A Study Of The Factors Affecting The Student Loans Default

For the college students, the student loans are their hope of change their lives. Student loans are also tools to a more social justice. The high default ratio and many file cases with the loan default thwart the sustainability of student loan program and injure the belief and insistence in social justice and student loan. The loan default is the obstacle to the sustainability of loan program. But in the cycle of causes and results, default is inevitable result of interaction of some factors. This research aimed to discover these factors and their interaction.To trace the causes of the results is one of the basic methods in the research. So to make the scientific examination of the loan default is the basic means of disclose the factors affecting the probability of default. This study collected 1690 samples of borrowing students who were repaying their loans. Through factor analysis, discriminant analysis, cluster analysis and logistic model, this study reveals the statistical relation between the repaying state of the borrowing students and major variants, deduce the factors affecting the probability of default. Found that the most important factors are the total debts and the amount of repayment. The bigger debts, the higher default ratio. The bigger amount of repayment, the higher default ratio, and vice versa. The student loan default is not only the personal issue of the borrowing students. It is related with the higher education institutions, lending banks and society. It's a social issue and is controversial. The results based only on the repayment of the borrowing students can not fully explain the factors concerning the default. So we need to listen to the voice of the participants of the student loans program. Based on the survey data from the students, faculty members, banks and the general public, this research found that the students' repayment abilities, repayment willingness and social credit system have great influence on the default behavior of the students. But the repayment ability is the critical factor. The deduction mentioned above also got the same result.From the two aspects, we found the repayment ability is the critical factor. So what the economic status of the borrowing students? Only this question can be answered can we get the final answer to "repayment ability is the critical factor". Based on the statistical data and relevant research findings, this research made a cautious calculation of the income levels of undergraduates in different employment units, different locations, different industries in recent years. Research found that undergraduates usually got low income at the beginning of their employment and their income gap quite wide. This means that many of the graduates lack the repayment ability.How the student lenders repaying ability and other factors influence the repaying behavior? This research disclosed factors affecting the probability of default. Based on the theory of planned behavior, explain the mechanism of loan default. Found that the income is the basis of repayment, the repayment willingness is the dynamics of behavior Option, and the repayment circumstance is the restraint mechanism. The student's self control ability to repayment is regulating mechanism. The result from their behavior Option and social evaluation is the feedback mechanism. So, the student's behavior is a common outcome of the repayment willingness, repayment circumstance, the resources available and self control ability to repayment.