At 10.9 percent, Arizona has a higher rate offederal-student-loan defaults than any other state in the nation,the government said Monday.

The U.S. Education Department released data that show how manyborrowers defaulted within two years after their first repaymentscame due between Oct. 1, 2007, and Sept. 30, 2008.

In that time, 24,531 borrowers defaulted. They attended 90colleges in Arizona.

The national default rate for the same time period is 7 percent,Education Secretary Arne Duncan announced on Monday.

"This data confirms what we already know: that many students arestruggling to pay back their student loans during very difficulteconomic times," he said in a news release. "That's why theadministration has expanded programs like income-based repaymentand Pell Grants to help students in financial need."

For-profit colleges have lots of defaults

Students attending for-profit schools are the most likely todefault, Duncan said.

Arizona's default rate could be so high because the Universityof Phoenix is based here, Education Department spokeswoman JaneGlickman said. Of all the borrowers in default in Arizona, 70percent went to that university, she said. Of all the repayers, 60percent went there.

Students who earn an associate's degree at a for-profit collegecarried a median federal-student-loan debt of $14,000, while themajority of students at community colleges do not borrow, Duncansaid.

In Arizona, nine of 10 of the colleges with the highest defaultrates are private schools. One is a public community college.

Arizona's public universities have some of the lowest defaultrates in the state.

University of Arizona students' default rate is 4 percent.

Tucson College plans to improve high rate

Tucson College had the highest default rate in the state, at34.6 percent.

Schools with default rates of 25 percent or greater for threeconsecutive years face loss of eligibility in the federalstudent-aid programs.

Tucson College could be at risk, because the school's rate was26.3 for 2007.

However, it has been working on a default-rate improvement planwith its accrediting agency for about a year, said campus directorJim Geymont.

The school has improved its annual default rate to 19.5 percent,he said.

Part of the plan involves training the staff to help studentsunderstand their financial-aid options and obligations, andcounseling students who might default, he said.

"We expect to continue to see positive results from ourwell-rounded approach and are working hard to ensure that this verypositive trend continues," Geymont said.

The Arizona State Board for Private Postsecondary Education alsomonitors schools that have problematic default rates.

Also at risk is Lamson College in Tempe, which had thesecond-highest default rate in Arizona. The 2008 rate is 30.4percent, and the 2007 rate is 26.6 percent.

Student-loan default rates change with the economy and withstudents' financial well-being, so high default rates shouldn't beused to judge the quality of a college, Harris Miller, president ofthe Washington, D.C.-based Career College Association, said in anews release.

What to do if you can't repay

The problem of increasing defaults on federal student loansstarted before the economy turned downward, said CatherineWilliams, vice president of financial literacy at Money ManagementInternation-al, a credit-counseling agency based in Houston. Morestudents were taking out larger loans, partly because they couldand not always because it was the best choice, she said.

Additionally, college costs more, and more students are takingfive years to get through a four-year program, Williams said.

Now, graduates are struggling to find jobs and can't repay theirloans, she said.

What to do?

"Student loans will not go away," Williams said.

They won't be excused, even in bankruptcy, she said, soborrowers must call their lenders early on and explain theirsituations to take advantage of lenders' repayment options.

Contact reporter Becky Pallack atbpallack@azstarnet.com or807-8012.