ERIC ED362091: Student Loans: Default Rates at pdf

ERIC ED362091: Student Loans: Default Rates at

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Description of the Book:

This report looks at information on federally guaranteed student loans and loan defaults for students attending Historically Black Colleges and Universities (HBCUs) and how the application of federal default rate thresholds to HBCUs beginning in July 1994 might affect their participation in federal student aid programs. The July 1994 thresholds may bar postsecondary institutions with high default rates from continuing to participate in various federal student financial aid programs. The study used a list of HBCUs and loan and default data for fiscal years 1987-91 from the Federal Family Education Loans (FFEL) program. To estimate the number of HBCUs that could become ineligible in fiscal year 1994 at varying default rate thresholds, the study used cohort default rates for fiscal year 1988-90. The analysis found that of the $13.5 billion in FFELs made in fiscal year 1991, less than 3 percent went to students attending HBCUs. If HBCU cohort default rates remain the same for the future as they were for 1988-90 (about 23 percent), about 33 of the 105 HBCUs will lose their FFEL eligibility in fiscal year 1994 and as many as 62 of the HBCUs could be subject to a state review.

The 33 HBCUs accounted for about 12 percent of HBCU loan volume in fiscal year 1991. (JB

• Creator/s: ERIC
• Date: 1993-08
• Year: 1993
• Book Topics/Themes: ERIC Archive, Black Colleges, Educational Finance, Eligibility, Federal Programs, Higher Education, Incidence, Loan Default, Statistical Analysis, Student Financial Aid

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