PERCEPTIONS OF FINANCIAL AID DIRECTORS

The following is taken from the abstract of this dissertation: Students at institutions of higher education take out billions of dollars in federal student loans on a yearly basis. Unfortunately, several students each year fail to meet their financial obligations and default on their federal student loans. The United States Department of Education has devised a federal methodology for tracking default rates at various institutions as well as issuing a national default rate. The method for calculation simply takes the number of defaulters divided by the number of borrowers in repayment. This method is used in determining default rates for all institutions that take part in the Title IV Financial Aid Program. However, this method is flawed in the sense that it does not account for the dollar amounts that are being defaulted on and the cost of these defaults to the American taxpayer.