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This is to certify that the

dissertation entitled

THE RELATIONSHIP BETWEEN SELECTED CHARACTERISTICS OF
COLLEGE STUDENTS AND THEIR UNIVERSITY DEBTS

presented by

Leonard V. Kogut, Jr.

has been accepted towards fulﬁllment
of the requirements for

Ph.D. degree in Educational Administration

 

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TO AVOID FINES return on or before date due.
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6/01 cJClRClDatoDuepGS—sz

THE RELATIONSHIP BETWEEN SELECTED CHARACTERISTICS OF

COLLEGE STUDENTS AND THEIR UNIVERSITY DEBTS

By

Leonard V. Kogut, Jr.

A DISSERTATION

Submitted to
Michigan State University
in partial fulﬁllment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Educational Administration

1995

ABSTRACT
THE RELATIONSHIP BETWEEN SELECTED CHARACTERISTICS OF
COLLEGE STUDENTS AND THEIR UNIVERSITY DEBTS
BY

Leonard V. Kogut, Jr.

Students are paying an increasingly larger proportion of the cost of their
education, primarily because the State of Michigan appropriations declined as a
percentage of the general fund revenues from ﬁscal 1989 to 1994. With the
increased ﬁnancial burden placed on students, they are experiencing an increased
indebtedness to the internal and external loan fund(s) and their accounts receivable.

The focus of the researcher was to look at all freshman students who were
enrolled at Ferris State University in Big Rapids, Michigan, during the Fall 1991,
1992, and 1993 terms. The researcher reviewed the relationships of selected
student characteristics, including admission, ﬁnancial aid, academic success. and
demographic variables, to determine whether differences existed between
nondebtors and debtors with regard to these variables. The entire freshman
population for the three years of the study was used. Therefore, statistical sampling
was not used to draw any inferences because the full population was used in the

study.

Leonard V. Kogut, Jr.

The researcher concluded that predictors do exist to identify potential debtors.

and the university could use the analysis and results in the admission process.
Students’ family income was the most signiﬁcant predictor of a student debtor. The
other signiﬁcant predictors were found to be directly or indirectly tied to family
income. These predictors were ethnic origin, ACT composite score, and number of
siblings in college. Student’s cumulative grade point average was also considered
an effective predictor of a debtor. County of residence was considered a less
signiﬁcant predictor. Ideally, these predictors should not preclude or exclude
students from admission to the university. Rather, they could be used as a planning
mechanism for the student and the university to provide assurances that resources
match need. Proactive strategies could be employed to provide assurance that
targeted high—risk students can become part of the nondebtor group. The university
could consider improving the academic proﬁle and retention of students to ultimately
reduce their risk of becoming debtors not only from internal and external loans but

balances on their accounts receivable.

Copyright by
LEONARD V. KOGUT. JR.

1 995

To my wife, Annette Marie Kogut, whose love, understanding, support, and
sacriﬁce over the years have given me the opportunity to achieve all I have set out
to accomplish.

To my children, Leonard V. Kogut Ill and Thomas E. Kogut, who have given
me the light to keep things in perspective. It is my hope they see the same light and

it creates for them a strong vision for their future.

ACKNOWLEDGMENTS

I extend sincere thanks to a number of signiﬁcant contributors to the
completion of this work. To my committee, whose support and guidance were
invaluable: Dr. Louis Hekhuis, Dr. Eldon Nonnamaker, Dr. James Snoddy, and Dr.
Fred Whims. A special thank-you to Dr. Hekhuis for his patience, direction, and
understanding as the chairman of my committee.

To Dr. James Maas, Carol Maki, Carol Nemec, and Phyllis Powell, whose
assistance, counsel, and direction helped me make it through the rough spots. To
Jo Colby for being sure I had everything complete during the complete doctoral
process. To Sue Cooley Miller for her strength as an editor and typist.

I acknowledge Roy J. Tiede and Ferris State University for giving me the
ﬂexibility to complete my studies.

To my father-in-law, Edward T. Foulds, who believed in my skills early in my
career and gave me the initial opportunity that opened the doors for my future.

Last and most important, I acknowledge and offer heartfelt thanks to my
loving parents, Leonard V. Kogut and Gertrude P. Kogut, for providing me with the
basis for believing in myself, setting goals, the ability to move forward no matter how

many times you fail, and never forgetting to thank God.

vi

TABLE OF CONTENTS

Page

LIST OF TABLES ................................................ ix
Chapter

I. INTRODUCTION TO THE STUDY ........................ 1

Introduction ............................ '. ............. 1

Statement of the Problem ............................... 2

Background of the Problem .............................. 3

Purpose of the Study ................................... 7

Importance of the Study ................................ 8

Research Questions .................................. 11

Delimitations and Limitations ........................... 12

Delimitations ....................................... 12

Limitations ........................................ 12

Deﬁnition of Terms ................................... 12

Organization of the Dissertation ......................... 15

ll. REVIEW OF THE LITERATURE ......................... 17

Introduction ......................................... 17

TheFundingoingherEducation 18

Financial Aid in Higher Education ........................ 20

Enrollment in Higher Education .......................... 23

External Support of Higher Education ..................... 26

State Funding of Higher Education ....................... 27

Ill. METHODOLOGY .................................... 30

Introduction ......................................... 30

The Study Population ................................. 31

Data Collection ...................................... 31

vii

Research Questions and Hypotheses ..................... 32

Data Processing and Analysis ........................... 34
IV. RESULTS OF THE DATA ANALYSIS ..................... 36
Introduction ......................................... 36
Freshman Debt Summary .............................. 36
Cost of Attendance ................................... 37
Average Family Income ............................... 38
Findings Relative to the Research Questions ............... 39
Research Question 1 ................................ 39
Research Question 2 ................................ 44
Research Question 3 ................................ 51
Research Question 4 ................................ 55
Summary of Findings Relative to the Research Questions ..... 64
Summary of Findings ................................. 72
Most Signiﬁcant Finding .............................. 72
Other Signiﬁcant Findings ............................ 73
Less Signiﬁcant Finding .............................. 76

V. SUMMARY, CONCLUSIONS, RECOMMENDATIONS FOR
PRACTICE, IMPLICATIONS FOR RESEARCH. AND

REFLECTIONS ...................................... 78

Introduction ......................................... 78

Summary ........................................... 79

Conclusions ......................................... 81

Most Signiﬁcant Conclusions .......................... 81

Other Signiﬁcant Conclusions ......................... 82

Less Signiﬁcant Conclusion ........................... 86

Recommendations for Practice .......................... 88

Implications for Future Research ........................ 89

Reﬂections ......................................... 93
APPENDICES

A. County of Residence of Debtors and Nondebtors ............ 95

B. General Summary of FSU Student Characteristics .......... 102

C. Summary of FSU Debtor and Nondebtor Characteristics ..... 105

D. Multiple Regression Equation and Correlation Matrix ........ 111

REFERENCES ................................................ 1 14

viii

Table

10.

11.

12.

13.

14.

15.

16.

LIST OF TABLES

Page
Summary of Freshman Debt Figures by Term .............. 37
Cost of Attendance and the CPI ......................... 37
Average Freshman’s Family Income, and Adjusted for
the CPI ............................................ 38
Application Dates, by Month, for Debtors and
Nondebtors for Fall Term 1993 .......................... 40
Colleges in Which Nondebtors and Debtors Were Enrolled . . . . 42
Financial Aid Need by Nondebtors and Debtors ............. 45
FSU Financial Aid Trends From 1989 to 1994 .............. 46
Financial Aid Awarded to Nondebtors and Debtors .......... 47
Family Income of Nondebtors and Debtors ................. 48
Cumulative Loans of Nondebtors and Debtors .............. 49
Financial Aid Applications for Debtors and Nondebtors ....... 50
Number of Siblings of Nondebtors and Debtors Who
Were in College ...................................... 52
Grade Point Averages of Nondebtors and Debtors ........... 53
ACT Composite Scores of Nondebtors and Debtors .......... 56
Ethnic Origin of Nondebtors and Debtors .................. 59
Average Ages of Nondebtors and Debtors ................. 61

ix

17.

18.

19.

A1.

B1.

C1.

D1.

Gender of Nondebtors and Debtors ...................... 62

Marital Status of Nondebtors and Debtors ................. 63
Residency Status of Nondebtors and Debtors .............. 65
County of Residence of Nondebtors and Debtors ............ 95
General Summary of FSU Student Characteristics ......... 102
Summary of FSU Debtor and Nondebtor Characteristics ..... 105
Multiple Regression Equation and Correlation Matrix ........ 111

CHAPTER I
INTRODUCTION TO THE STUDY

Inttgduminn

The ﬁnancing of higher education has changed signiﬁcantly over the last two
decades. Colleges and universities have an ever-changing pool of students and
have been forced to change the mix of income sources. In addition, institutions of
higher education have expanded into various investment portfolios, which include
restaurants, real estate holdings, research facilities, and auxiliary operations
(Seymour, 1992).

The two major challenges facing higher education in the 1990s will be tuition-
rate increases and the availability of ﬁnancial aid (Dunn, 1993). Tuition policy and
ﬁnancing continue to top the list of concerns of leaders in higher education (Johnson
8 Myerson, 1994). The primary concern continues to be tuition increases exceeding
a family’s ability to pay. During the 10—year period ending June 30, 1993, gross
tuition prices more than doubled, rising an average of 8.5% per year. By
comparison, the Consumer Price Index for the same period rose an average 3.8%
annually (Jacquin 8 Goyal, 1995). In 1992, tuition rates at public colleges and
universities rose at double-digit rates for the second year in a row, increasing at

three times the rate of inﬂation (Evangelauf, 1992).

1

2

Tuition rates for 1993 increased less than 6%; however, they outpaced the
2.5% rise in the Consumer Price Index (CPI) over the preceding 12 months (Cage,
1994). Tuition rates for 1994 at public four-year colleges and universities increased
6% over the preceding year. The Increase outpaced inﬂation as measured by the
CPI of 2.9%. ”The good news is that the rate of increases has continued to lessen,”
said James B. Appleberry, President of the American Association of State Colleges
and Universities. ”The bad news is that any increase in tuition limits access, and the
impact is differentially hurtful for the economically disadvantaged, minorities. and
recent immigrants” (quoted in Evangelauf, 1994, p. A41). At the same time, grant
aid has not kept up with rising tuition rates (Knapp, 1992). The reliance on student
loans and ﬁnancial aid packaging shortages are being absorbed by the institution.
For many colleges and universities, student receivable balances, especially for
undergraduate accounts, are rising, becoming aged, and proving increasingly
difﬁcult to collect (Jacquin 8 Goyal, 1995). As a result, the student bad-debt

exposure of colleges and universities is increasing.

51W
Until recently, colleges and universities have been among the few institutions
that have not experienced problems with bad debts. The reasons for not
experiencing such difficulty in the past are that costs were much lower, grant aid
would cover the cost of tuition. and other ﬁnancial aid would cover the cost of room
and board. However, as the funding gap continues to widen, institutions’ exposure

to debts also should be expected to increase. Further compounding the problem is

3

the fact that institutions of higher education are under pressure to diversify the mix
of students they recruit, to include high-risk students (Hodgkinson, 1986).

At Ferris State University (FSU), the student account receivable balances
have been increasing. Asthese balances have increased, the total debt experience
(the amount of money that is not collected for university charges) has also been
increasing annually. The university has always had some bad debts, but due to the
funding gap the amount has been increasing to the point of becoming a ﬁnancial
problem. To account for the increase, the university records a reserve for bad debts
in the audited annual ﬁnancial statements. The university reserve for debts has
been increasing annually as follows: 1991—$236,000, 1992-$352,000. 1993—
$320,000, and 1994-$617,000. The slight reduction in 1993 was due to an
accounting change when the university charged from quarters to semesters.
University management has not thoroughly examined the problem, and such an

investigation is timely and necessary.

WM

Higher education institutions will be facing many problems in the future. Two
of the major problems will be inadequate ﬁnances and maintaining student
enrollment. In a recent study by the American Council on Education (EI-Khawas,
1994), 53% of the respondents to a national survey believed institutions will not have
adequate ﬁnances, and 30% believed institutions will have difﬁculty maintaining
enrollment. At the same time, 87% of public institutions indicated an increased

reliance on tuition revenues to balance the budget. Also, 87% of the respondents

4
indicated that increasing amounts of institutional funds are being diverted for student
ﬁnancial aid.

Congress is considering major changes to the federal student-aid programs.
If the changes are approved, the result could be the largest increase in the cost of
college in the nation’s history. Students depend heavily on student aid. The federal
government will make available approximately $33 billion for low-income and middle-
income students during the 1994/95 academic year. About one-half of all students
receive some form of federal student aid. Any changes in the federal student loan
program may drive away many low-income students, minorities, and those who are
culturally averse to debt (Hartle, 1995).

FSU has experienced ﬁnancial problems and an enrollment decline. The
ﬁnancial problems have been addressed with a ﬁscal restructuring plan. The original
restructuring proposal was dated September 30, 1993. The ﬁscal restructuring
proposal called for a reduction of $7.9 million ($5.9 million base salary plus $2 million
beneﬁts) to the base budget. The proposal was driven by projections of future
budget problems caused by declining enrollment, limited state appropriations, salary
adjustments to base over previous years, and retirement cost estimates (Sederburg,
1994).

FSU expected continued budget difﬁculty based on expected enrollment on-
campus for Fall 1995 of 8,640, down from 9,182 for the Fall 1994 semester. The

expectation of conservative politics in Lansing will not change; therefore, no major

5
changes are expected in state appropriations. The current market will not tolerate
tuition increases much beyond an inﬂationary increase.

Accordingly, the statistical proﬁle of the 1994/95 freshman class showed 29%
of the respondents indicated low tuition as a very important reason for selecting a
college (American Council on Education, 1995). In the same study, 29.6% of the
respondents said they chose a college based on the amount ofﬁnancial aid offered.
Only 29.9% of the students indicated they had no concem about the ﬁnancing of
their college costs.

