Institutional Accountability: A Comparison of the Predictors of Student Loan Repayment and Default Rates

2017 ◽  
Vol 671 (1) ◽  
pp. 202-223 ◽  
Author(s):  
Robert Kelchen ◽  
Amy Y. Li
Keyword(s):  
Minority Group ◽  
State Level ◽  
Student Loan ◽  
Underrepresented Minority ◽  
Loan Default ◽  
Loan Repayment ◽  
First Generation College Student ◽  
For Profit ◽  
Default Rates ◽  
First Generation College

The federal government holds colleges accountable if too many of their students default on loan repayment, but the default measure traditionally used captures only a fraction of students who are struggling to repay their loans. The 2015 College Scorecard dataset introduced a new loan repayment metric, showing that the percentage of students who have not reduced the principal balance of their loans by at least $1 over a given period of time far outstrips the traditional loan default measure. Using a sample of 3,595 colleges, we test the extent to which student demographics, institutional characteristics, and state-level economic factors are associated with repayment rates and default rates. We also examine whether factors associated with loan repayment rates change between one and seven years after students begin repayment. We find that characteristics traditionally associated with economic disadvantage, including being a first-generation college student or a member of an underrepresented minority group, tend to be associated with lower loan repayment rates, as does attendance at for-profit colleges. These factors are just as or more strongly associated with longer-term repayment rates compared to shorter-term repayment rates.

Messengers of Bad News or Bad Apples? Student Debt and College Accountability

2015 ◽  
Vol 10 (2) ◽  
pp. 277-299 ◽  
Author(s):  
Rajeev Darolia
Keyword(s):  
Low Income ◽  
Student Loan ◽  
Access To Higher Education ◽  
Capital Investments ◽  
Loan Default ◽  
Public And Private ◽  
Loan Repayment ◽  
For Profit ◽  
Student Loan Default ◽  
Public Money

Student loan debt and defaults have been steadily rising, igniting public worry about the associated public and private risks. This has led to controversial regulatory attempts to curb defaults by holding colleges, particularly those in the for-profit sector, increasingly accountable for the student loan repayment behavior of their students. Such efforts endeavor to protect taxpayers against the misuse of public money used to encourage college enrollment and to safeguard students against potentially risky human capital investments. Recent policy proposals penalize colleges for students’ poor repayment performance, raising questions about institutions’ power to influence this behavior. Many of the schools at risk of not meeting student loan default measures also disproportionately enroll low-income, nontraditional, and financially independent students. Policy makers therefore face the challenge of promoting the efficient use of public funds and protecting students while also encouraging access to higher education.

scholarly journals Where Do Students Go When For-Profit Colleges Lose Federal Aid?

2020 ◽  
Vol 12 (2) ◽  
pp. 46-83
Author(s):  
Stephanie R. Cellini ◽  
Rajeev Darolia ◽  
Lesley J. Turner
Keyword(s):  
Local Community ◽  
Student Loans ◽  
Student Loan ◽  
Federal Aid ◽  
Level Variation ◽  
Loan Default ◽  
For Profit ◽  
Default Rates ◽  
Student Loan Default ◽  
Percent Decrease

We examine the effects of federal sanctions imposed on for-profit institutions in the 1990s. Using county-level variation in the timing and magnitude of sanctions linked to student loan default rates, we estimate that sanctioned for-profits experience a 68 percent decrease in annual enrollment following sanction receipt. Enrollment losses due to for-profit sanctions are 60–70 percent offset by increased enrollment within local community colleges, where students are less likely to default on federal student loans. Conversely, for-profit sanctions decrease enrollment in local unsanctioned for-profit competitors, likely due to improved information about local options and reputational spillovers. Overall, market enrollment declines by 2 percent. (JEL H52, I21, I22, I23, I28)

Connecting Student Loans to Labor Market Outcomes: Policy Lessons from Chile

2015 ◽  
Vol 105 (5) ◽  
pp. 508-513 ◽  
Author(s):  
Harald Beyer ◽  
Justine Hastings ◽  
Christopher Neilson ◽  
Seth Zimmerman
Keyword(s):  
Student Loans ◽  
Labor Market Outcomes ◽  
Student Loan ◽  
Degree Programs ◽  
Market Outcomes ◽  
Loan Default ◽  
Loan Repayment ◽  
Financial Outcomes ◽  
Default Rates ◽  
Student Loan Default

Rising student loan default rates and protests over debt suggest that many students make college enrollment and financing choices they regret. Policymakers have considered tying the availability of federally subsidized loans at degree programs to financial outcomes for past students. This paper considers the implementation of such a policy in Chile. We describe how loan repayment varied by degree type at baseline, the design of the loan reform, and how earnings-based loan caps change availability of loans and incentives for students and higher education institutions. We discuss the challenges facing policymakers seeking to link loan availability to earnings outcomes.

