The Budget Lifetime Default Rate measures the anticipated default rate for Subsidized and Unsubsidized Stafford loans (unless otherwise noted) that entered repayment in a particular fiscal year over an estimated twenty year life of the loan. In other words, it estimates the percentage of loan volume that enters repayment in a given year and is expected to go into default over the following twenty-year period. The Budget Lifetime Default Rate is calculated and reported in the President’s budget proposal for a given fiscal year and the two preceding fiscal years, and is used as a predictor of program costs. It is not calculated for loans made at individual institutions of higher education. It is based on the dollar amount of loans that are expected to enter default, whereas the Cumulative Lifetime Default Rate (explained below) measures the number of loans that have already entered default. Budget Lifetime Default Rates are estimates and therefore subject to variation from year to year due to underlying assumptions and projections.

Budget Lifetime Default Rates

Year Loan Enters Repayment
Weighted Average15.9%16.5%17.3%17.6%
2-Year Non-Profit/Public32.1%31.6%31.1%31.4%
2-Year Proprietary47.3%48.6%49.0%48.4%
4-Year Freshmen & Sophomores24.7%24.0%23.6%24.2%
4-Year Juniors & Seniors12.4%12.3%12.1%11.9%
Graduate Students6.2%6.2%6.1%6.1%
Source: U.S. Department of Education (based on figures published in fiscal year 2013)

Budget Lifetime Default Rates: President's Budgets

Year Loan Is Issued
Subsidized Stafford18.2%16.9%21.8%24.4%21.4%19.4%
Unsubsidized Stafford (Undergraduate)*18.3%*16.5%*17.7%*20.4%20.0%19.7%
Unsubsidized Stafford (Graduate)*------5.6%5.5%5.4%
Parent PLUS*8.2%*7.9%*9.9%*7.7%7.5%7.3%
Grad PLUS*------6.0%5.9%5.9%
Includes all federal direct student loans (Subsidized and Unsubsidized Stafford, PLUS, and Consolidation Loans)

*Beginning with the President's fiscal year 2015 budget proposal, the default rates are split out for undergraduate and graduate Unsubsidized Stafford and PLUS loans for the first time. Data prior to fiscal year 2013 reflect the combined undergraduate/graduate Unsubsidized Stafford and PLUS default rates; data for fiscal years 2013-2015 are all from the 2015 budget request.

Source: White House Office of Management and Budget, Fiscal Year 2011, 2012, 2013, 2014, and 2015 Budget Requests

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