State of Michigan Public Act 7 of 1995 created an income tax credit for
college tuition and uniformly applied fees paid on behalf of a student or the taxpayer
beginning in tax year 1995. To claim the credit, a taxpayer must be a resident of
Michigan, have a household income of no more than $200,000. and the student
must attend a Michigan higher education institution that claims tuition will not
increase in the ensuing academic year more than the preceding year’s rate of

inﬂation. This act will force the Michigan higher education community to limit tuition
f increases, but it will not guarantee adjustments in state appropriations to the rate of
inﬂation or make changes in funding formulas. The Board of Trustees at FSU voted
to approve a tuition rate increase of 3.5% for the 1996 academic year. The rate of
increase, which is above the United States Department of Labor CPI, will not allow

FSU students to receive a tax credit for tuition paid.

6 .

State of Michigan appropriations are not keeping up with the CPI. The State
of Michigan is also requiring institutions to pick up costs of retirement beneﬁts,
which, In the past, were paid by the state.

During the past ﬁve years, costs have been increasing, family income of FSU
students has been decreasing, grant funding has remained the same, loan dollars
have been increasing, institutional aid has only been keeping pace with tuition
increases, state appropriations have not been keeping up with inﬂation, and
enrollment has been declining. All of these factors have an effect on the university’s
debt picture. As costs increase, fewer students will be able to afford a higher
education. This situation is of particular concern to a residential campus such as
FSU because the majority of students do not come from a commuting distance. Not
only will tuition revenues be affected, but auxiliary funds will be experiencing difﬁcult
times.

The reduction of family income will make it more difﬁcult for students to
receive additional resources necessary to pay for all costs of higher education.
Grant funding has remained the same and is not expected to increase. Students
must increase their loan debt to cover educational costs. Students are now leaving
the institution not only with loan debt primarily from the federal Stafford loan program
sources, but also with a balance due on their university student account receivable.
This student account receivable balance was reviewed by the researcher.

As students begin to default on their federal loans, the calculated default rates

need to be monitored. If the default rates increase above the federal mandates,

7
future participation could be reduced or eliminated. FSU has not experienced high

default rates but is aware of the implications of increasing default rates.

Wild!

The researchers primary purpose in this study was to compare freshman
students identiﬁed as debtors with the nondebtors of the FSU student body to
determine whether any differences existed between the two groups in terms of
admission, ﬁnancial aid, academic success, and student demographic variables.
Students considered in the study were freshmen who owed the university more than
$150 or more at the end of the Fall 1991, 1992, and 1993 terms. The student
debtors were those students whose account receivable balance continued to equal
$150 or more at the end of the following term. If the student account receivable
balance was reduced below $150, the student was not considered a debtor for
purposes of this study. The researcher believed that if the debt was not paid during
the following term, the student debt had a high probability of becoming a bad debt
and future write-off of the student account receivable.

The researcher investigated the relationship of selected student-borrower
characteristics to the propensity to become a debtor. Those characteristics were
analyzed using the full population to determine whether any differences existed in
the characteristics of the debtor when compared to the nondebtor. The differences

were used to predict future debtors from nondebtors based on the characteristics

studied.

8
lmpcdancecttheﬁtudx

FSU has not addressed the problem of student debts, primarily because of
the limited number of debtors historimlly and the relatively low dollar amounts
involved. However, an increasing need has arisen for universities to address the
problem of increasing student account receivable debts, due primarily to increasing
charges for costs of university attendance. However, as costs have been increasing,
grant funding and family income have not increased to ﬁll the gap. The gap is then
being absorbed by students assuming larger loan debts or leaving the university with
an account receivable balance due, and in many cases, both.

The researcher found a limited amount written on the issue of debts for
institutions of higher education. However, debts are a part of doing business for
these institutions. as they are for most other businesses. Management needs to
understand the student account receivable debt relationship that is evolving.

The study was limited to the freshman class because they are the largest
class. Freshmen are also at greatest risk of becoming debtors due to dollar limits
placed on borrowing funds and a delay in disbursing federal loan funds.

Students who successfully complete their freshman year increase their
chances of completing their course of study and are eligible for additional loan
dollars for future years. In an effort to collect student accounts more effectively, FSU
established a policy of not releasing transcripts to students who have an outstanding

account receivable balance. This policy has proven to be very successful in

9

collecting student account receivable balances, particularly long term, when students
need a transcript for career placement or to attend another college.

Another policy the university follows is not allowing students to register for a
future term ifthey have an account receivable balance of more than $150. This was
the reason for selecting $150 as a cutoff to identify debtors from nondebtors. This
policy has had the effect of limiting the write-off to one term of charges. This amount
was increased by 50% beginning in the Fall 1993 term, when the university changed
from quarters to semesters.

The results of the study will be useful to university management in
determining whether any ﬁndings can predict a debtor in contrast to a nondebtor.
The results also should enable FSU management to understand the risk levels
associated with particular student characteristics, and perhaps to approach the
account receivable debt expense as ﬁnancial aid rather than debt per se. Higher
education costs cannot become so expensive that students will be forced to assume
more debt to pay their educational expenses. Because grant dollars are not keeping
pace with rising costs, loan value is increasing signiﬁcantly. With the Federal Direct
Stafford Loan Program. repayments may be made over 30 years. This could be a
lifetime of payments for a student’s college education. Administrators must look for
alternatives to increasing the grant aid available to keep student debt to a minimum.
The student account receivable debt is not dischargeable under the federal
bankruptcy code, leaving some students no bankruptcy relief unless ﬁnancial

hardship can be established.

10

Because of increasing costs of college and university operations, the
continuing erosion of student ﬁnancial aid from public and private sources, and the
expanding competition for students, a marketplace has been created in which need-
conscious practices may have to be considered, awarding to the National
Association of College Admission Counselors (1994). Although in violation of
principles. schools must seize one of the few opportunities to be able to ensure that
a portion of their student body is paying for all costs, based on the students' ability

to pay, rather than academic or personal criteria.
The National Association of College Admission Counselors (NACAC) issued
n- ° ' ._ ‘II‘I . ' 'i '. - . no ' .01“ . -o.- son on .u
Eminent. The principles were developed by the NACAC collaboratively with the
American Association of Collegiate Registrars and Admissions Ofﬁcers (AACRAO),
the College Board, and the National Association of Secondary School Principals
(NASSP). The statement has been endorsed by the American Council on Education
(ACE). The current Statement of Principles of Good Practice contains the following

sections:

ll.A.6 [College and University Members agree that they will:] Admit
candidates on the basis of academic and personal criteria rather than
ﬁnancial need. This provision shall not apply to foreign nationals ineligible for
federal student assistance.

IV.A.9 [College and University Members agree that they will:] Not use
ﬁnancial need as a consideration in selecting students. This provision shall

not apply to foreign nationals ineligible for federal student assistance.
(NACAC, 1994, p. 2)

11
Due to the changes expressed in the student characteristics and funding
patterns, a study of student debt must be conducted. In this study the researcher
sought to determine whether the admission, ﬁnancial aid, academic success, or
demographic variables can be used as predictors of students who may become

debtors.

Win05

The following research questions were posed to guide the collection of data
for this study:

1. Do freshman debtors differ from the balance of the FSU freshman
student body with regard to the following admission variables: (a) application date
and (b) college in which they are enrolled?

2. Do freshman debtors differ from the balance of the FSU freshman
student body with regard to the following ﬁnancial aid variables: (a) ﬁnancial aid
need, (b) ﬁnancial aid awarded, (c) income, (d) cumulative loan debt, (e) ﬁnancial aid
application date, and (f) number of siblings in college?

3. Do freshman debtors differ from the balance of the FSU freshman
student body with regard to the following academic-success variables: (a) grade
point average and (b) ACT composite test score?

4. Do freshman debtors differ from the balance of the FSU freshman
student body with regard to the following demographic variables: (a) ethnic origin,

(b) county of residence, (c) age, (d) gender, (e) marital status, and (0 state residency

status?

12

D l' 'I Ii

This study was delimited in the following ways:

1. To include in the study population only those freshman students who
were enrolled at FSU during the Fall 1991, 1992, and 1993 terms.

2. To examine total debts as they appear in the student accounts
receivable ﬁles at FSU.

3. To consider the ﬁnancial aid debts accumulated by the students as
they appear in the student information ﬁles at FSU.

4. To examine the admission, ﬁnancial aid, academic success, and

demographic variables.

I . 'l I'
The study was conducted in an educational environment, which imposed the
following restrictions:
1. Scarcity of institutional research on this topic.

2. Literature on student debt limited to debt as it relates to the ﬁnancial

aid loan programs.

D [j 'I' [I
The following terms are deﬁned in the context in which they are used in this

study:

13

W refers to the balance the student owes the university after
all payments have been applied to his or her account.

W includes tuition, fees, room and board, books and
supplies, and a personal allowance for living expenses.

Debtor refers to a student who owes a university account receivable of $150
or more at the end of the term. The letter 'D“ is used in the study to identify a
debtor.

Debts refer to money owed to the university for all charges not paid at the end
of the term. The student ﬁnancial aid loan balances are considered separate from
student account receivable balances.

Diversity of students includes ethnicity, age, and economic characteristics.

Downsizing refers to the reduction of the size of an organization.

W is the full award the student receives. The award could include
grants, loans, and employment. Funds for the awards come from federal, state,
institutional, and private sources.

Eastman is a student who has accumulated fewer than 30 semester or 45
quarter hours of credit.

Euﬂpayers are students who receive no scholarship or grant aid.

EulHimestudems are those who are enrolled for 12 or more credit hours per

term.

14

Eundjnggap is the difference between cost of attendance and the sum of
ﬁnancial aid, student contribution, and family contribution. The amount will be the
ﬁnancial shortfall the student will experience between cost and available resources.

Gapeingoccurs when an admitted student is awarded a ﬁnancial aid package
that meets less than his or her full demonstrated need.

W are students who are ﬁnancing their education with a high
reliance on student ﬁnancial aid loans.

Management refers to the administrators of the university who follow the
board policies.

Need;blin_d admission uses only academic and personal criteria in admission
practices.

Needﬁcnscious admissions are those that apply, or hold open the option of
applying, candidates' ﬁnancial need as a consideration in the admission of any
portion of the applicant pool.

Nendebtot is a student whose account with the university is less than $150.
The letters 'ND" identify nondebtors in the study.

Eaﬂztimeﬁmdem: are those enrolled for fewer than 12 credit hours per
quarter or semester.

Quartet is a session that is 10 weeks long. FSU was on the quarter system
before Fall 1993.

Bettenehing is the changing of the organizational structure of an entity, which

involves reducing the size of the organization to enhance efﬁciency.

15
Semestet is a session that is 15 weeks long. FSU has been on the semester
system since Fall 1993.
seurceeeﬁundjng include ﬁnancial aid awards, family contributions, and the
student’s personal resources. The student’s personal resources are derived from
savings and earned income.
Term is used to mean either a quarter or a semester system because the

study includes both systems.

D 'I' [II D' II'

Chapter I contained an introduction to the study, a statement of the problem,
background of the problem, purpose of the study, importance of the research, the
research questions posed in the study, delimitations and limitations of the research,
and deﬁnitions of key terms.

Literature relevant to the study is reviewed in Chapter II. Topics that are
discussed include the funding of higher education, ﬁnancial aid, enrollment, external
support of higher education, and state funding.

Chapter III contains an explanation of the methodology that was used in
carrying out the study. The study population is described, techniques that were used
in collecting the data are discussed, the research questions and hypotheses are
stated, and the data-analysis techniques that were employed in testing the

hypotheses are explained.

16

The results of the data analyses are presented in Chapter IV. Chapter V
contains a summary of the study, conclusions drawn from the study ﬁndings,

recommendations for practice, implications for future research, and reﬂections.

CHAPTER II

REVIEW OF THE LITERATURE

Intmducﬁnn

This chapter contains a review of the literature related to this study. The
writer’s purpose in this study was to determine whether freshman students who
owed university account receivable debts had any identiﬁable characteristics when
compared to nondebtors. The review of literature indicated that limited writings were
available that were directly related to students and their university debt. Literature
was available on the debts as they related to student ﬁnancial aid; however, that was
not a focus of the study.

The researcher reviewed the literature on topics including the funding of
higher education, ﬁnancial aid, enrollment, external support of higher education, and
state funding issues. In reviewing the literature on these topics, the focus was on
why the debt is increasing. The reasons are that the funding of higher education is
being reduced, ﬁnancial aid grant money is limited and loans are increasing,
enrollment is decreasing, external support is becoming more important, and state
funding is not increasing. It is for these reasons, either individually or collectively,

that higher education institutions are experiencing an increase in student debt. The

17

18
problems facing higher education that will lead to an increased risk of university

debts are also considered in this chapter.

II E II [II' I El I'
In the 1990s, colleges and universities have been experiencing much
uncertainty with regard to the future. Whereas expansion has been the buzzword
in higher education for the past 50 years, the current buzzwords are cost
containment and retrenching. However, with changes in the national economy,
increasing tuition rates, and a shrinking pool of 1 8 to 22 year olds, contraction is now
the order of the day. Both public and private colleges are retrenching in order to stay
aﬂoat. Cutbacks are causing alarm within the college community and frustration
among students, who believe that the schools will be unable to provide what the
marketing brochures and admissions counselors promised (Ostling, 1992).

The reality of higher education is that it is a business. It provides a service
and must lomte customers who are willing to purchase the service. The locating of
customers may take the admission process regionally, nationally, and/or
Internationally. With declining enrollments, colleges need customers to ﬁll their
classrooms. All of the customers qualify for some federal ﬁnancial aid, which keeps
colleges aﬂoat. Meanwhile, the ﬁnancial aid ofﬁcers do their best to get money from
the student and the student's family. The difference in the cost and family
contribution is the student’s need. It is the student need that is met with ﬁnancial aid,

including, in many cases, a large percentage with student loans (Chany, 1994).

19

According to chief business ofﬁcers, the major issues thatwill inﬂuence higher
education In the 1990s are market related. These include tuition pricing, availability
and types of ﬁnancial aid programs, and local and regional demographics (Forbes,
1990). Tuition policy and ﬁnancing continue to head the list of concerns of higher
education leaders (Johnson, 1994).

Many academic leaders perceive that the major challenge for institutions will
include trade-offs between students’ access to higher education and academic
quality. One or both of these items are likely to suffer because neither state
appropriations nor tuition rates will increase enough to ﬁnance them both, at least
at previous levels (Jacobson, 1991 ). In the 1992-93 academic year, tuition at public
colleges and universities rose at double-digit rates, increasing three times the rate
of inﬂation. This followed a double-digit increase forthe 1991-92 academic year, the
ﬁrst increase of this magnitude since the 1983-84 academic year (Evangelauf,
1992).

