Almost one of every five Atlantic Cape Community College students who began paying back federal student loans in 2011-12 has defaulted on those loans, according to U.S. Department of Education data.

The 19 percent two-year default rate at Atlantic Cape is an increase from 15 percent for the previous year's cohort, and is the second-highest default rate among community colleges in the state, after Mercer County Community College at 20 percent. The default rate for students who began paying back their Atlantic Cape loans three years ago was even higher at 24 percent, the data compiled by the Institute for College Access and Success shows.

Patricia Gentile, dean of Advancement and Enrollment Management at Atlantic Cape, said the default rate reflects the still struggling economy of South Jersey.

"There is still higher unemployment and lower wages compared to the rest of the state," Gentile said. "Over time that can escalate into default."

Nationally, the U.S. Department of Education reported Monday that the student loan default rate continued to climb for the sixth year in a row, reaching 10 percent for the FY2011 two-year cohort and 14.7 percent for the three-year cohort. According to national data, the highest two-year default rate was 22 percent in 1990. The lowest was 4.5 percent in 2003.

For-profit institutions nationally have the highest default rate, at 14 percent for the two-year cohort and 22 percent for the three-year cohort.

The national default rate for public colleges was almost 10 percent after two years and 13 percent after three years. Private nonprofit colleges had the lowest default rates, at 5 percent for the two-year rate and 8 percent for the three-year rate.

Locally, Richard Stockton College in Galloway Township and Rowan University in Glassboro each had two-year loan default rates of 4 percent. Stockton's three-year default rate was 7 percent and Rowan's was 5 percent.

Cumberland County College had a two-year loan default rate of 13 percent and a three-year rate of 23 percent. Ocean County College's two-year default rate was 10 percent and its three-year rate was 18 percent.

Gentile said they work with students at Atlantic Cape to set realistic borrowing goals and will refuse to approve a loan for a student who is not making enough academic progress or is already over-extended.

"There have been some very difficult conversations and some complaints," she said.

She said Atlantic Cape requires students to apply for loans separately, not as part of a prepackaged plan that includes grants.

"We counsel them on borrowing limits, especially if they have lost their Pell grant eligibility due to insufficient progress," she said.

Jeanne Lewis, director of financial aid at Stockton, said they also do pre-loan and post-loan counseling with students to make sure they understand the process and how much it will cost them to pay back the loan.

She said the college has increased the amount of scholarships offered to students, and the 20-credit flat rate tuition guarantees students can graduate in four years or even less if they take the maximum credits every year.

"We'll counsel them on how to avoid extra costs, and why it is important that they graduate on time," she said.

Stockton's 2013-14 budget includes about $11 million for scholarships, which are typically based on merit rather than just need, but still help reduce potential debt.

Lewis said families are more interested and aware of the potential pitfalls of too many loans.

"Families are having discussions," she said. "They are evaluating the costs and looking for value."

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