Student Lending Analytics Blog

Participate in SLA's Flash Survey On Federal Student Loan Trends

A flash survey went out this afternoon to financial aid administrators to determine where they are in regards to their decision-making process in thinking about their federal student loan program.  With 250 responses in the first two hours this will prove to be a very popular survey.  Please drop me a line at tranzetta@studentlendinganalytics.com if you are interested in participating in it.  The survey closes next Tuesday, November 10th at 5 p.m. Pacific time. 

Share of Federal Loans Taken Out By Proprietary (For-Profit) School Students Near 20 Year High

After my earlier post about the history behind the incentive compensation ban and later "safe harbors",
I thought it would be interesting to analyze the historical distribution of federal student loan dollars and how it has varied by school type over the past decade.  Here are the figures for the 1990-2000 period (which include FFEL for the ten year period and DL from 1997-2000), which show proprietary schools share of federal student loan volume dropping from a high of 24.2% in 1990 to a low of 9.4% in 1997. 

Fiscal Yr.	Public 4-year	Private 4-year	Public 2-year	Private 2-year	Proprietary
1990	34.4%	34.2%	5.4%	1.8%	24.2%
1991	37.7%	36.0%	5.8%	1.7%	18.7%
1992	40.0%	36.7%	6.0%	1.8%	15.5%
1993	43.3%	37.7%	5.8%	1.7%	11.5%
1994	42.4%	39.8%	5.6%	1.6%	10.6%
1995	38.1%	42.6%	6.3%	1.8%	11.2%
1996	36.2%	44.5%	6.3%	1.9%	11.1%
1997	45.8%	39.0%	5.1%	0.7%	9.4%
1998	45.2%	39.2%	5.0%	0.7%	9.9%
1999	44.1%	39.2%	4.7%	0.7%	11.3%
2000	43.6%	39.2%	4.5%	0.6%	12.0%

Which Schools Have The Largest Annual Federal Loan Volumes?

From the FSA Data Center, here are the top 20 schools based on their federal loan disbursements for the 2008-09 academic year.  Figures below are in millions of dollars.  I thought it would also be interesting to chart the growth of each of these institutions over the past three years.  Their growth over the 2006-07 to 2008-09 period are provided in the last column:

			Academic Year
School	Type	2006-07	2007-08	2008-09		Change
UNIVERSITY OF PHOENIX	Prop.	2,228.0	3,006.5	3,593.3		61.3%
DEVRY UNIVERSITY	Prop.	390.4	417.1	741.7		90.0%
ITT TECHNICAL INSTITUTE	Prop.	430.7	565.5	736.8		71.1%
KAPLAN UNIVERSITY	Prop.	248.6	419.2	603.3		142.6%
NOVA SOUTHEASTERN UNIVERSITY	Private	414.3	477.0	493.5		19.1%
PENNSYLVANIA STATE UNIVERSITY	Public	368.7	396.3	483.5		31.2%
NEW YORK UNIVERSITY	Private	329.5	385.6	456.0		38.4%
WALDEN UNIVERSITY	Prop.	334.7	449.1	407.3		21.7%
STRAYER UNIVERSITY	Prop.	277.9	399.6	391.8		41.0%
ASHFORD UNIVERSITY	Prop.	67.9	191.5	389.5		473.9%
CAPELLA UNIVERSITY	Prop.	235.7	309.3	378.4		60.5%
UNIVERSITY OF SOUTHERN CALIFORNIA	Private	300.0	325.3	353.6		17.9%
MICHIGAN STATE UNIVERSITY	Public	221.3	243.8	295.9		33.7%
ARIZONA STATE UNIVERSITY	Public	197.3	215.0	295.5		49.8%
OHIO STATE UNIVERSITY (THE)	Public	296.6	334.2	293.5		-1.1%
EVEREST COLLEGE	Prop.	152.3	202.7	285.1		87.1%
AMERICAN INTERCONTINENTAL UNIVERSITY	Prop.	276.0	254.7	284.7		3.1%
UNIVERSITY OF MINNESOTA - TWIN CITIES	Public	235.1	248.5	278.4		18.4%
GRAND CANYON UNIVERSITY	Prop.	127.1	283.3	272.2		114.2%
TEMPLE UNIVERSITY	Public	209.1	249.8	269.1		28.7%

SLA Flash Survey Finds Forty-Three Percent Of Schools Have Financial Literacy Programs; Top Subjects Include Budgeting, Loan Repayment, Credit Cards

Here is the results of the SLA 2009 Financial Literacy Survey: 

Download Financial_Literacy_Programs_Flash_2009

Here is a summary of survey in which 260 financial aid administrators responded to questions about their financial literacy programs:

Which Financial Literacy Programs Are Most Popular With The Financial Aid Community?

I thought I would provide a preview to the results of the recent SLA 2009 Flash Survey on Financial Literacy programs (should have it completed by tomorrow).  So, what you would expect if you asked almost 100 FAAs the following question?:

What source(s) would you recommend for a financial aid administrator interested in developing a financial literacy program for his/her institution?  Please include any educational institutions that you are aware of that have stellar programs.