During the ten-year period ending June 30, 1993, tuition prices more than
doubled. The average annual rate was about 8.5%, compared to the CPI of 3.8%.
Another factor contributing to student debt is the complexity of the ﬁnancial aid
process (Jacquin, 1995).

For colleges and universities to raise tuition and fees at a rate faster than
family incomes are growing is self-defeating. When tuition and fees are increased,

colleges are forced to divert into ﬁnancial aid some of the revenue they might

20
othenrvise spend on programs. and the number of students who can afford to attend

college is reduced (Dunn, 1993).

E' 'IE'I'II'I El I'

The importance to a college or university of being able to offer students a
good ﬁnancial aid package cannot be underestimated. Because recruiting is the
lifeblood of the institution, a plan for using ﬁnancial aid to create an optimal mix of
students is necessary for achieving the institution's overall recruitment goals. A
problem is that most constituencies of higher education institutions have different
views of ﬁnancial aid. Students see it as a reduction of expenses, faculty see it as
a method of recruiting better students, and admissions ofﬁcers see it as a way to
achieve enrollment goals (Hoke, 1993).

The four major trends in the ﬁnancing of higher education are of concern to
universities. First, the amount of student borrowing has exploded in the last ﬁve
years. During the 1990 ﬁscal year, students and parents borrowed $12.3 billion.
That amount increased to $23.9 billion in ﬁscal 1994. Second, colleges are
spending a larger portion of their resources on student aid. The institutional dollars
are used to attract students the college wishes to enroll. The institutional dollars
grew from $4 billion in ﬁscal 1989 to $8 billion in ﬁscal 1994. Third, congress ls
proposing the sharp reduction of federal ﬁnancial aid. The House Budget Committee
has proposed eliminating in-school interest subsidies on the federal loan programs
and eliminating all campus-based aid programs. The changes would reduce student

aid by about $20 billion over ﬁve years. Fourth, cuts in federal student aid will affect

21
the students and the campus. Universities would be forced to make up the cuts from
other sources or be prepared to lower enrollments (Hartle, 1995).

These trends have been making and will continue to make it difﬁcult for
students to afford a higher education. Universities need to deﬁne a ﬁnancing model
they will need to follow to be successful and adapt to the changing market
conditions.

The relationship between the need-blind admissions philosophy and the
institutions’ ﬁnancial aid policies are in conﬂict. The ﬁnancial aid dollars available at
most universities are not adequate to fully meet the needs of all students admitted.
When institutions claim to be need-blind, they typically ignore the ﬁnancial need of
the students they admit. Because universities cannot provide all the ﬁnancial aid
needed for the students they admit, a ﬁnancial shortfall is created for the students
and the university. The ways of meeting need have varied across and within
universities. One university may offer a loan in the student's ﬁnancial aid package
that is signiﬁcantly different from that of another student. These differences in
packaging have a different effect on two students. The difﬁculty is that the weakest
students, those with the least chance of completing their studies, end up with the
most loans and work in their award package. Some universities calculate the
student’s ability to pay using different rules. The lack of ﬁnancial aid funding creates
a situation that forces students to borrow money and work to attend the university

(McPherson, 1993).

22

In a study by the American Council of Education, 70% of the 1991
respondents indicated loans were essential for their enrollment in college. In that
study it was also found that the student loan debt increased by 50% between 1985
and 1991 and that the average loan repayment as a percentage ofincome increased
from 5.4% to 6.3% for undergraduates (Boyd, 1993).

Even with colleges’ and universities’ limited resources, ﬁnancial aid will
receive a share of the institutional budget. But what proportion of the budget should
be allocated to ﬁnancial aid? Many colleges are having difﬁculty determining what
the proportion should be. With the reduction in federal grant dollars, schools have
raised institutional levels of support and increased the use of loan money to ﬁll gaps
in the grant program. Institutional costs have increased due to increases in salaries
and institutional ﬁnancial aid funding. To compensate for these increases in
expenditures, tuition has been increased along with aid levels, and the proportion of
students receiving ﬁnancial aid also has increased. Fewer students are "full payers,“
and many of the students who are full payers are heavy borrowers (Dickmeyer,
1993)

If the United States is to remain a world economic and political leader,
management of educational institutions must look to the changing population from
which the leaders of tomorrow will emerge. More than 30% of the population are
from minority groups or are recent immigrants to the United States; they must not be

relegated to second-class citizenship. Campbell and Campbell (1990) believed that

23
the federal government should increase ﬁnancial aid to allow all citizens the

opportunity to receive higher education.

E II I' III El I'
America’s higher education system is experiencing a cultural revolution.
According to Hughes (1991), the next ten years will see:
1. a continued reduction in the traditional 18- to 24-year-old population

attending college.

2. the increased participation of women, ethnic and racial minorities, and

foreign students in education.

3. the increased participation of individuals over age 35, including
retirees, in education.

4. continued, striking shifts in state and regional populations.

Coincidental with these demographic shifts is America’s transition from an
industrial to an information/service-based economy. This transition has resulted in:

1. an increased demand for workers to attain higher levels of education.

2. major dislocations of the workforce due to ”downsizing,” 'rightsizing,‘

and emergence of a ﬂat network of organizations.

3. increased mobility of the workforce and multiple career changes.
4. ﬁerce international competition for market share and productivity gains.
5. advances in technology and communication, and a change in the

concepts of work and education.

24

Higher education institutions are coming under increased scrutiny to help
create a workforce that will make the nation’s economy more competitive
internationally (Hughes, 1991).

According to Clark Kerr (cited in Hughes, 1991), President emeritus of the
University of California, ”The push by national economic and political leaders for
higher education to make a greater contribution to US. industrial competitiveness
will also intensify, leading to more and better skills training and more and better
research, particularly in applied areas” (p. 14). The workforce and demographic
trends are causing a paradigm shift in higher education, from a historic identity as
a provider of discrete learning experiences for young people, to a new identity as a
provider of lifelong education to adults who are engaged in the workplace.
Attendance at higher education institutions is changing from full time to part time;
such attendance often is Intermittent, continuing throughout most of one’s life
(Hughes, 1991).

Maintaining student enrollments has become a vital concern for most
institutions of higher education because budgets now depend on enrollments
(Hossler, 1985). Demographic trends before the end of the twentieth century will
force higher education institutions to change how enrollment is maintained in light
of these changes. Some of the changes facing these institutions are as follows:
Students’ standardized test scores will be declining, diverse types of learners will be
looking beyond community colleges for education, students’ ability to pay will

increasingly decline, the cost of a college degree will rise faster than that of any

25
comparable service, and differences in the preparedness of incoming freshmen will
be signiﬁcant (Hodgkinson, 1986).

Each year, the decline in the number of high school graduates has been one
of the most frequently discussed topics in the ﬁeld of higher education. The
decrease has made administrators nervous because of lost revenue and jobs. The
same administrators were looking ahead to 1994, the year in which the high school
decline was expected to reverse itself. However, this change will not make it easier
to recruit students; in fact, through the end of the decade and beyond. the higher
education marketplace will become even more competitive. The national picture will
experience a change in demographics. Proportions of ethnic and racial minorities
will change, as will the geographic distribution of the high-school-age population
(Seiver, 1992).

When pursuing academically talented high school students, college recruiters
should be aware that these students are more sophisticated about ﬁnancial issues
in choosing a college than are many students of lower academic ability (Tierney,
1983). This factor, too, will inﬂuence enrollment in institutions of higher education.

A small number of institutions can afford need-blind admissions. In a survey
conducted by the National Association of College Admission Counselors (1994), 9%
of the respondents indicated they were not 100% need-blind before May 1.
However, the number increased to 14% following May 1. The signiﬁcance is that
some schools were following a need-conscious admission practice, which was

against their own accepted principles.

26
ExtemaLSunmchtligheLEdumtiQn

External support has become an important source of funding for colleges and
universities. Gifts to schools, colleges, and other educational entities increased 4%,
to about $2.43 billion from 1990 to 1991, according to a report entitled ”Corporate
Support of Edumtion, 1991" (Blumenstyk, 1992). Gifts of money are the most
welcomed by college development ofﬁcers. Cash is what colleges and universities
need most, and when gifts are of an unusual nature, institution personnel must
decide whether to sell the gift, ﬁnd a creative use for it, or reject it outright and risk
offending the donor (Lieb, 1992). I

Public institutions have started to solicit gifts from community members and
alumni and to conduct large capital campaigns because states cannot provide
enough money to fuel the growth that colleges have deemed necessary. In general,
public colleges and universities have been successful in terms of private fundraising.
However, many public college ofﬁcials worry that the state legislators may decide
that institutions attracting large gifts do not need as much state money as in the past
(Nicklin, 1992).

Corporations are looking for a return from the colleges and universities to
which they make donations. At times, restrictions are placed on the gifts. This
burgeoning privatization or reliance on nonstate funds is creating haves and have-
nots among the nation’s universities. The haves are the areas of campus in the best
position to receive support from businesses or alumni. Another problem with many

gifts has been that the expenditures are designated, not by administrators but by the

27

outside sponsor or donor (Yudof, 1992). Conversely, beneﬁts of cooperation are
necessary between higher education and industry. With the transition from a
technology-oriented economy to an information/service economy, such cooperation
is very important (Powers, 1988).

Many college and university fund-raisers understand that women represent
a virtually untapped donor market. Fund-raisers are now paying much closer
attention to the views of alumnae concerning their alma maters (McMillen, 1992).

Many institutions resent the mega-campaigns for donor support waged by
prestigious institutions. However, in many instances, these multi-million-dollar

capital campaigns have been very successful in raising money (Gearhart, 1991).

Eli E I' [III El I'

Budget cuts have stripped colleges and universities of needed funds. The
recession is partly to blame for this situation. The states, whose own tax revenues
have declined, are unable to make up for the federal cutbacks. In amdemic year
1991-92, for the ﬁrst time in the 33 years of the Chambers survey, state support for
higher education declined. Thirteen states, including seven of the largest, reported
declines over the preceding two years. In many states, faculties and course
offerings have been cut. Everywhere, tuition has jumped while salaries have
remained constant (Clayton, 1992).

More state resources are now being shifted to build prisons, provide health
care, and ﬁnance other endeavors, leaving less money for colleges and universities.

As a result, these institutions have had to increase tuition in order to balance their

28
budgets without mass ﬁrings and program cuts. A college or university must realize
that it cannot maintain low tuition while receiving low state support and still maintain
a quality program (Mercer, 1993).

State legislators have been discussing proposals to abandon the traditional
model of low public college tuition maintained by state appropriations in favor of so-
called ”high tuition/high ﬁnancial aid" plans. The theory is that state legislatures can
cut support to higher education and colleges and universities need to raise tuition;
revenue from higher tuition would be used to provide more aid to students who are
unable to pay the increased costs. However, not enough affluent students are
available to support the large number of low-income students (Lopez, 1993).

State of Michigan Public Act 7 of 1995 creates an income tax credit for
college tuition and uniformly applied fees paid on behalf of a student or a taxpayer
beginning in tax year 1995. This act will force the Michigan higher education
community to limit tuition increases. Michigan State University announced in
January 1995 that tuition increases over the next four years would be held to the rate
of inﬂation, but only if the state appropriations rise by at least the same rate.
Although state ofﬁcials have hailed Michigan State University’s promise to limit
costs, some legislators said they were reluctant to make a similar guarantee. The
board of trustees at FSU voted to approve a tuition-rate increase of 3.5% for the
1995/96 academic year. That rate of increase is above the United States
Department of Labor CPI. Due to the size of the increase, FSU students will not

receive a tax credit for the tuition they paid for the 1995/96 academic year. This type

29
of situation does not work to FSU’s advantage when a student is shopping for a

state-funded university to attend.

CHAPTER III
METHODOLOGY

Intteductign

The researcher’s primary purpose in this study was to compare students
identiﬁed as debtors with the nondebtors of the FSU student body to determine
whether any differences existed between the two groups in terms of admission,
ﬁnancial aid, academic success, and demographic variables. Students considered
to be debtors were those who were enrolled in the Fall 1991, 1992, and 1993 terms.
The population studied included only freshman students. The freshman students
were divided into two groups. One group included students who had a student
account receivable of $150 or more, and the other group included students who
owed nothing or less than $150. The researcher chose $150 because FSU uses this
dollar amount to stop students from registering for future terms. Therefore, this is
the maximum amount of debt a student could owe the university and continue
enrollment.

Once the debtor was identiﬁed, the debtor’s record was reviewed at the end
of the Winter term to determine whether the student owed $150 or more. If the
debtor had reduced the debt below $150, he or she was considered a nondebtor.

This step was necessary because students may pay their balances before Winter

30

31
term classes begin, and they would not be candidates to become debtors. The
study was conducted to determine whether recent debtors from FSU had certain
characteristics that could be considered by FSU management to identify future
student characteristics that increase the potential for becoming debtors. The
identiﬁcation of variables that might be related to bad debts is considered a
descriptive study (McMillan 8 Schumacher, 1989). Because the study contained all
freshman students from the respective Fall terms under investigation, no inferential

statistics were used.

mm
The study population consisted of all freshman students who were enrolled
in credit-producing classes during the Fall 1991, 1992, and 1993 terms. The
population was divided into two groups: (a) those freshman students who continued
to owe the university $150 or more at the end of the term following Fall were called
debtors, and (b) the balance of the FSU freshman student body were referred to as
nondebtors. Selection of a sample was not necessary because all freshman

students who were enrolled for their respective Fall term were included in the study.

DataCcllection
Data were extracted from the FSU Student lnforrnation System database,
using the university’s mainframe computer, and down-loaded to a microcomputer
ﬁle. A debtor ﬁle was generated, using a data-query program. Every freshman

student who was enrolled during the Fall 1991, 1992, and 1993 terms was in either

32

the nondebtor or debtor group. The researcher did not contact students in any way
to collect additional information because all of the information required for the study
was included in the FSU database. All variables studied had some missing data;
however, no variable had more than 5% missing data. The missing data were, in all
cases. caused by the ﬁeld not having data or the observed variable having some

irrelevant information for analysis.

