Constructing Cohort Default and Repayment Rate Metrics Taking Into Account Student and Institutional Characteristics

• In Event: Understanding Student Loan Default and the Impact of Compulsory Remediation

Abstract

Using the most recent two and three year default rates and repayment rates, released by the Department of Education and the institutional characteristics from IPEDS, we estimated factors that related to default and repayment rates using fixed effects models and constructed predicted and adjusted default and repayment rate metrics. Our analysis shows that, although some of the institutions in this study have high default rates or low repayment rates, their students actually are doing better than we would expect given the students they are serving. Differences in default and repayment rates by educational control and level are reduced once adjusting the student risk factors, indicating that a “one-size-fits-all” set of metrics will not suffice as we evaluate programs and institutions.

Authors

• Mark Schneider, American Institutes for Research

• Lu Michelle Yin, American Institutes for Research