NEFE's CashCourse stood out atop this list with 15 mentions, which isn't surprising since their website lists over 313 participating universities.   Given the small sample size, please don't extrapolate market shares based on the figures below.  I find the diversity of options the more interesting finding of this survey, with almost 50 recommended programs identified by the almost 100 respondents to this question.  The market has clearly not coalesced around two to three standard financial literacy programs but instead has relied on a rich array of non-profits, lenders, guarantors, universities and government as the primary sources of content.  The College Access and Completion Innovation Fund in SAFRA is expected to provide hundreds of millions of dollars to states and institutions to specifically fund financial literacy programs so this fragmentation may continue.  This information on the financial literacy providers will be helpful also as SLA develops a comprehensive list of financial literacy resources (click on link for more details about this project). 

Here are the providers mentioned by the respondents to the open-ended question in the SLA 2009 Flash Survey on Financial Literacy:  

Trends in Financial Aid Applications At School Level: For-Profits See Large Increases

I saw the results of the NASFAA survey this morning which showed how financial needs of families with college-bound students continue to grow.  This survey analyzed financial aid applications, Pell Grants, aid appeals and institutional aid as markers for this trend. 

With the increased access to databases on the FSA Data Center, I thought that it would be interesting to analyze trends at the school level for FAFSA filings, Pell Grants and federal loans. 
Part 1 of this analysis will look at financial aid applications (also known as FAFSAs filed):

FAFSA Analysis

What's Behind Sharp 23.7% Increase In Pell Grants In 2008-09?

The short answer:  more recipients getting larger grants.  I ran some numbers off of the FSA Data Center site to analyze Pell Grant trends over the past three years:

Academic Year	Recipients	Disbursements	$/Recipient
2008-09	6,259,471	$18,139,589,869	$2,898
2007-08	5,684,582	$14,666,078,963	$2,580
2006-07	5,289,141	$12,791,917,984	$2,419
Year-Over-Year Growth
2008-09	10.1%	23.7%	12.3%
2007-08	7.5%	14.7%	6.7%
School Mix	2008-09	2007-08	2006-07
Public	62.1%	63.6%	64.8%
Proprietary	23.5%	20.9%	19.3%
Private	14.4%	15.5%	15.9%

--------------------------
Insights: 

• The 23.7% increase in Pell Grant disbursements for 2008-09 was driven by a 10.1% increase in recipients to 6.3 million and a 12.3% increase in the average grant size to $2,898. 
• Proprietary schools saw the sharpest increase in Pell Grant disbursements over the past three years, rising from a 19.3% share of Pell Grants in 2006-07 to 23.5% in 2008-09. 

How Does Your State Stack Up On the Federal Loan Default Charts?

I came across this article in the Phoenix New Times "Arizona Leads Nation in Student Loan Defaults" and thought that I would see how all the other states stacked up.  I thought it would be instructive to see what percentage of borrowers in repayment came from for-profit schools since they tend to default at higher rates.  In fact, as you will see Arizona has the highest percentage of borrowers at for-profit schools, primarily driven by the fact that all of the University of Phoenix campuses, the largest for-profit in the country, are captured under one OPEID, which is based in Arizona.  Note that the upper Midwest states (the Dakotas, Minnesota and Wisconsin) have four of the five lowest cohort default rates. 

Here are the 50 states and DC ranked by 2007 cohort default rate from highest to lowest:

Which Guarantors Have Lowest Cohort Default Rates?

Here is the top 10 list for the 2007 cohort year:

Top 5 Guarantors With Under 25,000 borrowers in repayment for 2007

Guarantor	Default Rate
Utah Higher Education Assistance Authority	2.1%
Guaranteed Student Loan Program	2.2%
South Carolina State Education Assistance Authority	2.8%
North Carolina State Education Assistance Authority	2.9%
New Hampshire Higher Education Assistance Foundation	3.1%

Top 5 Guarantors With Over 25,000 borrowers in repayment for 2007

Guarantor	Default Rate
Great Lakes Higher Education Corporation	2.9%
American Student Assistance	3.7%
College Assist	4.0%
Educational Credit Management Corporation	4.8%
Education Assistance Corporation	5.0%

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Interesting to see that four of top five guarantors in the under 25,000 borrowers in repayment category have default rates below the best large guarantor.  Anyone fathom an explanation? 

Here is the spreadsheet with all guarantors listed:  Download FY2007_GA_Rates_Official_TR

Have a great weekend!

Will Student Loan Reform Legislation Cause Disruptions In Servicing And Administration of Securitized FFELP Loans?

Moody's says "No."  Here is a summary of a report they released today:

"If passed in substantially its current form, the Student Aid and Fiscal Responsibility Act (SAFRA) moving through Congress would not affect the ratings of the vast majority of outstanding Federal Family Education Loan Program (FFELP) student loan transactions, says Moody's Investors Service in a new report.  Loans serviced or administered by small for-profit companies and some not-for-profit corporations could be affected, though the impact would be mild.