This study examines the institutional factors associated with student loan default. When a college has more than 30% of its students default on their loans, then the institution faces federal sanctions that could make them ineligible from participating in the federal student loan program. Using Integrated Postsecondary Education Data System (IPEDS) data from 2008 (N = 4,488), and applying logistic regression, this study finds for-profit colleges, those accredited by vocational education programs, and those serving diverse student bodies are most at risk of federal sanctions. It concludes that accreditation reform and improving graduation rates could be long-term solutions to addressing the default problem.
BaumS.MaJ. (2007). Education pays for individuals and society. Washington, DC: College Board.
2.
BaumS.SchwartzS. (2006). How much debt is too much? Defining benchmarks for manageable student debt. Washington, DC: The College Board.
3.
CruceT. M. (2009). A note on the calculation and interpretation of the Delta-p statistic for categorical independent variables. Research in Higher Education, 50, 608-622.
4.
DemingD. J.GoldinC.KatzL. F. (2012). The for-profit postsecondary school sector: Nimble Critters or Agile Predators?Journal of Economic Perspectives, 26, 139-164.
5.
DillonE.SmilesR. (2010). Lowering student loan default rates: What one consortium of historically Black institutions did to succeed. Washington, DC: Education Sector.
FosseyR.BatemanM. (1998). Condemning students to debt: College loans and public policy. New York, NY: Teachers College Press.
9.
Government Accountability Office. (1990). Defaulted student loans: Analysis of defaulted borrowers at schools accredited by seven agencies. Fact sheet for congressional requesters. Washington, DC: Author.
10.
GladieuxL. (1995). Federal student aid policy: A history and an assessment. Financing postsecondary education. Washington, DC: The Federal Role.
11.
GrossJ. P.CekicO.HosslerD.HillmanN. (2009). What matters in student loan default: A review of the research literature. Journal of Student Financial Aid, 39(1), 19-29.
12.
HancockK. E. (2009). A certainty of hopelessness: Debt, depression, and the discharge of student loans under the bankruptcy code. Law & Psychology, 33, Review. 151.
HearnJ.HoldsworthJ. (2004). Federal student aid: The shift from grants to loans. In St. JohnE. P.ParsonsM. (Eds.), Public funding of higher education: Changing contexts and new rationales (pp. 40-59). Baltimore, MD: Johns Hopkins University Press.
15.
HellerD. E. (2011). The impact of gainful employment regulations. Change: The Magazine of Higher Learning, 43(5), 58-64.
HillmanN. (in press). College on credit: A multi-level analysis of student loan default. Review of Higher Education.
18.
The Institute for College Access and Success. (2011). Student debt and the class of 2010. Washington, DC: Author.
19.
JohnsonJ.ConradC.PernaL. (2006). Minority-serving institutions of higher education: Building on and extending lines of inquiry for the advancement of the public good. In ConradC.SerlinR. (Eds.), The sage handbook for research in education: Engaging ideas and enriching inquiry (pp. 263-278). London, England: SAGE.
20.
KinserK. (2005). A profile of regionally accredited for-profit institutions of higher education. New Directions for Higher Education, 2005(129), 69-83.
21.
KnappL. G.SeaksT. G. (1992). An analysis of the probability of default on federally guaranteed student loans. The Review of Economics and Statistics, 74, 404-411.
LongJ. S. (1997). Regression models for categorical and limited dependent variables. Thousand Oaks, CA: SAGE.
25.
LooneyS. (2011). Cohort default rates in context. Washington, DC: Institute for Higher Education Policy.
26.
McMahonW. W. (2009). Higher learning, greater good: The private and social benefits of higher education. Baltimore, MD: Johns Hopkins University Press.
27.
MonteverdeK. (2000). Managing student loan default risk: Evidence from a privately guaranteed portfolio. Research in Higher Education, 41, 331-352.
28.
MorganJ. (2011). A seal we can trust. Washington, DC: Center for American Progress.
29.
MumperM. (2002). The student aid industry. In KingJ. (Ed.), Financing a college education: How it works, how it’s changing. American Council on Education (pp. 64-77). Phoenix, AZ: Oryx Press.
30.
PengC.LeeK.IngersollG. (2002). An introduction to logistic regression analysis and reporting. The Journal of Educational Research, 96, 3-14.
31.
PodgurskyM.EhlertM.MonroeR.WatsonD.WittstruckJ. (2002). Student loan defaults and enrollment persistence. Journal of Student Financial Aid, 32(3), 27-42.
32.
ScottG. A. (2010). For-profit schools: Large schools and schools that specialize in healthcare are more likely to rely heavily on federal student aid (Report to congressional committees, GAO-11-14). Washington, DC: Government Accountability Office.
33.
ThelinJ. R. (2004). A history of American higher education. Baltimore, MD: The Johns Hopkins University Press.
34.
TierneyW. G. (2011). Too big to fail: The role of for-profit colleges and universities in American higher education. Change: The Magazine of Higher Learning, 43(6), 27-32.
U.S. Department of Education. (2012). The database of accredited postsecondary institutions and programs. Washington, DC: Author. Retrieved from http://ope.ed.gov/accreditation/
