%0 Journal Article
%T Managing Factors That Correlate to High Cohort Default Rate at Public 2-Year Community Colleges in Michigan
%A Emmanuel Obilor Njoku
%J Journal of Financial Risk Management
%P 328-365
%@ 2167-9541
%D 2023
%I Scientific Research Publishing
%R 10.4236/jfrm.2023.124018
%X Community colleges serve
more than a considerable proportion of Americans who could not otherwise attend
colleges by providing access to fulfill their educational goals. Many of the
students enrolled in the institutions look to t<span>he federal government to finance their educational expenses by obtaini</span>ng
federally guaranteed student loans. The borrowers who default on their student
loans cut across race, gender, and age, with Blacks and Hispanic Ameri<span>can males more likely to default. The research
problem addressed in this </span>quan<span>titative
correlational study was the high cohort default rates at 26 public</span> 2-year community colleges in Michigan. The high cohort default rates present
problems to the institutions¡¯ ability to generate revenue to meet educational
budgets. The purpose of this quantitative correlational study was to identify
variables associated with student loan default in the 26 public 2-year
community colleges in Michigan. The study was guided by the conceptual
framework of the student-institution fit model, focusing on individual student
attributes and institution-level variables that accounted for the willingness
to repay behavior. A quantitative methodology with a nonexperimental design was
used t<span>o address the research questions.
Secondary data w</span></span><span><span style=\"font-family:&quot;\">ere</span></span><span><span style=\"font-family:&quot;\"> extracted from th</span></span><span><span style=\"font-family:&quot;\">e National Student Loan Data System and the
Integrated Postsecondary Education <span>Data
System. The results for all the research questions showed that the a</span>ssumptions
of normality, homoscedasticity, and absence of multicollinearity tests were
met, and null hypotheses were not rejected. The study¡¯s findings showed that
institution-level factors did not significantly predict student loan <span>default among borrowers but rather individual
characteristics. I recom</span>mended future research to explore default
patterns among borrowers in public 2-year community colleges after the COVID-19
crisis in terms of federal government policies that could result in a
recommendation for practice for institutions. The practice recommendations
included institutions developing a financial aid education and outreach
program, a default prevention guide, and special attention to students eligible
for Pell Grants.
%K Michigan
%K Student Loan Debt
%K National Data
%K Federal Financial Aid
%K Variables Affecting Student Loan Default
%K Repayment
%K Age
%K Gender
%K Ethnicity/Race
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=129611