Jefferson City — Student loan personnel of the Missouri Department of Higher Education (MDHE) say the increase in default rates announced yesterday could be effectively addressed by teaching students how to better manage their money.

The student loan default rate in Missouri this year rose from 4.3 percent to 6 percent. More than 4,600 borrowers are in default, but 71,308 are repaying their loans on time, notes Marilyn Landrum, student assistance associate who presents programs to hundreds of high school and college students, counselors and financial aid officers each year.

"There are lots of reasons why students go into default, but one of the most prevalent is that they didn't finish their academic program," Landrum says. "As a result, they may be making minimum wage or not working at all. Their priorities are going to be house payments and putting food on the table, but they still have student debt."

In addition to school programs, MDHE provides tools for student borrowers that help them understand their loan obligations, organize their finances and make good decisions about money.

"The best advice we give students is not to borrow more money than they need," Landrum says. "We occasionally find that students borrow the maximum amount available and then use the excess to pay for expenses unrelated to college."

Credit cards make it easy for students to overspend, says Landrum, and many parents neglect to talk about money management with their children. To address the financial literacy challenge, several programs and groups in addition to MDHE offer tools geared to students and their families: and provide games, tutorials and practical advice on financial success.

There are also many resources available for borrowers who are having difficulty repaying student loans. They may change payment plans or obtain deferments or forbearances to adjust to new circumstances, such as being on active military duty, suffering economic hardship or going to graduate school. The following Websites describe a variety of borrowers' options:

Repayment plans -
Deferments -

Landrum says that most borrowers who go into default are embarrassed about their situation. "They're thankful for the help they receive to get back on track financially."