Student Loans

Characteristics of Defaulted Borrowers in the Stafford Student Loan Program Gao ID: HRD-91-82BR April 26, 1991

Pursuant to a congressional request, GAO reviewed studies of the various characteristics of students who defaulted on loans obtained under the Stafford Student Loan Program.

GAO found that: (1) 12 studies frequently identified such defaulter characteristics as vocational or trade school attendance, low income, minority background, limited financial support, no high school diploma, failure to complete education program, school attendance for 1 year or less, small amount borrowed and unemployment at the time of default; (2) one study concluded that a combination of six defaulter characteristics could predict about two-thirds of student loan recipients who would default; (3) while most defaulters had certain characteristics used to predict default, the majority of borrowers with those characteristics did not default on their loans; and (4) one of the studies showed that, at the time they took out their loans, 65.5 percent of all defaulters had family incomes of $10,000 or less, but only 16.9 percent of all borrowers at that family income level defaulted.

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