Beseamhﬂuesticnsaniljmneses

The following research questions were posed to guide the collection of data
for this study:

Besearengueetienj: Do freshman debtors differ from the balance of the
FSU freshman student body with regard to the following admission variables: (a)
application date and (b) college in which they are enrolled?

mm: Do freshman debtors differ from the balance of the
FSU freshman student body with regard to the following ﬁnancial aid variables: (a)
ﬁnancial aid need, (b) ﬁnancial aid awarded, (c) income, (d) cumulative loan debt,
(e) ﬁnancial aid application date. and (f) number of siblings in college?

ﬁeseammueeﬁenj: Do freshman debtors differ from the balance of the
FSU freshman student body with regard to the following academic-success
variables: (a) grade point average and (b) ACT composite test score?

Reeearehﬁuestienﬁz Do freshman debtors differ from the balance of the

FSU freshman student body with regard to the following demographic variables: (a)

33
ethnic origin, (b) county of residence, (c) age, (d) gender, (e) marital status, and (I)

state residency status?

The null hypotheses that were formulated to answer each research question

are as follows:

Hypetheeiet: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to the following admission variables: (a)
application date and (b) college in which they are enrolled.

HypmheeisJa: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to application date.

Hypgthesisje: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to college in which they
are enrolled.

Hypctneeiez: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to the following ﬁnancial aid variables: (a)
ﬁnancial aid need, (b) ﬁnancial aid awarded, (c) family income, (d) cumulative

loan amount, (e) ﬁnancial aid application date, and (f) number of siblings in
college.

HypetheeisJa: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to ﬁnancial aid need.

Hypothesisibz Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to ﬁnancial aid awarded.

WM: Freshman debtors do not differ from the balance of the
FSU freshman student body with regard to family income.

Hypethesieztiz Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to cumulative loan debt.

HypothesieZe: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to ﬁnancial aid application
date.

Hypethesier: Freshman debtors do not differ from the balance of the
FSU freshman student body with regard to number of siblings in
college.

34
timeliness}: Freshman debtors do not differ from the balance of the FSU

freshman student body with regard to the following academic-success
variables: (a) grade point average and (b) ACT composite test score.

ﬁypgthesjsja: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to grade point average.

' : Freshman debtors do not differ from the balance of

the FSU freshman student body with regard to ACT composite test
score.

HypethesjsA: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to the following demographic variables:

(a) ethnic origin, (b) county of residence, (0) age, (d) gender, (e) marital
status, and (f) state residency status.

Hypothesisﬁa: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to ethnic origin.

5mm: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to county of residence.

Hypethesisﬁe: Freshman debtors do not differ from the balance ofthe
FSU freshman student body with regard to age.

Hypetheeieﬁd: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to gender.

HypethesisAe: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to marital status.

ﬁypetnesjsgt: Freshman debtors do not differ from the balance of the
FSU freshman student body with regard to state residency status.
D I E . | g I .
The data for each hypothesis were analyzed using the Statistical Package for
the Social Sciences (S PSS) statistical program. Two methods, chi-sq ua re and t-test,
were used in analyzing the data. According to McMillan and Schumacher (1989),

the chi-square statistic is used “when the data are in nominal form. The test is a

35

means of answering questions about association or relationship based on

frequencies of observations in categories" (p. 369). The authors said that the t-test

is used to compare two means and “to determine the probability level (p level) of

rejecting the null hypothesis” (p. 355). The methods that were employed in testing

speciﬁc hypotheses are as follows:

Hypothesis 1a (application date):
Hypothesis 1b (college in which enrolled)

Hypothesis 2a (ﬁnancial aid need):
Hypothesis 2b (ﬁnancial aid awarded):
Hypothesis 2c (family income):

Hypothesis 2d (cumulative loan debt):
Hypothesis 2e (ﬁnancial aid application date):
Hypothesis 2f (number of siblings in college):

Hypothesis 3a (grade point average):
Hypothesis 3b (ACT composite score):

Hypothesis 4a (ethnic origin)
Hypothesis 4b (county of residence):
Hypothesis 4c (age):

Hypothesis 4d (gender):

Hypothesis 4e (marital status):
Hypothesis 4f (state residency status):

Results of the data analyses are reported in Chapter IV.

chi-square
chi-square

t-test
t-test
t-test
t-test
t-test
t-test

t-test
t-test

chi-square
chi-square

t-test
chi-square
chi-square
chi-square

CHAPTER IV

RESULTS OF THE DATA ANALYSIS

InILQduQIiQn

The researcher’s purpose in this study was to investigate the relationship of
selected student characteristics to the propensity to become a debtor. Those
characteristics were analyzed using the full freshman population at FSU to
determine whether any differences existed in the characteristics of the nondebtor
when compared to the debtor.

The student characteristics were studied over a three-year period for the Fall
1991, 1992, and 1993 terms. Because the full freshman population was used in the
study, no inferences were made about what the selected characteristics may reveal
for the population based on a sample. However, statistical techniques were used
to analyze the data, and those techniques were used to answer the research

quesﬁons.

W

The FSU freshman population declined over the three years of the study. The
number of freshman student debtors, by year, is shown in Table 1. The number of
freshman students who were considered debtors increased at a time when the total
number of freshman students declined. The average debt increased over the three

years of the study.

36

37

Table 1: Summary of freshman debt ﬁgures by term.

 

 

 

 

 

 

 

 

 

 

 

 

Term Average Maximum Number of Students Total
Debt Debt ND D Debt
Fall 1991 $ 639 $2,413 4,610 144 $ 92,003
Fall 1992 $ 767 $3,371 4,271 210 $161,039
Fall 1993 $1,201 $4,314 3,984 307 $368,582
CostcLAttendance

During the same three-year period. costs increased at a rate faster than the

CPI. The cumulative increase for tuition and housing from Fall 1991 to Fall 1993

was 29.15%. compared to 11.7% for the CPI. A comparison of the costs. broken

down by tuition and housing, for a six-year period is shown in Table 2. The trend

has been for costs to increase higher than the CPI by more than a 2 to 1 ratio.

These increases should reﬂect a higher debt to FSU, particularly when the family

income of the average freshman has not kept pace with inﬂation.

Table 2: Cost of attendance and the CPI.

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year Ending June 30
1 989 1 990 1 991 1 992 1 993 1 994
Tuition' $2,223 $2,397 $2,565 $2,970 $3,222 $3,412
% increase 27.1 7.83 7.01 15.8 8.48 5.90
Housing-20 meal‘ $2,781 $3,018 $3,318 $3,707 $3,923 $4,171
% increase 17.9 8.52 9.94 11.7 5.83 6.32
Total costs' $5,004 $5,415 $5,883 $6,677 $7,145 $7,583
% increase 21.8 8.21 8.64 13.5 7.01 6.13
CPI 123.5 129.4 136.4 140.8 145.2 148.8
CPI % change/yr 4.7 4.8 5.4 3.2 3.1 2.5

 

 

‘For the academic year.

 

 

38
AverageEamiltdnmme

The average family income for the freshman students is summarized in Table
3. The average family income in the table came from the annual ACT freshman
proﬁle. The family income from 1989 to 1994 experienced a negative trend and
actually declined in current dollars. Family income declined when adjusted for
inﬂation as measured by the CPI. The decrease between 1989 and 1994. as
adjusted for the CPI, resulted in a loss of purchasing power of $6,846 for the
average FSU family. The increasing costs could not be absorbed by family
resources if the purchasing power of the family was experiencing such a reduction.
and at the same time. costs were increasing at a rate exceeding the CPI. The family
income used in the balance of the study will come from the university student
information system. The student information system ﬁgures do not come from the
ACT proﬁle but from the student ﬁnancial aid applications. The results will show a

lower average family income.

Table 3: Average freshman’s family income. and adjusted for the CPI.

 

 

 

 

 

 

 

 

 

 

 

Year
1989 1990 1991 1992 1993 1994
Fami'yimme $37,630 $38,117 $36,521 $36,642 $37,262 $37,080
(ACT)
Family income
a djust ed for CPI $37,630 $39,938 $40,336 $41,775 $43,633 $44,676

 

 

39
El BII'IIIB ID I'
Reseatcbﬁuesticn;
Do freshman debtors differ from the balance of the FSU freshman student
body with regard to the following admission variables: (3) application date

and (b) college in which they are enrolled?

Hypethesisje: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to application date.

Hypetheeisjb: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to college in which they are enrolled.

Amﬂcatjenjete. The application date was the only variable analyzed for
which data were not available for the freshman population for the three years under
investigation. The analysis was completed for the Fall 1993 term, but no analysis
was conducted for 1991 and 1992 because data were unavailable for those years.
FSU converted to an automated Student Information System in August 1993, and
the previous years' data were not converted. The researcher reviewed the hard
copy and determined that ﬁles were not available to conduct the research. either
manually or using a statistical sample.

The dates students applied to FSU are summarized in Table 4. The earliest
application date was September 1992. and the latest application date was
September 1993. From the table it can be determined that students who applied
from September 1992 to December 1992 were less likely to become debtors. The
cumulative difference in December showed that 21.6% of the debtors had made
application by the end of December, compared to 39% of the nondebtors. For

students who had not applied by April 1993, the difference became less signiﬁcant,

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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41
and in June, the two groups were not different. Approximately one-third of the Fall
1993 freshman class applied after April. This delay in applying makes planning
difﬁcult for both the student and the university. Therefore. application date is not a
factor in determining debtors from nondebtors.

WM. Table 5 contains a summary of nondebtors and
debtors by the college in which students were enrolled at the start of each of the
respective Fall terms. The College of Arts and Sciences had the highest proportion
of debtors to the school population of all seven colleges. The College of Arts and
Sciences has students who are given the opportunity to enter introductory programs.
After the students are successful in the introductory programs, they are allowed to
move into a designated major. Because of the FSU policy of admitting students and
giving them an opportunity, it was expected that the College of Arts and Sciences
would be the highest debtor college.

The Colleges of Allied Health Sciences, Optometry, and Pharmacy have
higher admissions criteria and do not typically have freshman students in their
programs. Therefore, they are not as susceptible to experiencing a high proportion
of the students being debtors. Hence, college in which the student is enrolled is not

a factor in determining debtors from nondebtors.

42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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43

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44
W
Do freshman debtors differ from the balance of the FSU freshman student
body with regard to the following ﬁnancial aid variables: (a) ﬁnancial aid

need, (b) ﬁnancial aid awarded, (c) income, (d) cumulative loan debt, (e)
ﬁnancial aid application date, and (f) number of siblings in college?

W: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to ﬁnancial aid need.

Hypothesiﬂb: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to ﬁnancial aid awarded.

Hypothesjizc: Freshman debtors do not differfrom the balance of the
FSU freshman student body with regard to family income.

11mm: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to cumulative loan debt.

W: Freshman debtors do not differ from the balance of
the FSU freshman student body with regard to ﬁnancial aid application
date.

BMW: Freshman debtors do not differ from the balance of the
FSU freshman student body with regard to number of siblings in
college.

W The ﬁnancial aid need of debtors and nondebtors is
included in Table 6. The debtors had a higher ﬁnancial aid need when compared
with the nondebtors. The average ﬁnancial aid need for the three years not only
increased annually, the gap of ﬁnancial aid need also increased annually, but the
gap of ﬁnancial aid need between nondebtors and debtors also grew. The average
difference between nondebtors and debtors in 1991 was $270. The following two
years it increased, by $1 , 107 in 1992 and $1,537 in 1993. The nondebtors were less
needy than the debtors. If the trend continues, the financial aid need will increase.

As the ﬁnancial aid need continues to increase and the supply of grant dollars does

45
not increase, the university should expect an increase in the annual amount of debt.
Based on the three years of this study. the trend is negative for the university ifthe
ﬁnancial aid need continues to increase for students. Hence, ﬁnancial aid need is

a factor in determining debtors from nondebtors.

Table 6: Financial aid need by nondebtors and debtors.

 

 

 

 

Term Number of Financial Aid Difference

Students Need

Fall 1991 Nondebtors 2,486 $3,961

Fall 1991 Debtors 122 $4.231 $ 270

Fall 1992 Nondebtors 2,377 $4,973

Fall 1992 Debtors 164 $6,080 $1,107

Fall 1993 Nondebtors 2,389 $5,687

Fall 1993 ' Debtors 262 $7.224 $1.537

 

 

 

 

 

 

Einangjabjdjrend. Total ﬁnancial aid has increased annually. The increases
for the six years from 1989 to 1994 were in the form of loans, primarily from federal
sources. The Pell Grant maximum awards for the same six years are summarized
in Table 7. No increase in the funding of the federal Pell Grant occurred, and at the
same time, costs increased signiﬁcantly. The percentage of loans to ﬁnancial aid
dollars increased from 38% to 56% in the six years studied. In 1989, tuition (Table
2) for the academic year was $2,223 and the maximum Pell Grant was $2,300
(Table 7). This was the last academic year the Pell Grant would pay for all of the

student’s tuition. In 1994, tuition was $3,412 (Table 2) and the maximum Pell Grant

46

was $2,300, for a difference of $1,112. This reduction of grant funding and the
increased reliance on debt will cause many students to leave higher education with
a signiﬁcant debt burden. The amount of debt a student could accumulate will be
signiﬁcant. The Stafford loan program in 1994 made up 91.74% of the loan volume

of $23,680,000. Fortunately, the program exists in order for students to secure

some of the funds necessary to pay for their college expenses.

Table 7: FSU ﬁnancial aid trends from 1989 to 1994.

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

1989/90 1990/91 1991/92 1992/93 1993/94 1994/95
Max. Pell Grant $ 2.300 $ 2.300 $ 2,400 $ 2,300 $ 2,300 $ 2,300
Total aid (000) $21,023 $21,482 $27,204 $32,574 $40,361 $42,630
°/o change N/A 2.18 26.63 19.74 23.90 5.62
Federal aid (000) $14,927 $15,903 $20,157 $24,099 $31,546 $33,378
State aid (000) $ 1.386 $ 1,723 $ 2,059 $ 3,483 $ 3.479 $ 3,186
Inst. aid (000) $ 4.260 $ 3.493 $ 4,536 $ 4,547 $ 4,994 $ 4,482
Private aid (000) $ 450 $ 363 $ 452 $ 455 $ 342 $ 1,565
Loans (000) $ 8,075 $ 8,964 $11,894 $15,119 $23,764 $23,680
% loans/FA 38.41 41.73 43.72 46.41 58.88 55.55
Stafford loans (000) $ 5,632 $ 6,228 $ 9,311 $12,716 $21,577 $21,724
°/o Stafford/loans 69.75 69.47 78.29 84.11 90.80 91.74

 

 

The increase in debt may have future ramiﬁcations to universities if the default
rate is above a federally mandated amount. Currently, FSU has not experienced a

default rate that would impair future funding of its federal ﬁnancial aid programs.

