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The Characteristics Associated with Student - page 20 / 94

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Number of Hours Incomplete

Significant

0.01

0.07

0.62

Highest Level Attained

Significant

0.01

0.05

N/A

Degree

Significant

0.01

0.04

N/A

Indicator of Minor

Significant

0.00

0.04

0.23

Indicator of Secondary Major

Significant

0.00

0.02

1.00

Minor

Not significant

N/A

N/A

N/A

Undergraduate Grade Point Average (GPA)

Borrowers with higher grade point averages have lower student loan default rates. It appears that the success of borrowers in their coursework, as measured by GPA, is as important to loan repayment as degree attainment and graduation. Borrowers with college GPAs of 2.0 or less default at nearly an 18 percent rate. In contrast, borrowers whose GPAs exceed 2.5 have default rates of 2 percent or less. In fact, borrowers with GPAs that exceed 3.0 hardly default at all (less than 1 percent of the time).

87

82.1

19

17.9

106

206

77.7

59

22.3

265

1,189

83.3

239

16.7

1,428

2,893

94.2

178

5.8

3,071

3,933

98.0

79

2.0

4,012

3,868

99.3

26

0.7

3,894

12,176

95.3

600

4.7

12,776

The following table shows that degree attainment is related to whether or not borrowers default. Borrowers with no degree have a default rate of 15.3 percent, whereas borrowers who have a degree have a rate between 1.3 percent and 1.9 percent. The difference in default rates between borrowers who earn baccalaureate degrees and those who attain post- baccalaureate degrees is not statistically significant. The statistically significant relationship exists between those who do not get a degree and those who do. Since students obtain undergraduate degrees when they graduate from college, the relationship in the table below should reduce exactly to the relationship depicted by the graduation variable several subsections later. That this is not the case results from situations in which some borrowers have degrees listed but do not have graduation dates in the study data base.

Highest Degree Attained

Borrowers who have less than a 2.5 GPA account for 82.5 percent of all defaulters.

As measured by the Uncertainty Coefficient, this variable has the strongest association to default of any variable in the study.

Undergraduate GPA

0.00

    • 0.01

      -1.00

    • 1.01

      -2.00

    • 2.01

      -2.50

    • 2.50

      -3.00

    • 3.01

      -4.00

All Undergraduates

Total

% of

% of

row

N

row

N

No

Default

Yes

17

0.07 N/A N/A 0.04 0.02 N/A

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