More aren’t paying back student loans

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Updated: August 4, 2011 4:20PM

The number of people who aren’t paying back their student loans is on the rise, and the government is increasingly threatening to sue them for the money.

The amount of loan defaults that the Education Department has referred to Justice Department lawyers for possible legal action nearly doubled from 2009 to last year: There were 2,596 in 2009, and then 5,393 last year, Education Department figures show.

If the government does sue, it can go after wages, bank accounts, put liens on people’s property and hold parents responsible for their children’s debt if they co-signed the education loans.

The most recent figures show that of about 3.37 million student loan borrowers, 238,852 were in default from the 2006 federal fiscal year through the 2008 fiscal year. The default rate for 2008 was about 7 percent compared with 5.2 percent in 2006.

Gannett News Service