Warned. As shown in Table 6, the debtors were more needy
than the nondebtors. In Table 8, it can be seen that the actual aid awarded was
higher for the nondebtors than the debtors. The researcher determined that the
reason for higher awards was the larger loan volume assumed earlier in the
awarding process by the nondebtors. The amount awarded did increase annually
for both the nondebtors and the debtors; however, the difference was reduced from
$1,019 in 1991 to $464 in 1993. This reduction was due, in part, to larger loan

awards given sooner in the awarding process. Therefore, ﬁnancial aid awarded is

47

not a factor in determining debtors from nondebtors.

Table 8: Financial aid awarded to nondebtors and debtors.

 

 

 

 

 

 

 

 

Number of Ave. Financial .
Term Students Award Difference
Fall 1991 Nondebtors 2,483 $3,722
Fall1991 Debtors 122 $2,703 $1,019
Fall 1992 Nondebtors 2,377 $4,479
Fall 1992 Debtors 164 $3,364 $1,115
Fall 1993 Nondebtors 2,389 $5,108
Fall 1993 Debtors 262 $4,644 $ 464

 

Eamﬂyjngome. The next question to answer was whether any difference
existed in the family incomes of the nondebtors and the debtors. The average family
incomes of the nondebtors and debtors are summarized in Table 9. The researcher

determined that the nondebtors had a family income of $9,979 more than the

 

48

debtors in 1991. Although the difference was less in 1992 and 1993, it averaged
$8,437. The difference in family incomes of nondebtors and debtors was signiﬁcant
enough to determine that family income is an indicator of future debtors. The
average family income in Table 3 was higher because the ﬁgures came from the
ACT freshman proﬁle, which tabulates the family income of all families. The values
in Table 9 were from the FSU Student Information System and reﬂect ﬁgures for only
those students who applied for ﬁnancial aid. Therefore, family income is a factor in

determining debtors from nondebtors.

Table 9: Family income of nondebtors and debtors.

 

 

 

 

Number of Average .
Term Students Family Income Difference
Fall 1991 Nondebtors 2,808 $26,772
Fall 1991 Debtors 126 $16,792 $9,980
Fall 1992 Nondebtors 2,599 $25,630
Fall 1992 Debtors 174 $17,121 $8,509
Fall 1993 Nondebtors 2,489 $28,057
Fall 1993 Debtors 267 $19,691 $8,366

 

 

 

 

 

 

QummatM-ngan. As shown in Table 10, the cumulative loan for nondebtors
remained relatively constant, as compared with the debtors. The debtors
accumulated a larger loan debt as compared to the nondebtors. During the three
years of the study, the average loan of the debtors increased to $2,029. The

maximum loan a freshman can accumulate in the Federal Stafford Loan Program is

49

$2,625. If this trend continues, FSU will not be in a position to increase the debt
burden to cover the increased costs. Therefore, cumulative loan amount is not a

factor in determining debtors from nondebtors.

Table 10: Cumulative loans of nondebtors and debtors.

 

 

 

 

 

 

 

Number of Cumulative .

Term Students Loan Difference
Fall 1991 Nondebtors 4,465 $2,026

Fall1991 Debtors 144 $1,235 $791
Fall 1992 Nondebtors 4,061 $2,088

Fall 1992 Debtors 210 $1.155 $933
Fall 1993 Nondebtors 3,676 $1,922

Fall 1993 Debtors 307 $2,029 ($107)

 

 

 

W. The researcher reviewed the ﬁnancial aid
application dates to determine whether a difference existed between the nondebtors
and the debtors. The date used for this analysis was the date the student had
completed his or her ﬁnancial aid ﬁle. The student may have applied sooner, but
until all required documentation is available in the Financial Aid Ofﬁce, the student
will not receive a ﬁnancial aid award. The data on the ﬁnancial aid application date
were then converted to a percentage of the applications and summarized using a
cumulative total by month.

The results of the review of ﬁnancial aid application dates are shown in Table
11. The cumulative ﬁnancial aid application dates show that students who applied

for aid sooner were less likely to become debtors than were students who applied

50

later. This was not as good an indicator for students who applied after May. The
important realization is that the cut-off date for ﬁnancial aid applications to be
considered for the maximum ﬁnancial aid is April 1. After that date, there is no
guarantee that resources will be available for all students applying for ﬁnancial aid.
Once school was in session in September, the debtors and nondebtors applied for
ﬁnancial aid at about the same rate. Also important is the fact that 90% of the
freshman class applying for ﬁnancial aid did so through August. Therefore, ﬁnancial

aid application date is not a factor in determining debtors from nondebtors.

Table 11: Financial aid applications for nondebtors and debtors (cumulative %).

 

 

 

 

 

 

 

 

 

1991 1992 1993
Debtors Nondebtors Debtors Nondebtors Debtors Nondebtors

Jan. 0.0 1.0 1.3 1.5 1.3 0.5
Feb. 6.5 14.1 13.4 27.8 18.6 26.5
March 18.5 43.9 32.9 54.3 40.7 54.7
April 49.1 65.6 53.0 70.3 57.6 70.9
May 53.7 77.4 62.4 79.1 68.9 78.9
June 70.4 82.5 73.1 85.1 79.7 84.6
July 80.6 87.7 79.8 90.5 84.9 89.5
Aug. 87.1 91.3 85.8 94.6 90.5 93.4
Sept. 89.9 94.7 94.6 97.0 94.4 96.3
Oct. 97.3 96.5 96.7 98.1 96.1 97.7
Nov. 100.0 97.7 98.0 98.7 97.4 98.6
Dec. 100.0 98.4 98.0 99.1 98.7 . 99.2

1992 1993 1994
Jan. 100.0 99.0 98.0 99.3 100.0 99.7
Feb. 100.0 99.5 98.0 99.5 100.0 100.0
March 100.0 99.8 99.3 100.0 100.0 100.0
April 100.0 100.0 100.0 100.0 100.0 100.0

 

 

 

 

 

 

 

 

51

WW. Nondebtors and debtors also were compared
with regard to the number of siblings in college over the three-year range of the
study (see Table 12). The highest frequency of debtors were from families with one
other sibling in school. Having two or more siblings in college decreased the
chances of students becoming debtors. The proportion of debtors to the freshman
population remained constant among those with more than one sibling in college.
It also was found that students who had no other siblings in college were the least
likely to become debtors. Therefore, number of siblings in college is a factor in

determining debtors from nondebtors.

Besearchﬁuestim
Do freshman debtors differ from the balance of the FSU freshman student

body with regard to the following academic-success variables: (a) grade
point average and (b) ACT composite test score?

Hypmnesjsﬁa: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to grade point average.

Hypothesiﬂb: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to ACT composite test score.

W. The grade point averages were summarized by ranges
from lowest to highest. FSU is on a 4-point grading scale. The grade point
averages of nondebtors and debtors are summarized in Table 13. The students with
lower grade point averages had a higher proportion of debt than did students who
had higher grade point averages. During the Fall 1991 term, 45% of the freshmen
had grade point averages over 2.5. However, this same group had only 7.7% of the

debtors. This contrasted with the students with grade points below 1.5, who

52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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54
accounted for 12.5% of the freshman population but comprised 44.5% of the debtor
population. The group with grade points from 1.5 to 2.5 accounted for 42.5% of the
freshman population and 47.9% of the debtors.

The results were similar for 1992 and 1993. During Fall terms 1992 and
1993, the students with grade points over 2.5 comprised 43.9% and 42.9% of the
freshman population, respectively. However, the same group had only 12% and
7.8% of the debtors. respectively. This contrasted with the students with grade
points below 1.5, who accounted for 14.6% and 20.8% of the freshman population,
but accounted for 45.7% and 50.1% of the debtor population, respectively.

The trend for the freshman grade point below the 1.5 level has grown
annually. If that trend continues, poor performance as measured by the grade point
average could be used as a predictor of a student becoming a debtor. The grade
point used in this study was the cumulative grade point average at FSU-at the end
of the Fall 1991, 1992, and 1993 terms. The grade point average is not available
before a student completes a term of study. Therefore, grade point average is a
factor in determining debtors from nondebtors once the grade point average is
established.

W. The ACT composite test scores were examined
to determine whether any difference existed between nondebtors and debtors on this
measure. The ACT scores were taken from the results received by entering
freshmen from the American College Testing Program. At FSU, the results of the

ACT test are used for academic placement purposes only. The ACT composite test

55

scores within ranges are summarized in Table 14. An ACT score of "none" results
from the fact that not all students are required to submit test scores for admission.
Examples of students who are included in the 'none" category are part-time, off-
campus, graduate, transfer, and nontraditional students. The ”none” category has
increased annually because enrollment of the groups deﬁned above has been
increasing.

In the three years of the study, the ACT composite test scores of 16 or less
had a higher proportion of debtors to the freshman population than did scores of 17
or greater. The ACT composite test score was consistent over the ranges speciﬁed
in Table 14 when compared from year to year. The students in the higher ACT
composite test score ranges had a lower incident of debt as compared to students
who had a lower ACT composite test score, who had a higher incidence of debt.
Therefore, ACT composite test score is a factor in determining debtors from

nondebtors.

BeseamQuestionA

Do freshman debtors differ from the balance of the FSU freshman student
body with regard to the following demographic variables: (a) ethnic origin, (b)
county of residence, (c) age, (d) gender, (e) marital status, and (f) state
residency status?

9mm: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to ethnic origin.

Hypothesjsgb: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to county of residence.

W1 Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to age.

56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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58

ﬂypmnesisﬁd: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to gender.

W: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to marital status.

HypothesisAf. Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to state residency status.

W. The ethnic origin of nondebtors and debtors for the Fall 1991,
1992, and 1993 terms is shown in Table 15. Ethnic origin was broken down into ﬁve
categories: white, black, Hispanic, Native American, and Asian. The white category
was the major ethnic category at FSU, accounting for more than 80% of the
freshman student body. When the white students and black students in this study
were added together, they collectively accounted for about 96% of the freshman
student body. The results of the study indicated that the black ethnic group had the
highest proportion of debt to the freshman population. In 1991, the black ethnic
category accounted for 12.8% of the freshman population, but it accounted for
45.8% of the debtors. In 1992 and 1993, respectively, the black category accounted
for 16.4% and 15.4% of the freshman population and 57% and 57.7% of the debtors.
Ethnic origin, therefore, can be used as a predictor of a debtor.

W. In reviewing the county of residence, all residents of
Michigan were studied to determine whether any differences existed between
nondebtors and debtors. A summary of the ﬁndings may be found in Appendix A.
It was found that Wayne County did, in fact, show a signiﬁcant difference in the
debtor to freshman population percentage of the county. Wayne County had a ratio

of 11.5% of the freshman population and 28.7% of the debtors for 1991. The

59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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60
percentages for 1992 and 1993, respectively, were 14.2% and 13.9% of the
freshman population and 39.3% and 40.9% of the debtors.

In reviewing the FSU data for the 83 counties, it was found that ﬁve counties
accounted for about 44% of the freshman population. The counties were Genesee,
Kent, Mecosta, Oakland, and Wayne. FSU is located in Mecosta County. The ratios
for each county had a percentage of debtors to percentage of freshman population
that was close to being proportionally equal. The FSU student population mirrored
the state population, with at least one student from each county and the majority of
the freshman class coming from the larger urban areas. Only Wayne County could
be used in determining debtors from nondebtors.

Age. The ages of the nondebtors and debtors were examined to determine
whether a difference existed in the two groups (see Table 16). In the three years of
the study, the average age of debtors was about 1.5 years less than the age of
nondebtors. As FSU recruits more part-time students, the average age is
increasing. This trend can be seen in Table 16, which shows the average age of
students is rising. The results show that, annually, older students have a lower
probability of becoming debtors than do those who are younger. This could be
because the older student is more serious, better understands the ﬁnancial
commitment, attends college on a part-time basis, is employed, and/or may be

married. Therefore, age is not a factor in determining debtors from nondebtors.

61

Table 16: Average ages of nondebtors and debtors.

 

 

 

 

Term Number of Students Average Age
Fall 1991 Nondebtors 4,430 21.76
Fall 1991 Debtors 144 20.19
Fall 1992 Nondebtors 4,035 21.96
Fall 1992 Debtors 208 20.32
Fall 1993 Nondebtors 3,648 22.43
Fall 1993 Debtors 304 20.78

 

 

 

 

 

Gender. The researcher looked at the gender of the freshman class for the
Fall 1991, 1992, and 1993 terms to determine whether gender made a difference
when comparing nondebtors and debtors (see Table 17). Gender could not be used
to determine a difference between nondebtors and debtors. In the three years
studied, the proportions of nondebtors and debtors were almost equal when viewed
by gender. Therefore, gender is not a factor in determining debtors from
nondebtors.

Marjtaszatue. The marital status of the FSU freshman student body is shown
in Table 18. The results showed that married students were less likely to become
debtors than were single students. Single students made up the majority of the
freshman class, with 92.3%, 92.1%, and 94.4% of the freshman student body for the
Fall 1991, 1992, and 1993 terms, respectively. Therefore, marital status is not a
factor in determining debtors from nondebtors.

W. The researcher reviewed the residency status of the

freshman student body. Differences in residency between nondebtors and debtors

62

 

 

 

 

 

 

 

 

 

 

 

 

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64
are shown in Table 19. The researcher did not review the nonresidents to determine
where the students resided. The nonresident population included any students who
did not claim Michigan as their residence state. The nonresidents could be foreign
students or those from any state other than Michigan. The nonresident students
averaged about 5% of the freshman class and accounted for a smaller proportion of
the debt. Since nonresidents were not a signiﬁcant proportion of the freshman
population, it was difﬁcult to determine what risk should be assigned to the residency
category. What could be determined was that foreign students were at a reduced

risk of becoming debtors, as compared to Michigan residents.

E [El Bll'lllB ID I'
In summarizing the ﬁndings of the investigation of Research Question 1, the

following were observed:

Hypothesm: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to the following admission variables: (as)
application date and (b) college in which they are enrolled.

Hypothesisja: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to application date.

