What Accounts for Gaps in Student Loan Default, and What Happens After. Evidence Speaks Reports, Vol 2, #57

A previous "Evidence Speaks" report described the high rates at which student loan borrowers default on their repayment within 12 years of initial college entry, often on relatively modest amounts of debt. A striking pattern emerging from that and other prior work is how dramatically default rates vary by institution sector and by race/ethnicity: black, non-Hispanic entrants and for-profit entrants experience default at much higher rates than other students. This report examines whether these disparities in default rates can be explained by other factors, noting what happens after a default and whether this also varies by race or institution sector. It utilizes data released by the U.S. Department of Education in October 2017, linking survey and administrative data from the Beginning Postsecondary Student (BPS) surveys to administrative data on debt and defaults from the National Student Loan Data System. The report focuses on the BPS 2003-04 survey sample, which is nationally representative of college entrants who enrolled for the first time in 2003-04. [For "The Looming Student Loan Default Crisis Is Worse than We Thought. Evidence Speaks Reports, Vol 2, #34," see ED581719.]