Utah students are doing such a good job paying back their loans that the state has been able to slash its default rate in half since 2005, according to a recent federal report.

In fact, Utah's default rate is the lowest in the country.

The average Utah borrower owes $13,000 in student loans, but due to a new program that lets them pay loans back in smaller payments or defer paying at all until a more reasonable time, many are chipping away at their debt, resulting in a 2.1 percent default rate for the state.

"No one likes to incur debt, but the fact that Utahns have the lowest student-loan default rate in the country tells us their loans were a worthwhile investment of time and money," Gov. Gary Herbert said. "Student-loan debt, like mortgage debt, can be an investment in a brighter future."

The most recent numbers come from the U.S. Department of Education report on default rates, released in September. Of the Utah Higher Education Assistance Authority's 170,000 borrowers, 24,118 began repayment in 2006, and of those, only 507 defaulted. Nationally, an average of 6.7 percent of student-loan borrowers have defaulted, resulting in loss of federal assistance eligibility or sanctions for the schools with the highest default rates.

BYU, which consistently has low default rates among student borrowers, boasts the state's highest rate of students actively repaying loans. Of 3,500 borrowers, only 0.4 percent default. On the other hand, more than 17 percent of the 1,047 borrowers attending Everest College, a private, for-profit institution, have defaulted, according to the report. However, Everest has a smaller number of borrowers, which affects the results.

The state's success, in a time when layoffs, budget cuts, downsizing and hiring freezes are prevalent, comes as a likely result of the Ray of Hope program, which began earlier this year to help students develop an alternative way to pay back a loan that has become obtrusive. But it is also due to Utah's relatively strong job market and a lower number of students who need to borrow money.

"The economic downturn likely had a significant impact on the borrowers captured in these rates," U.S. Secretary of Education Arne Duncan said in a statement. "The department is reaching out to make sure current and prospective borrowers are aware of the many flexible repayment options designed to assist them with their financial obligations, such as the new Income-based Repayment Plan."

The Utah Higher Education Assistance Authority's six-member default-aversion team has been locating borrowers however it can, via Facebook, MySpace, home and work addresses, e-mail and even at malls, to help them with the paperwork to get the process started.