The hypothesis was rejected for students from Fall 1993, when reviewing the
cumulative percentages of application dates for nondebtors and debtors. The
application dates for Fall 1993 were shown in Table 4. The students who applied
from September to December 1992 had a smaller proportion of debtors than
nondebtors. The greatest difference occurred in December, with cumulative

applicants of 21 .6% of debtors and 39% of the nondebtors. The data supported the

65

 

 

 

 

 

 

 

 

 

 

 

 

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66
notion that earlier applicants are less likely to become debtors. For students who
had not applied by April 1993, the differencewas about equal, and the hypothesis
was not rejected for students who applied late. Approximately one-third of the

students applied after April.

1119910251210: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to college in which they are enrolled.

The hypothesis was rejected when looking at the College of Arts and
Sciences. The hypothesis was not rejected for the other six colleges at FSU. The
data for all colleges, as well as the reasons why the College of Arts and Sciences
would reject the null hypothesis, were summarized in Table 5. The most apparent
reason is that many students are admitted to the university before being accepted
into a designated major.

In summarizing the ﬁndings of the investigation of Research Question 2, the

following were observed:

Hypmnesiez Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to the following ﬁnancial aid variables: (a)
ﬁnancial aid need, (b) ﬁnancial aid awarded, (c) family income, (d) cumulative

loan amount, (e) ﬁnancial aid application date, and (f) number of siblings in
college.

mm: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to ﬁnancial aid need.

Hypothesis 2a was rejected because a difference did exist between the
ﬁnancial aid need for debtors and nondebtors. The data were summarized in Table
6. Although the difference in ﬁnancial aid need was $270 higher for debtors in 1991,

it grew to a difference of $1 ,537 in 1993. The ﬁnancial aid need of nondebtors in the

67

1991 to 1993 period grew by $1 ,726—to $5,687. For the same period, the ﬁnancial
aid need of debtors grew by $2,993-to $7,224. Therefore, a student with a higher
ﬁnancial need is more likely to become a debtor.

' : Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to ﬁnancial aid awarded.

Hypothesis 2b was rejected because debtors had less ﬁnancial aid awarded
than did nondebtors. The ﬁnancial aid awarded was summarized in Table 8. The
results indicate that many needy students do not accept loans but do accept grants.
Once these students are on campus and begin receiving their invoices, they realize
the need for additional resources and apply for loans at that time.

Hypothesieze: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to family income.

Hypothesis 20 was rejected. Debtors did differ from nondebtors in terms of
family income. As seen in Table 9, the trend was a reduction in the difference
between nondebtors and debtors. Nondebtors’ family income was $9,980, $8,509,
and $8,366 less than that of debtors in 1991, 1992, and 1993, respectively.

11362910221251: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to cumulative loan debt.

Hypothesis 2d was rejected. From the data in Table 10, it is apparent that a
difference did exist between nondebtors and debtors. However, the difference
declined from $791 to ($107), or a difference of $898 when comparing 1991 and
1993, respectively. The small difference in 1993 points to the fact that more
students were accepting loan awards earlier in their education than in previous

years. Debtors had cumulative debt of $1,235 in 1991, $1,155 in 1992, and $2,028

68

in 1993. Freshmen are allowed to borrow only $2,625 in Stafford Loan funds for the
academic year. As students approach the maximum loan amount, covering
increased costs with debt becomes more and more difﬁcult. This is critical to the
more needy students. At the time when the student borrows the maximum loan, the
university will see the student account receivable becoming uncollectable.

Hypothesieze: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to ﬁnancial aid application date.

Hypothesis 2e was rejected. Nondebtors were more likely to apply for
ﬁnancial aid earlier than debtors, as shown in Table 11. More than 90% of freshmen
applied for ﬁnancial aid by the beginning of the respective fall term. The trend over
the three years showed that debtors were applying earlier for ﬁnancial aid. This is
the result of a proactive effort by the ﬁnancial aid office to communicate better with
the freshmen and to monitor students’ ﬁnancial aid process. Students who apply by
the April 1 priority date have the opportunity to receive a better ﬁnancial aid package
than those who apply later. If the trend continues, the hypothesis could be retained.

ﬁypmneeiezf: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to number of siblings in college.

This hypothesis was rejected. The number of siblings did make a difference
in the amount of debt (see Table 12). Students who came to FSU with no other
siblings in college made up about half of the freshman class but comprised about
28% of the class debtors. Freshmen with one other sibling in college had the

highest probability of becoming debtors. The one-sibling group comprised about

69
one-third of the population for the three years under study and accounted for one-
half of the debtors.
In summarizing the ﬁndings of the investigation of Research Question 3, the
following were observed:
Hypothesis}: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to the following academic-success

variables: (a) grade point average and (b) ACT composite test score.

Hypothesiﬂa: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to grade point average.

This hypothesis was rejected. As shown in Table 13, the lower the students’
grade point average, the higher the probability of their being debtors. Students with
a grade point average between 0 and 1.5 constituted an increasingly larger portion
of the population and, likewise, brought an increasing debt burden upon themselves
and the university. The reverse was true for students with a 2.5 or higher grade
point average. These students accounted for about 45% of the freshman population
but comprised only 10% of the debtors. Thus, a student’s performance in the

classroom can be used as a predictor of that student becoming a debtor.

Hypothesiﬂbz Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to ACT composite test score.

This hypothesis was rejected. ACT composite scores of the nondebtors and
debtors were summarized in Table 14. Students with an ACT composite score of
16 or less had a signiﬁcantly higher chance of being a debtor than did those with an
ACT composite score of 17 or higher. Thus, the ACT composite score can be used

to predict a debtor. However, an increasing number of freshmen are not required

j 70
to provide an ACT score for admission purposes. The academic counselors use the
ACT score as a placement tool.
In summarizing the ﬁndings of the investigation of Research Question 4, the

following were observed:

mm: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to the following demographic variables:

(a) ethnic origin, (b) county of residence, (c) age, (d) gender, (e) marital
status, and (f) state residency status.

Hypothesisga: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to ethnic origin.

This hypothesis was rejected. The majority of the FSU freshman population
were either white or black. In the three years of the study, as shown in Table 15, the
two groups combined made up about 96% of the freshman class. Whites accounted
for about 80% of the freshman population and about 42% of the debtors. Blacks
accounted for about 15% of the freshman population and about 52% of the debtors.
The three other ethnic categories were Hispanic, Native American, and Asian. Asian
students were the least likely to become debtors. Hispanic and Native American
students jointly numbered fewer than 100 students and had a proportion of debtors

that was about the same as their share of the population.

ﬂypmnesjsAb: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to county of residence.

The hypothesis was not rejected for all counties except Wayne County. The
remaining 81 counties did not have a trend that could be used to predict a debtor in
comparison to a nondebtor (see Appendix A). The largest number of FSU freshmen

came from Mecosta and Wayne counties; students from these two counties,

71
combined, constituted about 25% of the freshman class. Wayne County is the
Michigan county with the largest population, and Mecosta County is the home of
FSU. Although Mecosta County has a population of only 50,000, FSU provides a
community college mission for Mecosta and for the surrounding four-county area,
which accounts for the number of students attending from that vicinity.

Hypothesisjg: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to age.

This hypothesis was rejected. The ages of debtors and nondebtors were
shown in Table 16. The average age of the debtors was about 1.6 years less than
that of the nondebtors. Also, the mean age of the students increased annually,
reﬂecting the increase in the number of adult learners in the freshman population.

WW: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to gender.

This hypothesis was not rejected. As shown in Table 17, no signiﬁcant
differences were found between nondebtors and debtors in terms of gender in any

of the three years under study.

W: Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to marital status.

This hypothesis was rejected. Marital-status data were reported in Table 18.
Married students were less likely to become debtors as compared to single students.
Married students comprised 7.7%, 7.9%, and 5.6% of the freshman population for
1991, 1992, and 1993, respectively. For the same period, married students

accounted for 2.8%, 2.4%, and 0.3% of the debtors. Because married students

72

made up such a small portion of the freshman population, marital status will probably
not be used as a predictor of debt.

' : Freshman debtors do not differ from the balance of the FSU
freshman student body with regard to state residency status.

This hypothesis was rejected. Nonresidents were less likely to become
debtors than were residents. Nonresidents made up about 5% of the freshman
class. Because nonresidents made up such a small portion of the freshman

population, state residency status will probably not be used as a predictor of debt.

5 [E' I'

The researcher identiﬁed one ﬁnding as the most signiﬁcant in the study.
Family income of the freshman students was the most signiﬁcant indicator of a
student debtor. The researcher found that the debtors’ average family income
averaged $8,952 less than that of nondebtors. Students with a lower family income
would have a higher ﬁnancial need and would be more likely to become a debtor as
compared to students with a higher family income. This finding indicates that the
selected characteristic, family income, can be used to determine which students are
most likely to become debtors.

Based on the ﬁnding concerning family income, additional research was
conducted; it is summarized in Appendix C. As a result of that additional research,
the researcher concluded that the other signiﬁcant ﬁndings also reﬂect the freshman

students’ family income as a basis for distinguishing between debtors and

73

nondebtors. It was also concluded that the debtors' family income was lower than
that of nondebtors, when reviewing ethnic origin, ACT composite score, cumulative
grade point average, number of siblings in college, and county of residence. That
is to say, selected characteristics of the freshman students—ethnic origin, ACT
composite score, cumulative grade point average, number of siblings in college, and
county of residence—had a direct relationship with students’ family income. These

relationships are discussed in further detail in the following sections.

The researcher identiﬁed four other signiﬁcant ﬁndings. These ﬁndings
pertain to ethnic origin, ACT composite score, cumulative grade point average, and
number of siblings in college. These four characteristics can be used as predictors
of debtors. These ﬁndings were supported by the research using the characteristics
individually and the additional research summarized in Appendix C. The signiﬁcant
ﬁndings are as follows:

1. The ethnic origin of the freshman students was a signiﬁcant indicator
of a student debtor. The researcher found that black students accounted for 15%
ofthetotal freshman student population; however, black students accounted for 52%
of the freshman debtors.

The research reported in Appendix C also indicated that black students’ family
income was less than white students’ family income; the difference in incomes
increased from $509 to $6,954 when comparing all students in each ethnic category

from 1991 to 1993. In 1991, 1992, and 1993, respectively, the number of black

74

students becoming debtors was 66, 114, and 172, whereas the number of white
students becoming debtors in those years was 68, 83, and 113. The Hispanic,
Native American, and Asian ethnic groups averaged 53, 47, and 36 freshman
students and 2, 6, and 0 debtors for 1991, 1992, and 1993, respectively. Because
these three ethnic-origin groups accounted for such a small number of freshman
students and debtors, no conclusion was drawn about the likelihood of students from
these ethnic groups becoming debtors.

2. The ACT composite test scores of the freshman students were also a
signiﬁcant indicator of a student debtor. The researcher found that the students with
the lowest ACT composite test scores were most likely to become debtors.
Freshman students with an ACT composite score of 16 or less accounted for 29%
of the total freshman population; however, this same group accounted for 50% of all
the freshman student debtors.

Additional research was conducted on family income and students’ ACT
composite score. It was found that family income increased as ACT composite
scores increased. Freshman students’ family income by ACT composite score
range is summarized in Appendix C. A continual upward trend in family income was
noted from the lowest ACT composite score grouping of under 11 to the highest
grouping of over 25. The family income of freshmen in the over-25 ACT composite
score group was two times larger in 1991 and 1992 and three times larger in 1993.

This difference was considered signiﬁcant.

75

3. The cumulative grade point averages of the freshman students were
a signiﬁcant indicator of a student debtor. The researcher found that the freshman
students who achieved less than a 1.50 cumulative grade point average were most
likely to become debtors. Students who achieved below a 1.5 cumulative grade
point average accounted for 16% of the freshman student population; however, they
accounted for 47% of the freshman debtors.

Additional research was conducted, and it was found that as the freshman
students’ cumulative grade point average increased, their family income also
increased. The results are summarized in Appendix C. The family income of the
debtors averaged less than that of the nondebtors within the same cumulative grade
point ranges. Therefore, as family income increased, students’ cumulative grade
point averages also increased.

Freshman students with a cumulative grade point average over 3.5 evidenced
a decline in family income. This high academic group had very few debtors because
the students ﬁt one of the following two proﬁles. They came from either a low family
income/high scholarship proﬁle or a high family income proﬁle.

4. The number of siblings in college was a signiﬁcant indicator of a
student debtor. The researcher found that freshman students with one sibling in
college were most Iikelyto become debtors. The freshman students with one sibling
in college accounted for 34% of the freshman student population; however, this

same group accounted for 51% of the freshman debtors.

76

Additional research was conducted to determine whether family income
increased with the number of siblings in college. The researcher found that the
average family income did increase with the number of siblings in college, with the
exception of students with no siblings in college. A large number of students with
no siblings in college also did not report family income. The number of siblings in
college was not as conclusive an indicator when compared to family income of
students with no siblings in college; however, an upward trend in family income was
evident as the number of siblings in college increased. The family income by sibling

data are summarized in Appendix C.

I 5' 'ﬁ l E' l'

Although the ﬁnding regarding county of residence was less signiﬁcant than
the other ﬁndings, the researcher determined that it needed to be mentioned. The
researcher found that freshmen from Wayne County were more likely to become
debtors than were those from any‘other Michigan county. This sole county was
signiﬁcant due to the proportion of debt created by this group of students. The
freshmen from Wayne County comprised 13% of the freshman student population;
however, they accounted for 36% of the freshman debtors.

Additional research was carried out to determine whether any difference
existed in family income by county. The results summarized in Appendix C show
that a difference did exist. Students from Wayne County did, in fact, have an
average family income that was less than that of the average of all counties,

excluding Genesee, Kent, Mecosta, Oakland, and Wayne counties. Those five

77
counties accounted for 44%, 45%, and 42% of the freshman student population for
1991, 1992, and 1993, respectively. As indicated earlier, family income did have a
direct effect on all of the characteristics used to identify debtors in this study.

The ﬁndings summarized above are those found to be signiﬁcant. Five of the
six ﬁndings discussed above pertain to information that is available to the university
before a student is admitted. The exception is students’ grade point average, which
they achieve after enrollment. Having ﬁve predictors of student debtors is important
because this gives the university an opportunity to manage its future debt. The
university can determine which students are most likely to become debtors. The
most signiﬁcant characteristic in determining a debtor was the student’s family
income. Ethnic origin, ACT composite score, number of siblings in college, grade
point average, and county of residence also were related to the student’s family
income. Although all of the ﬁndings can be used to predict debtors from nondebtors,

no predictions can be made with total accuracy.

