Factors affecting student loan default: Nevada System of Higher Education

Abstract

Nevada's rate of default on college loans is among the highest in the nation. At the time of this study, there were no research studies on defaulters in the state of Nevada. The present study was designed for initial exploration regarding the relationship between various kinds of student factors and default rates from institutions at the Nevada System of Higher Education. The purpose of this exploratory study was to gain a better understanding of default in Nevada. To gain a better understanding of student loan default in Nevada, the following questions were considered: (1) What is the relationship between age, ethnicity, gender, residency, graduation rate, and degree major and loan default rates? (2) To what extent does that relationship differ between Nevada System of Higher Education institutions? To answer these questions, secondary data was collected from the Division of Default Prevention and Management at the United States Department of Education and the Department of Institutional Research at the Nevada System of Higher Education. Since this study aimed at learning about relationships between several independent variables and a dependent variable, a regression strategy was utilized. Among the findings and conclusions of this study were the following: (1). There was a significant and negative relationship between the factor of age and default rates in the Nevada System of Higher Education, (2). There was a significant and positive relationship between the factor of residency and default rates in the Nevada System of Higher Education, (3). There was no significant relationship between the graduation rates and default rates in the Nevada System of Higher Education. Implications of these findings and future research are discussed in the final chapter.