Default Loan Debt Pattern

The data from the college scorecard website showed a few relations between the institutions in Arkansas and their default loans. There also seems to be a trend for the schools that have the most default debt in the way that they are located mostly in the southern part of the state. The institute with the highest default rate ws East Arkansas Community College. Another correlation for the top 10 default debt data is that there was a parallel between blue-collar, low income areas having higher CDR rates. We should further notice that a majority of these top schools with higher CDR rates are either community colleges or beauty schools and should be additionally examined. Notably, Harding University made the list for an institution with one of the highest default debt rates on the map. There is possibly a correlation between the fact that it is a private institution and its demographics.

For the lowest default rate in Arkansas, the University of Arkansas for Medical Science and the Salon Professional Academy – North Little Rock take the cake. The location for the schools with the lowest defaulting rates showed that there was no specific location trend unlike the higher default debt that can be located in the southeastern parts of Arkansas.

After analyzing the data and creating maps, there were some very clear patterns made in the graphs. The clearest pattern that I noticed, however, was in the top ten highest default rates. The highest default rates are located in southeast Arkansas. In general, southeast Arkansas is known as a lower-income region of Arkansas. This could explain why the default rate is so high in this area. If the people who live there don’t have a steady, or a very high level of cash flow, it is possible that those people would have greater difficulty paying back their student loans.

I also noticed that many of these schools are beauty schools. Does the financial aid process, or lack thereof, at beauty schools make for more defaults? From previous research, I know that beauty school students have considerably more debt that students at other types of institutions. Does this affect the amount of beauty school graduates that are defaulting on their loans?

For the ten lowest default rates, I noticed that these values were more spread out. I also noticed that many of these institutions were based in Little Rock. Is it possible that in order for Little Rock institutions offer great financial aid in order to compete with other institution’s enrollment, causing extremely low default rates?

Data Journalism
Halie Brown
Word Count: 222

The institutions with the highest three-year cohort default rate are in areas that are predominately in, or are bordering, areas that have the highest African American population and are located farther south than the institutions with three-year CDRs that are less than 10 percent. Institutions with exceptionally high 3-year CDRS, or CDRS over 24 percent, are located in areas with predominately blue-collar occupations with the exception of Phillips Community College of the University of Arkansas. All the institutions with a 3-year CDR higher than 24 percent are located in areas with a lower per-capita income from $0 to $31,900. The school with the highest three-year CDR is Credence Institute of Beauty at 29 percent, according to College Scorecard.
The institutions with the lowest three-year CDR are located farther north, or in Central Arkansas, in densely populated areas. All institutions with a three-year CDR of 7 percent and below are located in areas with a large Caucasian population. Institutions with lower 3-year CDRS are in areas that have predominately white-collar occupations and have a higher per-capita income from $36,800 to $194,000 with the exception of Lyon College, John Brown University and Harding University. The institutions with the lowest 3-year CDRs are University of Arkansas Medical Sciences and The Salon Professional Academy – North Little Rock at 2 percent.

We can see here that the ten schools with the highest loan default rate are, interestingly, located largely in the southern part of the state. The worst offender is the Credence Institute of Beauty, with a nearly 30 percent default rate. That’s not so beautiful. It would be worth investigating the high concentration of defaults here because southern Arkansas is, generally speaking, a poorer area. It’s also worth noting that half of these top ten defaulting colleges are beauty/cosmetology schools. The rest are a mixture of community colleges and satellites of larger schools, it looks like. It would be worth investigating the after-graduation income and job opportunities for beauty school grads, as we’ve speculated from day one.

The top ten lowest default rate schools do not have as much of a regional concentration. They’re spread fairly evenly across the state. Including on in southern Arkansas, and a beauty school, at that. The University of Arkansas for Medical Science has the lowest default rate at only 1.5 percent. The University of Arkansas also just barely squeaks onto the list, which is somewhat comforting, personally. The most interesting one to me is Harding University, a private school that has always had the reputation for being very expensive for the education. Interesting value rating, as far as default rates go. There are only three beauty schools on this list, but that still means that the default rates for beauty schools aren’t totally one-sided. So maybe it’s not the smoking gun we’re looking for.

Schools in the southern half of the state tend to have higher default rates than schools in the northern half of the state, according to the data.

There were no institutions in northern Arkansas that were part of the top ten highest default rates. Meanwhile, on the list of top ten lowest default rates, five of the schools were located in the northern half of the state. 

