Education Commons^™

Are Student Loan Default Rates Linked To Institutional Capacity?, Terry T. Ishitani, Sean A. Mckitrick

Journal of Student Financial Aid

As more undergraduates have taken out loans to attend college, the number of borrowers who fail to repay their student loans has increased. While previous research has focused on students’ likelihood to default, this study employed institutional cohort default rates (CDRs) as an outcome variable. Using Integrated Postsecondary Education Data System, this study investigated the association between institutional effectiveness and CDRs. Coupled with multilevel modeling, the study also observed the effects of state-level factors, such as state appropriation and unemployment, on CDRs. The results showed that institutional characteristics—e.g., proportion of minority students, admission test scores, retention rates, and instructional expenses—are …