Who is More Likely to Default on Student Loans?

Rajashri Chakrabarti, Nicole Gorton, Michelle Jiang and Wilbert van der Klaauw

No 20171120, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: This post seeks to understand how educational characteristics (school type and selectivity, graduation status, major) and family background relate to the incidence of student loan default. Student indebtedness has grown substantially, increasing by 170 percent between 2006 and 2016. In addition, the fraction of students who default on those loans has grown considerably. Of students who left college in 2010 and 2011, 28 percent defaulted on their student loans within five years, compared with 19 percent of those who left school in 2005 and 2006. Since defaulting on student loans can have serious consequences for credit scores and, by extension, the ability to purchase a home and take out other loans, it’s critical to understand how college and family characteristics correspond to default rates.

Keywords: for-profits; Default; student loans (search for similar items in EconPapers)
JEL-codes: D1 J00 Q1 (search for similar items in EconPapers)
Date: 2017-11-20
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