Cal Poly boasts the lowest student loan default rate of the 23 California State University (CSU) campuses, according to the most recent data, and the Director of Financial Aid and Scholarships Lois Kelly thinks she knows why.
“Our students understand the responsibilities they have taken on, and are responsible in paying back their student loans,” Kelly said.
At Cal Poly the student loan default rate is 1.2 percent — the national average is 7 percent. The next closest CSU is California Maritime Academy with 1.5 percent, and the CSU with highest default rate is Cal State University, Stanislaus with 5.2 percent.
Student loan default rates are determined by dividing the amount of students who default, or don’t pay a portion of their loan back, by the total number of students repaying loans.
There are multiple factors that influence default rates, and they all depend on the student.
Noelia Gonzalez, director of Financial Aid at CSU Stanislaus, said a student’s family background as well as demographic and socioeconomic factors are important when comparing her university’s default rate to Cal Poly’s.
Gonzalez said she felt her students came from lower income areas, in comparison to Cal Poly students, who generally have stronger family support systems.
“You have to look at where (students) come from and their backgrounds,” Gonzalez said. “A lot of our students are supporting their families. More of our student use loans because their families are not helping them out.”
Program Coordinator of Career Services at Cal Poly, Carole Moore, said she agreed Cal Poly students tend to come from more financially stable families, which helps with their ability to handle repaying loans. She also said this, paired with post-college career possibilities, is a main factor in the low student loan default rate.
“If students have families that will support them and (have) an opportunity to seek higher paying jobs, it will be easier to pay the loans back,” Moore said.
The ability for Cal Poly students to use their hands-on education when entering career industries is something Cal Poly prides itself upon, Moore said.
“Cal Poly pushes internships, lab experiences, co-op’s and field work,” Moore said. “All of those opportunities provide industry exposure, networking and what it is to an industry professional before graduating. That makes our students financially responsible and able to pay back loans.”
And employment proves to be a main reason why schools like Cal Maritime have default rates close to Cal Poly’s and far below the national average. Not only do Cal Poly and Cal Maritime have the two lowest student loan default rates, but they also have two of the highest graduation employment rates.
Cal Poly has a graduation employment rate of 67 percent, and Cal Maritime’s “official number is 97 percent,” said James Dalske, director of career development at Cal Maritime.
Both universities have students working toward specialized careers, which results in jobs out of college. This then allows students to start paying back loans right away, Director of Financial Aid at Cal Maritime, Ken Welsh, said.
“(The low default rate is) mainly since we have great career services here, and the fact that (maritime) is a limited industry,” Welsh said. “The students are going toward their goal, and when they get out of here they get the jobs they want.”
The student loan default rate ultimately depends on the student and their motivation to use the loan wisely and pay it back in a timely manner. This is something liberal studies junior Marie Aromin, who has student loans, said she agrees with.
“It’s both the student and the job market,” Aromin said. “To even get into Cal Poly you have to be motivated. As soon as I graduate, I want to get a job and pay my loan back as soon as I can.”
Aromin just proves the reason Cal Poly is able to boast such a low default rate is dependent upon the nature of the student, a fact Kelly pin-pointed from the get-go.
“Cal Poly students make (paying loans back) an obligation,” Kelly said. “Our students are employable and have jobs and understand responsibilities.”