Personal and Family

Being separated, divorced, or widowed increases default probability by over 7 percent, and having dependent children increases default probability by 4.5 percent per child (Volkwein and Szelest 1995).
Having dependent children combined with being single, separated, divorced, or widowed produces default rates above 40 percent (Volkwein et al. 1998).
The variables that reduce default are substantially the same across ethnic populations, but their influence on non-Whites is larger than it is on Whites:
among all populations, being female and being married lower the default rate and do so more dramatically for non-Whites than for Whites (Volkwein et al. 1998).
Loan Repayment Factors
Borrowers who have ever been in deferment or forbearance are less likely to default, perhaps because borrowers who are organized enough to follow through on using deferments are also better able to handle repayment in general (Woo 2002).
Borrowers who went into delinquency more than once were more likely to default. Each period of delinquency increases the borrower’s chances of default by 4.8 percentage points, which is almost 50 percent of the original probability (Woo 2002).
Knowledge of Repayment Obligation
Lack of knowledge about repayment is not a strong factor in default: 93 percent of borrowers surveyed realized the loan had to be repaid. However, one in four was confused by the repayment process, and three out of four were not aware of loan deferment options (Volkwein et al. 1998).
Repayment After Default
Follow-up studies of defaulters reveal that two out of three reported making payments since the official default first occurred. Not only did 66 percent resume payment, but 31 percent completed payment (Volkwein and Cabrera 1998).

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