The student loan default rate at New Mexico State University is more than 2.5 percent higher than the national average, but the university said it's not at risk of losing its financial aid or having to implement a penalty.

NMSU has a 9.9 percent student loan default rate from 2009, and Vice President of Student Affairs and Enrollment Bernadette Montoya admitted the number is too high.

"This is a warning sign, perhaps," Montoya said.

If a university reaches 15 percent, it could be in danger of losing its federal funding, and even more alarming to incoming freshmen, it could mean forcing new students to wait 30 days into the semester before receiving their federal loans.

Montoya said that possibility isn't even on their radar.

"We don't meet the criteria that would require us to do that," Montoya said. "We're far from it."

Students said if such a penalty were to take place, it could be the difference between an incoming freshman choosing one school over another.

"It would be pretty impossible to start college without the loans," NMSU senior Lauren Snyder said. "You need the money to enroll and get your books and your down payment and everything."

NMSU does require students to take financial aid counseling to learn about their loan options.

The school also started reaching out to students who have defaulted on their loans one by one to find out what went wrong.

Montoya said the school's jump in loan defaults has a lot to do with the fact that many of its students are from Dona Ana County, which is among the poorest counties in the state.

"Are they going to pay their student loan payment, or are they going to put food on their table?" Montoya said. "It's a very easy answer."

Most of the NMSU students defaulting on their loans aren't actually graduates, but students who withdrew from the school.