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The Characteristics Associated with Student - page 51 / 94

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Marital Status of Borrower Country of Permanent Address State of Permanent Address Residency Status

Not significant Not significant Not significant Not significant

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Age of Borrower

Age of Borrower represents the borrower’s age at the time that he or she entered repayment on student loans.

Borrowers between the ages of 23 and 26 have the lowest default rate (3.2 percent), with both younger borrowers and older borrowers representing increased levels of default risk. Looking below the surface, it becomes apparent that the age variable is correlated with graduation status. Borrowers who enter repayment at 23 to 26 years of age, which is soon after the traditional graduating age, are in fact more likely than other borrowers to have graduated from Texas A&M. And since graduation status is related to a lower likelihood of default, borrowers in this age range also have a lower probability of defaulting. In contrast, borrowers who entered repayment before the traditional graduating age are less likely to have completed their program of study at Texas A&M and have much higher than average default rates. Borrowers whose ages at repayment reflect periods of non-traditional college attendance have average or above average default rates. Nevertheless, this variable has a relatively weak relationship to default.

398

87.1

59

12.9

457

795

87.9

109

12.1

904

8,422

96.8

281

3.2

8,703

1,772

95.3

88

4.7

1,860

445

94.5

26

5.5

471

344

90.3

37

9.7

381

12,176

95.3

600

4.7

12,776

Only White borrowers have default rates below the average default rate for Texas A&M. All other ethnic groups have rates that are higher or much higher than the average default rate. At almost 12 percent, Black borrowers have the highest default rate. In comparison, Hispanic borrowers have an almost 7 percent default rate. Nevertheless, the relationship between ethnicity and default, though statistically significant, is a relatively weak one. Strength of association will be at its highest when a variable defines a category (or group of categories) that has a high default rate and also contains most of the defaulters. In the case of ethnicity, the relationship is weak because knowing someone is Black will identify only 12 percent of all defaulters. (In contrast,

Age

17-20 21-22 23-26 27-30 30-34 34+ All Undergraduates

Ethnicity of Borrower

Total

% of

% of

row

N

row

N

No

Default

Yes

48

N/A N/A N/A N/A

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