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The Characteristics Associated with Student - page 22 / 94

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22 / 94

9,478

98.2

172

1.8

9,650

2,698

86.3

428

13.7

3,126

12,176

95.3

600

4.7

12,776

true causal factor behind lower default rates, then the financial aid administrator has a chance at directly influencing the repayment behavior of borrowers who do not graduate. Otherwise, administrators may have a difficult time changing default rates, since they could be faced with having to increase graduation rates or imbuing students with better characters.

Graduation Indicator

Yes No All Undergraduates

Total

% of

% of

row

N

row

N

No

Default

Yes

Number of Hours Failed

6,784

98.6

94

1.4

6,878

1,893

96.1

77

3.9

1,970

1,215

93.5

84

6.5

1,299

795

91.0

79

9.0

874

1,489

84.8

266

15.2

1,755

12,176

95.3

600

4.7

12,776

In general, the more hours that borrowers fail, the more likely they are to default later. Borrowers who have zero hours of failed courses have a 1.4 percent default rate; whereas borrowers who have 10 or more failed hours have a 15.2 percent default rate. Interestingly, borrowers who fail between 1 and 3 hours default at a lower than average rate of 3.9 percent. This relationship is relatively strong and statistically significant.

The relationship between Number of Hours Failed and default, like GPA and default, reinforces the idea that quality of education attainment might be as influential as whether or not borrowers complete their degree programs. Furthermore, “hours failed” and GPA are somewhat correlated.

Number of Hours Failed

0 1-3 4-6 7-9 10 or more All Undergraduates

Total

% of

% of

row

N

row

N

No

Default

Yes

Number of Hours Passed

Borrowers who pass more than 100 hours of coursework have a very low default rate (2.8 percent). However, like many other variables in this study, the relationship in the table below partially, if not largely, reflects the association between graduation (or degree attainment) and default. This relationship is statistically significant and moderate in strength.

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