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The Characteristics Associated with Student - page 21 / 94

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1,230

98.7

16

1.3

1,246

8,626

98.1

166

1.9

8,792

2,320

84.7

418

15.3

2,738

12,176

95.3

600

4.7

12,776

Highest Degree Attained

Post-baccalaureate Baccalaureate No Degree All Undergraduates

Number of Degrees

Total

% of

% of

row

N

row

N

No

Default

Yes

The number of degrees that a borrower attains is strongly and significantly related to the borrower’s likelihood of default. However, as in the case of Highest Undergraduate Degree Attained, Number of Degrees is highly correlated with whether or not borrowers graduate. In fact, there is no statistically significant difference in default rates between borrowers with one degree and borrowers with two degrees. The statistical significance of the table can be attributed almost entirely to the difference in default rates between those who do not receive any degree (15.0 percent) and those who get at least one degree (between 1.1 percent and 1.8 percent).

Like Highest Undergraduate Degree Attained, the relationship here reduces approximately to the relationship between graduation and default.

2,376

85.0

418

15.0

2,794

9,531

98.2

179

1.8

9,710

269

98.9

3

1.1

272

12,176

95.3

600

4.7

12,776

Number of Degrees

0 1 2 All Undergraduates

Graduation Indicator

Total

% of

% of

row

N

row

N

No

Default

Yes

There is a strong and statistically significant between graduation status and default. Borrowers who do not graduate have a nearly 14 percent default rate, while borrowers who do graduate have less than a 2 percent rate. While this finding ratifies conventional wisdom among those who discuss student loan defaults, it fails to resolve the issue of cause and effect. Do borrowers repay their loans because they graduate or do they both graduate and repay their loans because of some third factor (or set of factors)? Perhaps some borrowers have qualities of character -- like commitment, diligence and self-discipline-- that promote success in many aspects of life, including student loan repayment. Or perhaps borrowers who graduate are much more likely to receive exit counseling? If exit counseling, or some other policy instrument, is the

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