Moreover, it is mainly beauty schools and public institutions that have the higher default rates. Arkansas College of Barbering and Hair Design had the highest rate at 31 percent. Private institutions, such as Hendrix College, with a default rate of 3.8 percent, and Lyon College, with a rate of 6.7 percent, had some of the lowest default rates.

Revisions made:

• Fixed ‘percentage point’ errors
• Added state average repayment rate for males, females, and overall
• Removed ZIP from tooltip, changed to a more identifiable tooltip label ‘% Point Gap M/F’
• Changed coloration
• Identified that the map only shows the top ten disparities in AR

Women at religious colleges in Arkansas were less likely to have begun repaying their loans five years after graduation than their male counterparts, according to federal student loan data.

From 51 Arkansas colleges that reported loan repayment rates after five years, three out of the top five colleges where men were more likely to repay their loans than women had religious ties, according to College Scorecard data.

The College Scorecard is a database compiled by the U.S. Department of Education that records data about universities, including the percentage of students that had paid at least $1 on their student loans after five years.

Williams Baptist College had the largest disparity between male and female repayment rates, with a 15 percentage point gap between male graduates and female graduates, according to College Scorecard.

At Williams Baptist College, 71 percent of male graduates began making payments on their student loans within five years or taking them out, compared to 56 percent of female students in that same time.

In Arkansas, the average repayment rate for male graduates after five years is 45.5 percent and the average for female graduates is 46.5 percent, according to College scorecard. The overall average repayment rate is 46 percent.

The Financial Aid department at Williams Baptist College does not report loan repayment info to the Department of Education, said Barbara Turner, director of Financial Aid.

“Once the students leave us we don’t track their information anymore,” Turner said.

Turner is not required to report male and female debt statistics separately in her federal report, she said.

“We usually only report average loan debt to the Department of Education,” Turner said.

Turner thinks that the College Scorecard got their information on student debt repayment form the companies that issued the loans, she said.

Williams Baptist College is owned and operated by the Arkansas Baptist State Convention, according to the Williams Baptist College website.

At Central Baptist College, the university with the second highest gap between the genders, there was a 14 percentage point difference between each gender’s repayment rate after five years, according to College Scorecard.

Just under 70 percent of male students had begun repaying their loans while 56 percent of females had.

The director of Financial Aid at Central Baptist College was not available for comment.
Central Baptist College is owned and operated by the Baptist Missionary Association of Arkansas, according to the Central Baptist College website.

Baptist Health College rounded out the top five highest disparities, with an approximately 6 percentage point difference between male graduates repaying their loans and female graduates.

At Baptist Health, just under 64 percent of female graduates have begun repaying their loans after five years, compared to just over 70 percent of male graduates, according to College Scorecard.

Natalie Martin, Financial Aid Director at Baptist Health College, did not provide a comment after an initial phone conversation.

Baptist Health College places an emphasis on Christian values, according to a statement from Chancellor Judy Ingram Pile found on the Baptist Health College website.

John Brown University, a private Christian university, was ranked sixth highest for repayment gender disparity, with a five percentage point difference between male and female graduates, according to College Scorecard.

At John Brown University, nearly 82 percent of male graduates had made payments on their loans after five years, compared to 76.5 percent of female graduates.

Gina Pace, assistant director of Financial Aid and Student Loan Specialist at John Brown University, does not think that the school tracks loan repayment data for students, she said.

Graduating students take an online course provided by the Department of Education that offers some counseling on loan repayment, as well as meeting with a financial aid official from JBU their last year, Pace said.

“Before the students leave campus, we do a meeting with on-campus undergrads and talk about repayment,” Pace said. “We encourage them to pay off their loans in two years or less, if they possibly can.”

Pace thinks that most students should be able to repay their loans in two years or less, she said.

“I know we’ve had a pretty good success rate,” Pace said.

The average female student at JBU graduates with $18,650 of loan debt, while the average male graduates with slightly more, $18,750, according to College Scorecard.

Graduates would have to pay approximately $777 each month to pay off their loans within two years.

Contacts:
Barbara Turner, director of Financial Aid at Williams Baptist University
870-759-4112, bturner@wbcoll.edu

Natalie Martin, Financial Aid Director, Baptist Health College Little Rock
501-202-7486, 501-202-7457, financialaid@bhclr.edu (no direct email available)
– Called, talked for a moment, asked to call me back, never returned my call.
Gina Pace, assistant director of Financial Aid and Student Loan Specialist at John Brown University
479-524-7162, GPace@jbu.edu