![]() Default rates for community college (two-year public college) students are nearly 25 percentage points higher than those for their counterparts in four-year public colleges. Interestingly, though the difference in default rates between two- and four-year private college students is not large (less than 5 percentage points at age thirty-three), this is not the case for public college students. While this largely reflects the higher earnings prospects enjoyed by four-year students, it also partly reflects the earlier start of the loan repayment period for two-year students and inherent differences between two- and four-year students. For every college type (public, not-for-profit and for-profit), two-year students (dashed lines) have higher default rates than four-year students (solid lines). In contrast, at every age, four-year private not-for-profit students-the solid gold line-have the lowest default rates. To examine differences in default rates by college type, we classify student debt holders by the type of college attended: did they attend a public, private not-for-profit, or private for-profit college, and was it a two-year institution or a four-year institution?Īs seen in the chart below, students who attended private for-profit institutions have the highest default rates after their mid-twenties (shown in the blue lines). We study default rates by age: out of all student loan holders in the 1980–86 birth cohorts, what fraction of people of a given age has defaulted on at least one of their student loans? We focus on the characteristics associated with the highest degree-granting institution a student attended before age twenty-seven. In this post, since we focus on determinants of student loan default, we limit our sample to students who took out student debt to finance their education. For example, our results could partially reflect differences in the backgrounds and financial means of students who choose to attend various colleges.Īs in our previous work with this data set, we focus on individuals born between 19 and track their college attendance and student loan default status by age. Throughout this discussion, it is important to note that our analysis is descriptive and, while suggestive, does not necessarily imply causation. To answer these questions, we utilize a unique data set that matches the New York Fed Consumer Credit Panel (CCP), based on Equifax data, to National Student Clearinghouse (NSC) education data, allowing us to track student debt and educational attainment over time for a representative sample of young adults.
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