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The Characteristics Associated with Student - page 61 / 94

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61 / 94

1,818

95.9

77

4.1

1,895

1,256

96.4

47

3.6

1,303

1,046

98.1

20

1.9

1,066

657

95.4

32

4.6

689

12,176

95.3

600

4.7

12,776

Amount of Need is the difference between the Cost of Attendance for a borrower and the Expected Family Contribution.

Adjusted Gross Income - Parents

40,001-60,000 60,001-80,000 80,001 and higher Missing All Undergraduates

Amount of Need

Total

% of

% of

row

N

row

N

No

Default

Yes

1,306

97.8

29

2.2

1,335

1,228

96.8

40

3.2

1,268

3,451

95.7

155

4.3

3,606

3,152

93.8

208

6.2

3,360

2,399

94.6

137

5.4

2,536

640

95.4

31

4.6

671

12,176

95.3

600

4.7

12,776

Borrowers with no financial need have very low default rates (2.2 percent) and those with high need have default rates that are above average (between 5.4 percent and 6.2 percent). However, because it is impossible to use this variable to isolate a group of borrowers with a very high default rate, the strength of association for this variable is weak.

There are two ways that borrowers can fall into the highest need categories. One way is to have a zero or near-zero EFC. The other way is to face high costs of attendance, either because program costs are higher or because the borrower is taking a high number of course hours. Since the high need categories are a mixture of these two types of borrowers, Financial Need does not merely mirror the relationship that we see between the income variables (EFC, TFC and AGI) and default behavior. If it did, the table below would show a greater range of default rates than it does.

Amount of Financial Need

Less Than Zero 1-2,500 2,501-7,500 7,501-10,000 10,001 and higher Missing All Undergraduates

Total

% of

% of

row

N

row

N

No

Default

Yes

58

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