CHAPTER V

SUMMARY, CONCLUSIONS, RECOMMENDATIONS FOR PRACTICE,
IMPLICATIONS FOR RESEARCH, AND REFLECTIONS

W

This chapter contains a summary of the study and the research ﬁndings.
Conclusions are drawn from the ﬁndings, and recommendations are made for
practice and future research. The researcher’s reﬂections are shared as the
ramiﬁcations of the ﬁndings and conclusions are considered.

The researcher’s primary purpose in this study was to compare FSU
freshman students identiﬁed as debtors with students identiﬁed as nondebtors to
determine whether any differences existed between the two groups in terms of
admission, ﬁnancial aid, academic success and student demographic
characteristics. The study included students enrolled in the Fall 1991, 1992, and
1993 terms. The student debtor category included those whose account balance
continued to exceed $150 at the end of the following term. The primary reasons for
waiting for an additional term were that many students pay at the beginning of the
next term before enrolling for classes and that some students delay in applying for
ﬁnancial aid. The student account receivable is, in many cases, paid after the term
or shortly after; therefore the researcher attempted to ensure that the students who

were studied had the highest probability of being debtors.

78

79

The relationship of the selected student-borrower variables to the propensity
to become a debtor was investigated. The viability of an institutional model to
predict a debtor was explored, using those selected variables that were found to
have a relationship to debtors. Ideally, the ﬁndings could be used not only as
admissions criteria, but also as predictors of becoming a debtor. Students who
match a speciﬁc proﬁle could be counseled as to their ﬁnancial obligations and/or
additional institutional ﬁnancial aid would be made available to students who match
a speciﬁc high-risk proﬁle. No model to deﬁne a high-risk student was developed in

this study.

Summary

Student tuition and housing revenue is the largest source of revenue for FSU.
During the past ﬁve years, the student account receivable balances at FSU have
been increasing. Freshman students were studied to determine whether selected
student characteristics can be used to predict nondebtors and debtors. The
following is a list of some of the more signiﬁcant reasons the researcher identiﬁed
for the increasing student debt: (a) cost of attendance is increasing at a pace much
faster than the CPI, (b) family income has been decreasing in real terms, (0) state
appropriations have been ﬂat or declining, and (d) ﬁnancial aid grant dollars have
been ﬂat at a time when student need is increasing. The increasing cost of
education has been exceeding the CPI since the early 1980s.

The cost of tuition and campus housing at FSU has increased from $5,004
in 1989 to $7,583 in 1994. The family income of the‘ typical FSU student has

averaged $37,245 from 1989 to 1994. The family income for the same period,

- 80
adjusted for inﬂation using the CPI, has decreased by $6,846. Because grant
funding has not changed signiﬁcantly in the past eight years, students have been
forced to become debtors to the university and/or the various loan funds. The
amount of student borrowing has increased to levels exceeding $20,000 for some
students.

The average account receivable debt for a FSU freshman has been
increasing annually. The average account receivable debt was $639. $767, and
$1,201 for 1991, 1992, and 1993, respectively. For the same period, the number of
debtors owing more than $150 also increased, with 144, 210, and 307 debtors for
1991, 1992, and 1993, respectively. The total debt also has increased annually, with
total debt of $92,003 in 1991, $161,039 in 1992, and $368,582 in 1993. The
university cannot absorb these increases without affecting its ﬁnancial stability. The
researcher did, in fact, point to some variables that can be used to reduce the risk
of debt to the university. Ideally, the ﬁndings may be used to restrict enrollment
and/or to better counsel the higher-risk students in order to improve their opportunity
for ﬁnancial success.

The most signiﬁcant variable found to predict debt was family income. Other
characteristics, such as ethnic origin, ACT composite score, student grade point
average, number of siblings in college, and county of residence, also may be used
to identify debtors from nondebtors. Using the identiﬁed ﬁndings, a university could
deﬁne the proﬁle of a potential student debtor. The university could become
proactive in reducing debt by informing students who meet a predetermined proﬁle

of the options available in order to improve their ﬁnancial and academic success.

81
The researcher found no predictor from the characteristics studied that would predict
a student debtor with total accuracy. Also, no part of the study was intended to
restrict students’ access to higher education. However, higher education institutions
must be conﬁdent that resources are available to meet the ﬁnancial aid need of
accepted students. The student’s socioeconomic background is considered a good
predictor of amdemic success. The researcher also believes the ﬁndings from the
study indicated the student’s socioeconomic background is a predictor of the
student’s ﬁnancial success. The researcher found the proportion of debtors to the
whole population (Table 1) was not large enough to statistically predict debtors from
nondebtors. Appendix D contains a multiple regression equation and correlation

matrix for the three years of the study.

[I I .
II I 5' 'ﬁ l C l .

Prediction of a student’s propensity to become a debtor can be
accomplished, based on the ﬁndings from this study. The best predictor of a
student’s becoming a debtor is the freshman student’s family income. Students with
a lower family income will have a higher ﬁnancial need and the greatest chance of
becoming debtors. The family income of the debtors in this study was lower than
that of the nondebtors.

The researcher discovered that family income also had a direct relationship
to the other signiﬁcant variables in the study. These were ethnic origin, ACT
composite score, cumulative grade point average, number of siblings in college, and

county of residence.

82

Because family income was found to be the most signiﬁcant variable,
additional research was conducted; results of that analysis may be found in
Appendix C. The family income of FSU students has not been increasing, but has
remained constant, according to the summary provided to the university by the ACT
Service. However, when these ﬁgures are adjusted for inﬂation, it can be seen that
the FSU students’ family income has been declining in real terms. The
demographics for Michigan also show that the available pool of students are from
the less affluent portion of the economic strata.

As the cost of education continues to increase and family income is not
expected to absorb the increased cost, the university will continue to experience bad
debts. This problem can be predicted and managed iffamily income is reviewed to
determine whether a student does have the ability to meet his or her ﬁnancial
commitment to the university. The researcher found that perceived ability to pay,
using family income as a measurement, is not exact in and of itself.

The ﬁnding regarding family income is of particular concern when coupled
with the United States Congress's attempt to deﬁne the future role of the federal
government in student ﬁnancial aid. Based on current information, funding will be
decreased and interest subsidies on loans may be reduced or eliminated. These
changes may most affect the students who are most in need—that is, those with the

lowest family income. However, all students will be affected, as will the university.

OH 5' 'II III I .
Four other variables were signiﬁcant predictors of debtors. These were ethnic

origin, ACT composite score, number of siblings in college, and cumulative grade

83
point average. These ﬁndings were supported by the research using the
characteristics individually and the additional research summarized in Appendix C,
which indicated a direct and/or indirect relationship of the particular characteristic to
family income. The signiﬁcant conclusions are as follows:

1. The ethnic origin of the freshmen was a signiﬁcant indicator of a
debtor. The researcher found that black students accounted for 15% of the total
freshman population; however, black students accounted for 52% of the freshman
debtors. This is considered signiﬁcant because more than half of the student
debtors were blacks.

Additional research was conducted to determine whether a relationship
existed between race and family income. It was found that such a relationship did
exist. Black students’ family income was less than that of white students; the
difference increased from $509 to $6,954 when comparing all students in each
ethnic category from 1991 to 1993. The number of black students becoming debtors
was 66, 114, and 172, compared to 68,83, and 113 white students in 1991, 1992,
and 1993, respectively. These numbers do not begin to be proportional to these
students’ representation in the freshman population.

The number of freshmen who were Hispanic, Native American and Asian
averaged 53, 47, and 36 in the three years under investigation; of those students,
2, 6, and 0 were debtors in the respective years. Because students of these three
ethnic origins accounted for such a small portion of the freshman population and the
debtor group, no conclusion was drawn except that Asian students are least likely

to become debtors.

34

The researcher concluded that ethnic origin does play a signiﬁcant part in
determining a debtor. Black students constituted the highest proportion of debtors
of the ﬁve ethnic groups studied. Of the 109 Asian freshmen, only one became a
debtor. Ethnic-origin data are available before a student is admitted to the
university. Thus, ethnic origin could be used in proﬁling future applicants.

2. The ACT composite test score of freshman students was a signiﬁcant
indicator of a student debtor. The researcher concluded that students with the
lowest ACT composite test scores were the most likely to become debtors. Students
with an ACT composite score of 16 or less accounted for 29% of the total freshman
population; however, this same group accounted for 50% of all the freshman student
debtors.

Additional research was conducted to determine whether a relationship
existed between students' ACT composite score and their family income. It was
found that family income did increase as ACT composite scores increased (see
Appendix C). There was a continual upward trend in family income from the lowest
ACT composite score group (under 11) to the highest group (over 25). The
increases in family income between the two ACT composite score groups were two
times higher for 1991 and 1992 and three times higher for 1993.

The researcher concluded that the ACT composite score was a signiﬁcant
indicator of a student’s becoming a debtor. In addition, the ACT composite score is
available before students are accepted to the university.

3. Freshman students’ grade point average was a signiﬁcant indicator of

a student debtor. It was found that freshmen who achieved less than a 1.5 grade

85
point average were most likely to become debtors. Students who had below a 1.5
grade point average accounted for 16% of the freshman student population;
however, they accounted for 47% of the freshman debtors.

Additional research was conducted to determine whether a relationship
existed between students' grade point average and family income. It was found that
as the freshman students’ cumulative grade point average increased, their family
income also increased (see Appendix C). The family income of the debtors
averaged less than that of the nondebtors in the same grade point ranges.

Freshman students with a cumulative grade point average over 3.5 evidenced
a decline in family income. This high academic group were found to be nondebtors
because the students ﬁt one of the following two proﬁles. They ﬁt either a low family
income/high scholarship or a high family income proﬁle.

Therefore, it was concluded that as family income increased. cumulative
grade point average also increased for the FSU freshman student population.
Cumulative grade point average is thus a predictor of a debtor. Students with the
lowest amdemic performance have the highest propensity to become debtors. The
cumulative grade point average is available once a student is enrolled and
completes a term of academic study. Unlike the other indicators, students’
cumulative grade point is not available to the university before admission or
enrollment. Cumulative grade point average can be used to determine whether
students should be allowed more time to prove themselves if they have an

outstanding student account balance.

86

4. The number of siblings in college was also a signiﬁcant indicator of a
student debtor. It was found that freshman students with one sibling in college were
the most likely to become debtors. The freshmen with one sibling in college
accounted for 34% of the freshman student population; however, this same group
accounted for 51% of the freshman debtors.

Additional research was conducted to determine whether a relationship
existed between family income and the number of siblings in college. It was found
that the average family income did increase as the number of siblings in college
increased, with the exception of families of freshmen with no siblings in college. A
large number of students with no siblings in college also did not report family
income. Having siblings in college was not as conclusive when compared to family
income as was having no siblings in college; however, an upward trend in family
income was found as the number of siblings in college increased (see Appendix C).

Students with one sibling in college were the most likely to become debtors.
Information on the number of siblings in college would be available to the university
before freshmen enrolled.

It was concluded that none of the preceding characteristics is a prefect
indicator of future debtors. However, the signiﬁcant indicators can help establish
which students have the highest potential of becoming debtors. The four signiﬁcant

indicators, individually, accounted for more than half of the debtors.

I 5' 'ﬁ 1 C l .
Although county of residence was a less signiﬁcant indicator, the researcher

determined that it needed to be identiﬁed. It was found that freshman students from

87

Wayne County were more likely to become debtors than were students from any
other county in Michigan. This sole county was signiﬁcant due to the proportion of
debt that is created by this group of students. The freshmen from Wayne County
constituted 13% of the freshman population; however, they accounted for 36% of the
freshman debtors. With such a signiﬁcant proportion of debtors conﬁned to one
county, the researcher concluded that this indicator was in the less signiﬁcant
category.

Additional research was conducted to determine whether a relationship
existed between family income of freshman students and their county of residence.
As shown in Appendix C, a relationship did exist between average family income
and county of residents. Students from Wayne County did, in fact, have a lower
average family income than the average of the other counties except Genesee,
Kent, Mecosta, Oakland, and Wayne. These ﬁve counties, combined, accounted for
44%, 45%, and 42% of the freshman student population in 1991, 1992, and 1993,
respectively. Thus, county of residence did have a relationship to family income and
can be used to identify debtors.

The indicators discussed above are those found to be signiﬁcant. Information
on ﬁve of the six indicators is available to the university before a student is either
admitted or enrolled. The exception is cumulative grade point average, which a
student achieves after enrollment. The fact that the university has information
available on ﬁve predictors of student debtors before a student is admitted or
enrolled is signiﬁcant because using this information gives the university an

opportunity to manage its future debt by identifying those characteristics that are

88
most likely to predict debtors. The most signiﬁcant indicator identiﬁed in this study
was family income. Ethnic origin, ACT composite score, grade point average,
number of siblings in college, and county of residence also were related indirectly
or indirectly to students’ family income and are predictors of debtors.

Other characteristics that were studied, such as application date, ﬁnancial aid
need, age, marital status, and residency status, can be used to predict debtors, as
well. Although these characteristics were not as signiﬁcant in predicting debtors,
they are additional areas that can be used collectively or individually with the
signiﬁcant characteristics to better predict which students have the highest risk of

becoming debtors.

B I l' E E l'

The following recommendations for practice could reduce universities’
exposure to increasing student account receivables. However, for many universities,
the recommendations may not be viable options.

1. Need-blind admission practices need to be reviewed. Colleges and
universities can no longer ignore the ﬁnancial background of the student applicant.
Although changing to a need-conscious admission practice would be a signiﬁcant
deviation from generally accepted admission practices, it should be considered in
order to reduce the institution’s exposure to student debt. A proportion of students
must be admitted regardless of their ﬁnancial background; however, universities will
not be able to absorb the student debt, nor will they be able to provide full aid to all

students demonstrating ﬁnancial need.

89

2. The university can play an active part in reducing debt. To become
active in the management of debt, the university should develop a model that would
identify students who correspond to an established proﬁle. Reviewing the ﬁndings
of the study would give the university established characteristics that could be used
to proﬁle student applicants. Of the six characteristics identiﬁed as signiﬁcant, ﬁve
are available to the university before a student enrolls.

