UW students among Big Ten best at repaying Perkins Loans

The 1997-98 Perkins Loan default rate at UW–Madison was 2.61 percent, second lowest in the Big Ten, according to the university’s financial aid office.

Steve Van Ess, director of the Office of Student Financial Services, credits the low rate to diligent repayment of loans by current and former students. He also credits the billing work of the Bursar’s Office and the collection effort of his Student Loan Servicing unit for the stellar rate.

“The repayment of these funds by students is especially important as the funds go into a revolving fund to be loaned out again to current students,” Van Ess says.

Northwestern University had the Big Ten’s lowest rate, at 0.86 percent. The next closest to UW–Madison was the University of Illinois, at 4.9 percent. The Ohio State University had the highest default rate at 12.7 percent.

The Perkins Loan, previously called the National Defense Student Loan and the National Direct Student Loan, is a financial aid program administered by the U.S. Department of Education. Along with Work Study and Supplemental Educational Opportunity Grants, it is one of three campus-based federal financial aid programs.

UW–Madison loans Perkins money directly to students and collects the repayments. If students have trouble repaying or if they default, counselors with the Student Loan Servicing unit help them establish repayment plans. While the university rarely receives any new loan money from the federal government, the annual collection of $9 million from prior Perkins Loan borrowers is available for current UW–Madison students.

“Our students really do repay their loans,” Van Ess says.