Sunday, March 5, 2017
Lit. Review #2
Nicholas, W. H. "College on Credit: A Multilevel Analysis of Student Loan Default." Review of Higher Education, vol. 37, no. 2, 2014, pp. 169-195 ProQuest Social Sciences Premium Collection
In Nicholas Hillman's article, College on Credit: A Multilevel Analysis of Student Loan Default, he analyzes several reasons why students default on their loans, exactly who is defaulting, and gives a brief overview of how policies have changed that have led to this crisis. Some of the topics analyzed include student demographics, which generally sees white students default less than African Americans; socioeconomic factors, which as you could guess, favors those in the upper class as far as loan repayment goes; academic experience, which provides the general statement that students who do not finish school are in much more danger than those who do; post-collegiate employment, which highlights struggles that can be faced during the time period after graduating in addition to the repayment of loans; and finally, institution level predictors of default, which asks if the business model of certain institutions can actually lead to default over the above topics. After all of this research, he goes even further, using data and analytical models to determine any potential relationships between student loan default and any of the topics above.
Dr. Nicholas Hillman studies higher education finance and policy. His research focuses on how policies affect educational access and success. He serves as the co-chair of UW-Madison's Scholars Strategy Network and is a faculty affiliate in the La Follette School of Public Affairs and the Center for Financial Security. He is an associate professor at the University of Wisconsin, and graduated with a Ph. D and an MPA from Indiana University.
A key finding that Hillman states is that students who attend proprietary institutions, those with actual owners, have a much higher chance of defaulting on loans. This plays into the idea of for-profit colleges, and it makes sense that students attending these institutions have a higher chance of default. For-profit schools, which I will talk about during my research paper, usually leave students with useless prospects after graduation and a mountain of debt.
Another key finding that will also pan out during my research paper is the finding that minority students as well as those from lower-income families have "disproportionately high rates" of default. This links well with the ideas spoken about by Scott Carlson in that minorities are receiving the short end of the stick when it comes to the advancement of higher education, since it is almost non-existent during a time where more and more minorities are making up the constituency of higher education.
"In most studies, the racial/ethnic background of students emerges as a consistent predictor of default: White students are less likely to default than students of color. For example, a study of borrowers at University of North Carolina Greensboro (Greene, 1989) found that African American students had greater default rates than their non-African American peers" (Hillman 174).
"It appears that, even beyond student-level characteristics, the institution in which a student enrolls has a strong relationship with borrowers’ ability to repay their federal student loan debts. More specifically, borrowers attending proprietary or private two-year institutions have greater odds of defaulting when compared against borrowers attending public four-year colleges" (Hillman 183).
"Perhaps more important for setting public policy, the patterns observed within the for-profit sector are particularly critical. To the extent that these institutions are recruiting low-income, minority students, who are single parents, then federal policy could do more to ensure that colleges are not unjustly exploiting these individuals to capitalize on their financial aid dollars" (Hillman 190)
This is yet another great finding that will most likely be used in my research paper because not only does Hillman go into detail discussing the certain topics that can lead to default, but also uses strong idealogical theory in talking about for-profit colleges and how they are taking advantage of students. After all, my research is meant to focus on how and why these predatory schemes were put into place, and if there is anything that can be done about it in the near future.