Kapsalis, Constantine (2006): Factors Affecting the Repayment of Student Loans. Published in: (March 2006)
Download (174kB) | Preview
This study shows that the ability of students to repay their Canada Student Loan Program (CSLP) depends primarily on their future earnings rather than on the size of debt incurred. In fact, the amount of debt does not appear to have much of an effect, except when high loan amounts are combined with low incomes. In the case of those who consolidated in 1994-95, the loan amount had an effect on default rates only when it was greater than $20,000 (federal CSLP portion) and the income of the students was lower than $40,000.
The relationship between income and default emerges soon after graduation and is a strong predictor of the final repayment outcome. Moreover, future earnings, as well as the probability of loan repayment, are strongly correlated with the type of education (type of degree, field of study, and type of institution). The type of program and local labour market conditions can be used to predict the risk of default of loans.
|Item Type:||MPRA Paper|
|Original Title:||Factors Affecting the Repayment of Student Loans|
|Keywords:||student loans; post-secondary education|
|Subjects:||I - Health, Education, and Welfare > I2 - Education and Research Insititutions > I21 - Analysis of Education|
|Depositing User:||Constantine Kapsalis|
|Date Deposited:||09. Oct 2010 17:57|
|Last Modified:||19. Feb 2013 08:52|
Allen, Mary and Chantal Vaillancourt (2004): Class of 2000: Profile of Postsecondary Graduates and Student Debt. Statistics Canada, Catalogue no. 81-595-MIE — No. 016.
Canada Student Loans Program (2004): Annual Report 2001-2002. Human Resources and Skills Development Canada.
Finnie, Ross (2001): Measuring the Load, Easing the Burden – Canada’s Student Loan Programs and the Revitalization of Canadian Postsecondary Education. C.D. Howe Institute, Commentary, November.
Finnie, Ross and Saul Schwartz (1996): Student Loans in Canada – Past, Present, and Future. C.D. Howe Institute.
Kapsalis, Constantine (2006): Full-Time Post-Secondary Enrolments and the Canada Student Loans Program. Human Resources and Skills Development Canada (mimeo).