Social Capital’s Impact on College Graduation Rates, Debt, and Student Loan Defaults

2020 ◽  
pp. 152102512091887
Author(s):  
Steve Joanis ◽  
James Burnley ◽  
J. D. Mohundro
Keyword(s):  
Social Capital ◽  
Graduation Rates ◽  
Student Loan ◽  
Theory And Practice ◽  
College Graduation ◽  
Student Debt ◽  
Loan Default ◽  
College Graduation Rates ◽  
Default Rates ◽  
Debt Levels

This study extends the literature on education economics and student retention by examining social capital as a predictor of college graduation rates, student debt levels, and student loan default rates. Coleman’s social capital theory is employed to understand how social influences can impact students through external social support (i.e., social capital). The study uses school-level data from the U.S. Department of Education’s Integrated Postsecondary Education Data System and two social capital measures. Results suggest that social capital, at both the state and the community level, significantly influences graduation rates, student debt levels, and loan default rates. Implications for theory and practice are discussed.

Regulatory Enforcement as Policy: Exploring Factors Related to State Lawsuits Against For-Profit Colleges

2017 ◽  
Vol 61 (14) ◽  
pp. 1799-1823
Author(s):  
James Dean Ward ◽  
William G. Tierney
Keyword(s):  
Event History Analysis ◽  
State Level ◽  
Policy Decision ◽  
State Governments ◽  
Regulatory Enforcement ◽  
Loan Repayment ◽  
State Regulations ◽  
For Profit ◽  
Market State ◽  
Market Factors

Regulatory enforcement is a policy decision in itself. Given the current federal commitment to deregulate the for-profit college market, state regulations will likely become increasingly important. This study examines the factors contributing to the enforcement of state-level proprietary college regulations. Using event history analysis, the authors test diffusion and innovation theories as potential explanations for patterns of enforcement. The findings suggest that geographic diffusion plays an important role in state lawsuits against for-profit colleges, although the specific mechanisms of diffusion may differ across regions. Moreover, loan repayment rates of for-profit students appear to contribute to the likelihood of a lawsuit being filed as states may seek to intervene when objective metrics suggest that students and state economic interests seem to be harmed. The article also suggests that market factors may play an influential role in state governments enforcing regulations on for-profit colleges.

Financialization and the Tyranny of Bootstraps

2020 ◽  
pp. 37-59
Author(s):  
Terri Friedline
Keyword(s):  
Higher Education ◽  
Student Loans ◽  
Student Loan ◽  
Student Loan Debt ◽  
For Profit ◽  
Default Rates ◽  
Loan Debt ◽  
Recent Trends ◽  
The Individual ◽  
Key Terms

This chapter explores recent trends in student loan debt, particularly the for-profit educational corporation Corinthian Colleges’ scandal, in order to define the key terms financialization and neoliberalism. Finance is playing an expanded role in higher education and securitization is being employed to capitalize off of students’ loan debt. Students are increasingly taking on debt and bearing responsibility for a capitalist economy that is stacked against them. Banks and lenders bundle and sell this debt to wealthy, white investors as securities. Given that Black and Brown borrowers take out more student loans, repay their debts plus interest over longer periods of time, and experience higher default rates compared to their white counterparts, these securities are racialized just like the individual lines of debt from which they were created.

Who is My Professor?

2019 ◽  
Vol 4 (1) ◽  
pp. 36-54
Author(s):  
Danielle Zaragoza ◽  
Z W Taylor ◽  
Jimmy Huynh ◽  
Kevin Lema
Keyword(s):  
Race And Ethnicity ◽  
First Generation ◽  
Graduate Programs ◽  
Faculty Members ◽  
Online Faculty ◽  
Prospective Students ◽  
First Generation College Student ◽  
Research And Practice ◽  
For Profit ◽  
First Generation College

As technology has advanced, faculty members have many ways to connect with current and prospective students. Yet, no extant research has examined online faculty profiles on institutional (.edu) websites. To inform graduate student choice literature, we examined a random sample of 1,500 online faculty profiles across 500 U.S. graduate programs. Findings suggest assistant and associate professors publish the most informative online profiles, whereas private for-profit professors and lecturers publish the least informative profiles. In addition, zero faculty members self-identified their pronouns, race and ethnicity, or their first-generation college student status in their biographical statement. Implications for research and practice in U.S. and international contexts are addressed.

scholarly journals Not All Disadvantages Are Equal: Racial/Ethnic Minority Students Have Largest Disadvantage Among Demographic Groups in Both STEM and Non-STEM GPA

AERA Open ◽  
2021 ◽  
Vol 7 ◽  
pp. 233285842110598
Author(s):  
Kyle M. Whitcomb ◽  
Sonja Cwik ◽  
Chandralekha Singh
Keyword(s):  
Low Income ◽  
Research University ◽  
First Generation ◽  
Underrepresented Minority ◽  
First Generation College Student ◽  
Demographic Groups ◽  
Institutional Data ◽  
Income Status ◽  
First Generation College ◽  
Historically Disadvantaged

An analysis of institutional data to understand the outcome of obstacles faced by students from historically disadvantaged backgrounds is important in order to work toward promoting equity and inclusion. We use 10 years of institutional data at a large public research university to investigate the grades earned by students categorized on four demographic characteristics: gender, race/ethnicity, low-income status, and first-generation college student status. We find that on average across all years of study, underrepresented minority (URM) students experience a larger penalty to their mean overall and STEM GPA than even the most disadvantaged non-URM students. Moreover, the URM students with additional disadvantages due to socioeconomic status or first-generation college status were further penalized in their average GPA. These inequitable outcomes point to systemic inequities in higher education for students with historically disadvantaged backgrounds and the need to dismantle institutional inertia to support them.

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