Dropouts and turnover: The synthesis and test of a causal model of student attrition. Sage Publications.Īmerican Bankers Association (1994). Linear probability, logit and probit models (3rd edition). In both populations (all borrowers and nonproprietary), we find virtually no evidence of a direct link between default behavior and type of institution or highest degree offered.Īldrich, J. Majoring in a scientific or technological discipline, earning good grades, persisting to degree completion, getting and staying married, and not having dependent children are all actions that substantially increase the likelihood of repayment and lower the likelihood of default. Loan repayment and default behavior can be substantially predicted by the precollege, college, and postcollege characteristics of individual borrowers. Our findings erode the basis for current national policies and proposed SPRE legislation that hold institutions accountable for the loan defaults of former students. To conduct the study, three national databases were merged: the NPSAS study of individual recipients of federal financial aid, IPEDS data containing campus financial and enrollment characteristics, and a third containing College Board Survey data. Our model development and variable selection is guided by theories of human capital and public subsidy, ability to pay perspectives, organizational structural/functional approaches, and student-institution fit models. This research addresses the question of whether student loan repayment and default behaviors are more highly related to the characteristics of the college attended or to the characteristics of the individual student aid recipient.
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