Title: Who defaults on student loans? Findings from the National Postsecondary Student Aid Study
Abstract: Data from the National Postsecondary Student Aid Study are used in this study to analyze the characteristics of student loan recipients and to compare student loan defaulters and nondefaulters along a variety of dimensions, including their demographic profiles, their socioeconomic characteristics, and their educational attainment. Three key results emerged from the descriptive analysis and were supported in the regression analysis. First, borrowers from low-income households and minority groups, high school dropouts, and borrowers who attend proprietary schools and two-year colleges were more likely to default on their loan payments. Secondly, after adjusting for numerous background factors, earnings after leaving school remained a powerful determinant of default. Thirdly, borrowers who did not complete high school and borrowers who did not complete their postsecondary program were significantly more likely to default. Efforts to reduce default rates are thus likely to be felt most significantly by students from disadvantaged backgrounds, a key target group for student aid.
Publication Year: 1994
Publication Date: 1994-03-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 113
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