Using Repayment Rates to Make Sense of Student Loan Outcomes

With concerns growing about student debt, policymakers, institutions and students and families are looking for better information on college affordability and student borrowing. For them, student loan repayment rates – alongside default rates – are a more nuanced way to understand all possible loan repayment outcomes.

But how can repayment rates be used most effectively? How well do they illustrate the progress borrowers are making paying down their loans?

The Institute for Higher Education Policy (IHEP) convened institutions and policy experts to investigate if and how repayment rates should be incorporated into our postsecondary systems to help advance student success.

The results of that information-gathering are now being released in a report, Making Sense of Student Loan Outcomes: How Using Repayment Rates Can Improve Student Success.

The report highlights 11 major findings from the convening, divided into four areas:

• General principles for repayment rate usage
• Calculation specifications
• Considerations for setting high and attainable performance standards, and;
• Recommendations for the Department of Education

IHEP has been paying close attention to and evaluating repayment rates for some time.  With the release of Making Sense of Student Loan Outcomes, IHEP intends to spark conversation on the high-level uses and vision for repayment rates, and recommend how the rates should be used – and by whom.

For more information about Making Sense of Student Loan Outcomes, contact IHEP Director of Policy Research Mamie Voight, mvoight@ihep.org, (202) 587-4967.