From an Indiana University study of student loan default rates:

Measures of academic momentum and degree completion and the
combination of debt load, number of dependents, and income—factors that
influence one’s ability to repay a loan—exert the greatest influence on the
likelihood of default. Other factors that influence the odds that students may
default include students’ family income, parental education, academic ability,
ethnicity, and age. We found no evidence that the type of institution attended is
a good predictor of the loan repayment behavior of students.

Thanks for that to alert reader Jeff Arthur, who also happens to be vice-president of information systems and financial aid at ECPI College of Technology. Jeff referenced the study in a comment last week, and kindly passed on that and a bunch of other info to inform the discussion of the federal student loan default rates now viewable in the DataSphere.

Jeff makes some other good points about the data. It only reflect the number of loans in default, not the dollar amounts. As Jeff said in an email, "If a person attends one term, drops and received $1000 in student loans, and then defaults, but another borrower graduates with a $10000 balance and repays it, your default rate is 50%, but the dollar default rate is less than 10%."

He adds that the agency that guarantees federal loans in Virginia, ECMC , is responsible for collecting defaulted loans, and they recover 90% of those defaults.

Finally, Jeff sent along a link to check out graduation rates of for colleges to see how they compare with default rates.

Many thanks to Jeff for going along way to inform that data and this discussion.

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• Posted by Matt Chittum in BusinessBusiness
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