Resident not State Funded Resident Non-resident All Undergraduates
Cramer s V
0.02 0.02 0.02 0.02 0.01 0.01 0.00 N/A N/A
0.09 0.08 0.08 0.08 0.07 0.06 0.04 N/A N/A
-0.26 -0.25 -0.18 -0.21 -0.13 0.19 0.07 N/A N/A
-0.08 -0.08 -0.06 -0.07 -0.04 0.05 0.02 N/A N/A
A borrower’s financial circumstances and the financial assistance a borrower receives appear to be related to the probability that the borrower will default. However, while the variables in this section have statistically significant relationships to default, none of the associations are particularly strong, especially compared to other variables in the study. In short, though financial aid factors might ultimately influence default behavior, it is likely, given this study’s findings, that other variables are much more important.
Expected Family Contribution (EFC)
Several of the financial aid variables have missing categories with default rates that are less than the average for Texas A&M. In large part, the lower than average default rates belong to borrowers who attended Texas A&M as undergraduate students but did not obtain financial assistance until they were graduate students (and so have missing values for undergraduate financial aid variables). Since graduate-level borrowers have low default rates, these missing categories also tend to have low default rates.
Statistical Summary: Financial Aid
Variable Expected Family Contribution (EFC)
Total Family Contribution (TFC) Total Loan Aid Adjusted Gross Income Student Adjusted Gross Income Parents
Significant Significant Significant Significant
Amount of Need Total Other Aid Dependency Status Total Work Study Aid
Significant Significant Not significant Not significant
In general, as borrowers’ Expected Family Contributions increase, their default rates decrease. The borrowers with zero EFC default at the highest rate (8.0 percent). In contrast, borrowers who are expected to contribute more than $12,000 have the lowest default rate (2.4 percent). To the extent that EFC is a surrogate for family income, this result suggests that