
A new Research Report by the New England Public Policy Center
A more complete picture of the problem and who is struggling
Growing student-loan debt is of concern to many. But rising student-loan debt is not necessarily an issue if borrowers are obtaining postsecondary degrees and certificates that yield higher earnings that support repayment. This report considers student-loan debt along with default and delinquency rates in the nation and region to provide a more complete picture of the problem and who is struggling with student-loan debt.
Default and delinquency rates are lower in New England than the nation
Perhaps because of its high quality educational institutions and relatively strong labor markets, default and delinquency rates are lower in New England than the nation. Student loan borrowers attending higher education institutions in New England generally have lower rates of default on their loans than borrowers going to school elsewhere. Residents of New England also have persistently lower rates of delinquency on student loans.
Data Story: Student-Loan Debt, Delinquency, and Default: A New England Perspective
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Note: Borrowers in deferment and forbearance are excluded from the pool of borrowers in the excluding deferred delinquency rate calculation. Severe delinquency is defined as being over 120 days late on any student loan payment.
Those borrowing the least face the most significant challenges
While many stories in the media focus on large student loan balances, analysis reveals that those borrowing the least face the most significant challenges. A majority of the region’s borrowers have balances below $25,000, and the highest rates of delinquency among borrowers are among those with the lowest debt balances. Low rates of completion may contribute to delinquency rates for those borrowing the least.
Note: All measures exclude borrowers in deferment. The Boston Metro area is the Boston-Cambridge-Newton, MA-NH metropolitan statistical area. This comprises the Norfolk, Plymouth, Suffolk, Essex, and Middlesex Counties in Massachusetts and Rockingham and Strafford Counties in New Hampshire.
Borrowers at non-traditional institutions and community colleges default at high rates.
In the region and nation borrowers at non-traditional institutions and community colleges default at high rates and account for a majority of defaulting borrowers. Students at for-profit institutions make up a disproportionate share of defaulting borrowers, accounting for 45 percent of defaults nationally and nearly 40 percent of defaults in New England. Borrowers studying at community colleges, although the smallest share of borrowers, make up the second largest portion of defaulters, accounting for nearly a quarter of defaults nationally and regionally.
Note: The default rate is the share of borrowers who entered repayment between October 1, 2011 and September 30, 2012 and defaulted on their loans by September 30, 2014. Default is defined here as 360 days of delinquency.
Borrowers from disadvantaged backgrounds are most challenged by debt
Student-loan debt presents a significant challenge for borrowers from disadvantaged backgrounds. Looking at student-loan debt by the characteristics of the neighborhoods where borrowers came from, we find that those from low-income localities, neighborhoods with a higher share of minority residents, and areas with low levels of educational attainment have lower levels of debt but higher rates of delinquency. Indeed, more than one in four students from a disadvantaged background or from a population underrepresented in higher education become severely delinquent on student loans.
Policy Recommendations
Educating student borrowers and strengthening the state’s consumer protection role are policies that could support student borrowers.