Despite a UW System average undergraduate debt of $18,378 in 2005, UW-Madison students are paying off loans rapidly after graduation compared to their national peers, according to a University Communications statement released Wednesday.
Director of Student Financial Services Susan Fischer said on a national basis, UW-Madison student debt, reported at approximately $18,000 to $20,000, is around the national average.
She noted UW-Madison undergraduate student debt rates are some of the lowest in the Big Ten.
Fischer attributed the high repayment rate specifically to responsible students, informative financial aid staff and loan consolidation.
Fischer said a major part of this high payoff rate is that students take the process seriously and understand the obligations their loans entail. She said she hoped these graduates have high-paying jobs as well, to assist in the repayment process.
In 2003-'04, the UW-Madison Federal Stafford loan default rate was 0.3 percent, compared with the national average default of 5.1 percent.
According to Fischer, less than one percent of students are not repaying, which is a ""very stellar number.""
Likewise, the default rate for the Federal Perkins loan at UW-Madison was 1.3 percent in 2005-'06, compared with the national rate of 8.12 percent in 2004-'05, the statement said. National figures for loan defaults for 2005-'06 will be released in Spring 2006.
""The staff in my office as well as the Bursar's office do a really good job with letting people know their rights and responsibilities and making sure that there is information in the hands of the borrowers,"" Fischer said.
Especially important to UW-Madison is student repayment of the Perkins loan, which recycles repaid money to other students who need financial aid.
Unlike the Stafford loan, which borrows from and repays money to the government through national banks and is distributed to students at campuses throughout the country, the Perkins loan is a determined amount of money reserved specifically for UW-Madison students. Therefore, if UW-Madison students do not repay their loans readily, the money available to other students decreases.
""The same dollar has been recycled at least three times on this campus since 1965, with no additional expense to the federal government,"" Fischer said.
According to Fischer, UW-Madison has one of the largest Perkins loan portfolios in the nation.
""This campus hasn't gotten any new money in years,"" Fisher said. ""The federal program, depending on the administration, has actually been trying to get rid of the program.""
""About every two years, someone in Congress decides that we should not only cancel it out completely, but that the money that you repay should go back to Congress to reduce the deficit,"" she added.
