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ERIC Number: EJ1056687
Record Type: Journal
Publication Date: 2015
Pages: 24
Abstractor: As Provided
ISSN: ISSN-0884-9153
Paying for Default: Change over Time in the Share of Federal Financial Aid Sent to Institutions with High Student Loan Default Rates
Jaquette, Ozan; Hillman, Nicholas W.
Journal of Student Financial Aid, v45 n1 Article 2 2015
Both federal spending on financial aid and student loan default rates have increased over the past decade. These trends have intensified policymakers' concerns that some postsecondary institutions-- particularly in the for-profit sector--maximize revenue derived from federal financial aid without helping students to graduate or find employment. Prior studies have analyzed federal financial aid disbursements and student loan default rates in isolation from one another. Therefore, little is known about how much federal aid flows through colleges with high student loan default rates. The present study examines change over time and across sectors in the share of federal financial aid disbursed to institutions with "low," "medium," and "high" student loan default rates. We found that the share of federal student aid flowing through colleges with medium and high student loan default rates increased substantially from 2007-08 to 2012-13, but declined in 2013-14 as the national job market improved. However, the reduction in federal financial aid disbursed to for-profit institutions with high student loan default rates occurred prior to the national job-market recovery, suggesting that federal regulations helped to divert federal financial aid from poor-performing institutions.
National Association of Student Financial Aid Administrators. 1101 Connecticut Avenue NW Suite 1100, Washington, DC 20036. Tel: 202-785-0453; Fax: 202-785-1487; e-mail:; Web site:
Publication Type: Journal Articles; Reports - Research
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Laws, Policies, & Programs: Higher Education Act Title IV
Grant or Contract Numbers: N/A