Financial Literacy and Student Loan Default

• In Event: 2484 - Section on Sociology of Education Refereed Roundtable Session
  In Refereed Roundtable 60min: Table 09. Higher Education 2

Abstract

Sixty percent of Americans borrow student loans in order to access higher education. More than $100 billion of student debt is delinquent or defaulted. The student-level impact is palpable as defaults results in life-altering negative impacts for student borrowers. However, high cohort default rates—the percentage of students from one institution entering default in a particular time period—can result decertification by the Department of Education for colleges and universities. This means the institutions no longer has access to federal aid for its students. Focusing on organization-level solutions to student loan default can help give colleges and universities to the ability to lower their cohort default rates. This working paper proposes the use of institutional data from the Department of Education as well as financial literacy program data gathered from educational institutions to determine if financial literacy programs have an impact on cohort default rates.

Author

• Jennifer Suzanne-Kempton Dudley, California State University-Northridge