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The Characteristics Associated with Student - page 52 / 94

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knowing that borrowers have GPAs of less than 2.5 will account for 82.5 percent of all defaulters). Furthermore, most defaulters are White, since a large majority of all borrowers are White. But knowing that a borrower is White is not helpful in identifying defaulters because such a small percentage of White borrowers are defaulters.

9,295

96.3

362

3.7

9,657

520

94.4

31

5.6

551

44

93.6

3

6.4

47

1,751

93.1

129

6.9

1,880

22

91.7

2

8.3

24

544

88.2

73

11.8

617

12,176

95.3

600

4.7

12,776

Ethnicity of Student

White Asian/Pacific Islander Native Indian/Alaskan Hispanic Other Black All Undergraduates

Total

% of

% of

row

N

row

N

No

Default

Yes

Highest Level Attained by Father

In general, the higher the level of education attained by a borrower’s father, the lower the borrower’s probability of default is. Borrowers whose fathers went to college have a lower default rate than other borrowers. (Incidentally, as the table shows, the majority of borrowers at Texas A&M have fathers who went to college.) Borrowers whose fathers attended high school, but reached no higher level, have a default rate that is slightly above the average for Texas A&M. For the relatively few borrowers whose fathers did not get as far as high school, the default rate is much higher. The association between this variable and default might suggest that higher attainment by the borrower’s father motivates the borrower to succeed in educational attainment and perhaps to succeed in loan repayment as well. (There is a statistically significant but weak relationship between the Highest Level Attained by Father and the graduation status of the borrower.) Alternatively, the relationship might merely reflect that the fact that more highly educated fathers have higher incomes and can better help their offspring with student loan repayment.

Highest Level of Father

College or Beyond High School Missing Middle School/Junior High

6,830

96.1

279

3.9

3,809

95.1

197

4.9

833

94.6

48

5.4

395

90.6

41

9.4

Default

N

Yes

No

% of row

N

% of row

Total 7,109 4,006 881 436

49

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