3. The university should continuously monitor the student account
balance to make sure it is current. Once a student account becomes past due, the
university should contact the student directly to determine what the problem might
be. It is at this most critical point that a student may have some options to pay his
or her past due student account balance. If the university is proactive in the
management of student debt, the student and university will both be successful.

The characteristics identiﬁed in this study should be reviewed jointly to give
the best picture of a student’s potential for becoming a debtor. Students
corresponding to an established proﬁle could be rejected in the admission process,
those with the greatest need and ability could be provided adequate ﬁnancial aid, or
counseling could be offered to high-risk students; these are some alternatives that
could make students succeed both academically and ﬁnancially. To implement any
of these recommendations, however, approval by the university administration and

board of trustees would be required.

I I. I. If E l B I
The factors a freshman student must cope with during the transition to

university life are many and diverse, and they affect each student differently. The

90
issue of limited student resources and the resulting inability of students to pay their
university ﬁnancial obligations needs additional research. The ﬁnancial resources
would include ﬁnancial aid resources, student resources, family resources, and any
other source from which the student can secure funds to cover his or her academic
costs.

Because this was an institutionally based study, the ﬁndings and conclusions
are useful to FSU, its students, and perhaps similar institutions. This study was
designed to evaluate the F SU freshman student population with respect to selected
admission, ﬁnancial aid, academic success, and demographic variables; it could be
used to implement similar studies and parallel analysis at other institutions. The
outcome may be useful to analyze the institutions’ environment and to design
speciﬁc strategies for their populations. The researcher would expect similar results
at other institutions.

1. The ﬁrst implication for further research is to review the university’s
admission policy to determine whether the process itself is part of the reason why
students become debtors. The Admissions Ofﬁce’s successful recruitment of good
students is important to the well-being and longevity of the institution. However, the
wholesale recruitment of students who only meet an academic standard and have
no ability to pay is not in the best interest of the university or the student. The
admission policy could be studied to determine whether the need-blind admission
policy should be changed to a need-conscious policy. This change has many
political ramiﬁcations, and the university must be willing to do what is best for the

institution and not bow to political pressure. It is important to be sure the students’

91
well-being is considered in such a study. Both the university and the student must
be successful in the process.

2. A second implication for further research would be to develop a
contribution-to-margin model. By developing such a model, the analysis would need
to determine at what point the students are at least covering the variable cost of their
education and the services they receive. Student must pay an amount that exceeds
the variable cost so they will contribute some dollars to cover a portion of the ﬁxed
cost. The university must determine the point at which to say no to student
applicants. The university needs to determine how many students it is willing to
accept who may be able to contribute something to cover the ﬁxed costs of the
university but do not have the ability to pay all of their college expenses. Most
businesses would require a credit check before offering credit to their customers.
Likewise, colleges and universities need to review the risk associated with their
students (customers). Such a study would be helpful in assessing how much the
university could risk before the aged account receivables would have a negative
effect on the student and the university.

3. A third implication for further research would be to review various
payment-plan options. The study would be used to determine whether a change in
the method of collecting student account receivables and/or the expansion of time
to make payments on the student account would reduce the amount of the student
account receivable that becomes a debt. The public four-year institutions in

Michigan have a variety of methods and timing for making payments. The study

92
would determine whether any of the available options improve the payment of
student accounts.

4, Afourth implication for further research would be to continue to collect
data from this study for future years and follow the trend. The major areas in which
to continue the study would include the factors on which information is available
before a student enrolls at the university. These include the ACT composite score,
ﬁnancial aic need, ﬁnancial aid awarded and family income. This type of study could
lend itself to a controlled experiment in which a group of students identiﬁed as high
risk could be used to create a reasonably accurate prediction model of potential
debtors.

5, A ﬁfth implication for further research would be to study the high
schools from which students graduated. This would help determine whether a
potential debtor could be identiﬁed based only on the high school attended. The
students’ grade point averages could be looked at along with the high schools.
Variations in grade points by school would make using the grade point more difﬁcult;
however, this could help predict students’ academic success.

6. Finally, the ability to predict the debtor as compared to the nondebtor
among the freshman student population was explored in this study. A study of all
students, not only freshmen, would be helpful in determining at what academic level
students have a smaller chance of becoming debtors.

The major reason for any additional study is to make the university
experience successful for both the student and the university. The student who is

not concerned about ﬁnances will, in most cases, have problems with debt. The

93
results of the suggested studies could assist in identifying effective debt-reduction

strategies.

Reﬂections

Through reﬂection and discussion with other professionals, the researcher
used an occasion at a Michigan Association of Business Ofﬁce Managers meeting
to review the ﬁndings and discuss possible implications with a diverse group of
student account receivable professionals. This exercise assisted in validating some
thoughts and observations for the purpose of discussion.

First, universities have a clear role in the prevention of debt. Universities can
no longer expect students to continue to accumulate additional debt. The debt
students accumulate includes student loans and the account receivable to the
university. University administrators need to change their thinking to incorporate a
need-conscious standard, in contrast to the current need-blind standard.
Universities have the ability to help the number of students they can afford to help
with the existing level of ﬁnancial aid. Institutions will no longer be able to support
the wholesale admission of students.

Second, the ﬁnancial aid, registrar, admission, and businesses ofﬁces should
try to develop a plan to reduce the amount of debt students are allowed to
accumulate. The amount of debt students have accumulated could be reviewed
during the complete time students are enrolled at the university. This practice
should be approved bythe upper university administration and the board of trustees.
Their approval will, in the long term, make for a stronger institution and a more

successful student body. Adopting a need-conscious admission policy may require

94
a change in the Statement of Principles of Good Practice in College Admissions and
Recruitment. Although this statement is national in scope, perhaps colleges and
universities can no longer recruit students on the basis of academic and personal
criteria and not include ﬁnancial need among those criteria. With a funding gap,
ﬁnancial need must be used to determine admission to the university.

At what point(s) might intervention by the university be most beneﬁcial in
lowering the risk of a student’s becoming a debtor? At present, students who
receive federal ﬁnancial aid are mandated to attend an entrance interview before
receiving their aid. This regulatory requirement outlines the students’ responsibility
in repaying their loans and makes them aware that they must attend an exit interview
when they leave the university. The purpose of the exit interview is to outline the
students’ ﬁnancial obligation and how to begin repaying their loans. The entrance
interview should be available to non-ﬁnancial-aid students, as well. Currently, all
enrolled students receive an invoice detailing all the costs (charges) and the credit,
such as payments plus the ﬁnancial aid they have received. The intervention should
take place before students arrive on campus. What type of intervention is
necessary, as suggested by the study ﬁndings, merits discussion. Due to the
preponderance of critical differences that are related to admission variables, ﬁnancial
aid variables, academic success variables, and demographic variables will become
evident along the students’ educational continuum. Students’ performance and the
stabilization oftheir enrollment pattern may be the most effective method of lowering

the students’ risk of becoming debtors.

APPENDICES

APPENDIX A

COUNTY OF RESIDENCE OF NONDEBTORS AND DEBTORS

 

95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX A I
DEBTORS BY COUNTY
FALL TERM, YEAR 1991 1991 1991 1992 1992 1992 1993 1993 1993
COUNTY
ALCONA n 4 0 4 5 0 5 I 0 2
Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0I 0.0 100.0
Col °/o 0.1 0.0 0.0 0.1 0.0 0.1 0.1 I 0.0 0.1
I
l
ALGER n 5 0 5 2 0 2 3| 0 3
Row °/o 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col % 0.1 0.0 0.1 0.1 0.0 0.0 0.1l 0.0 0.1
I
ALLEGAN n 39 3 42 39 0 39 31 .‘ 2 33
Row % 92.9 7.1 100.0 100.0 0.0 100.0 93.93 6.1 100.0
Col °/o 0.9 2.1 1.0 1.0 0.0 1.0 0.9% 0.7 0.9
I
ALPENA n 7 1 8 22 0 22 24} 0 24
Row % 87.5 12.5 100.0 100.0 0.0 100.0 100.0j 0.0 100.0
Col % 0.2 0.7 0.2 0.6 0.0 0.5 0.7; 0.0 0.6
I
ANTRIM n 25 0 25 19 1 20 20? 2 22
Row % 100.0 0.0 100.0 95.0 5.0 100.0 90.9 9.1 100.0
Col % 0.6 0.0 0.6 0.5 0.5 0.5 0.61 0.7 0.6
I
ARENAC n 8 0 8 8 0 8 10I 0 10
Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0I 0.0 100.0
Col % 0.2 0.0 0.2 0.2 0.0 0.2 0.3 0.0 0.3
BARAGA n 2 1 3 5 1 6 6 0 6
Row % 66.7 33.3 100.0 83.3 16.7 100.0 100.0 0.0 100.0
Col % 0.0 0.7 0.1 0.1 0.5 0.1 0.2 0.0 0.2
BARRY n 21 0 21 11 1 12 13 0 13
Row % 100.0 0.0 100.0 91.7 8.3 100.0 100.0 0.0 100.0
Col °/o 0.8 0.0 0.5 0.3 0.5 0.3 0.4 0.0 0.3
BAY n 34 1 35 39 0 39 40 0 40
Row % 97.1 2.9 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col °/o 0.8 0.7 0.8 1.0 0.0 1.0 1.2 0.0 1.1
BENZIE n 17 0 17 10 0 10 7 0 7
Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col % 0.4 0.0 0.4 0.3 0.0 0.2 0.2 0.0 0.2
BERRIEN n 50 4 54 48 2 50 61 4 65
Row % 92.6 7.4 100.0 96.0 4.0 100.0 93.8 6.2 100.0
Col % 1.2 2.8 1.2 1.3 1.0 1.2 1.8 1.3 1.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

96

 

APPENDIX A - Continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1991 1991 1991 1992 1992 1992 1993 1993 1993

BRANCH n 20 0 20 18 0 18 15 1 16
Row % 100.0 0.0 100.0 100.0 0.0 100.0 93.7 6.3 100.0

Col % 0.5 0.0 0.5 0.5 0.0 0.4 0.4 0.3 0.4

CALHOUN n 32 2 34 30 0 30 20 2 22
Row "/0 94.1 5.9 100.0 100.0 0.0 100.0 90.9 9.1 100.0

Col °/o 0.8 1.4 0.8 0.8 0.0 0.7 0.6 0.7 0.6

CASS n 18 0 18 18 0 18 14 0 14
Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0

Col % 0.4 0.0 0.4 0.5 0.0 0.4 0.4 0.0 0.4

CHARLEVOIX n 16 0 16 5 0 5 16 1 17
Row % 100.0 0.0 100.0 100.0 0.0 100.0 94.1 5.9 100.0

Col °/o 0.4 0.0 0.4 0.1 0.0 0.1 0.5 0.3 0.5

CHEBOYGAN n 13 0 13 22 0 22 21 2 23
Row % 100.0 0.0 100.0 100.0 0.0 100.0 91.3 8.7 100.0

Col % 0.3 0.0 0.3 0.6 0.0 0.5 0.6 0.7 0.6

CHIPPEWA n 15 0 15 20 1 21 17 1 18
Row % 100.0 0.0 100.0 95.2 4.8 100.0 94.4 5.6 100.0

Col °/o 0.4 0.0 0.3 0.5 0.5 0.5 0.5 0.3 0.5

CLARE n 17 0 17 8 0 8 15 0 15
Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0

Col % 0.4 0.0 0.4 0.2 0.0 0.2 0.4 0.0 0.4

CLINTON n 34 1 35 28 0 28 36 1 37
Row °/o 97.1 2.9 100.0 100.0 0.0 100.0 97.3 2.7 100.0

Col % 0.8 0.7 0.8 0.7 0.0 0.7 1.0 0.3 1.0

CRAWFORD n 17 0 17 8 1 9 8 0 8
Row % 100.0 0.0 100.0 88.9 11.1 100.0 100.0 0.0 100.0

Col % 0.4 0.0 0.4 0.2 0.5 0.2 0.2 0.0 0.2

DELTA n 10 0 10 7 0 7 12 0 12
Row "/0 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0

Col % 0.2 0.0 0.2 0.2 0.0 0.2 0.3 0.0 0.3

DICKINSON n 9 1 10 13 0 13 13 0 13
Row °/o 90.0 10.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0

Col % 0.2 0.7 0.2 0.3 0.0 0.3 0.4 0.0 0.3

EATON n 38 2 40 31 1 32 35 1 36
Row °/o 95.0 5.0 100.0 96.9 3.1 100.0 97.2 2.8 100.0

Col % 0.9 1.4 0.9 0.8 0.5 0.8 1.0 0.3 1.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

97

 

APPENDIX A - Continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1991 1991 1991 1992 1992 1992 1993 1993 1993

EMMET n 10 0 10 16 0 16 10 1 11
Row % 100.0 0.0 100.0 100.0 0.0 100.0 90.9 9.1 100.0

Col % 0.2 0.0 0.2 0.4 0.0 0.4 0.3 0.3 0.3

GENESEE n 222 9 231 227 16 243 182 17 199
Row % 96.1 3.9 100.0 93.4 6.6 100.0 91.5 8.5 100.0

Col % 5.2 6.3 5.5 5.9 8.0 6.0 5.3 5.7 5.3

GLADWIN n 14 0 14 16 0 16 12 1 13
Row % 100.0 0.0 100.0 100.0 0.0 100.0 92.3 7.7 100.0

Col °/o 0.3 0.0 0.3 0.4 0.0 0.4 0.3 0.3 0.3

GOGEBIC n 2 0 2 6 0 6 4 0 4
Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0

Col °/o 0.0 0.0 0.0 0.2 0.0 0.1 0.1 0.0 0.1

GRAND n 69 0 69 41 0 41 38 0 38
TRAVERSE Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col "/0 1.6 0.0 1.6 1.1 0.0 1.0 1.1 0.0 1.0

GRATIOT n 29 0 29 42 2 44 33 0 33
Row °/o 100.0 0.0 100.0 95.5 4.5 100.0 100.0 0.0 100.0

Col % 0.7 0.0 0.7 1.1 1.0 1.1 1.0 0.0 0.9

HILLSDALE n 10 0 10 7 2 9 7 0 7
Row % 100.0 0.0 100.0 77.8 22.2 100.0 100.0 0.0 100.0

Col °/o 0.2 0.0 0.2 0.2 1.0 0.2 0.2 0.0 0.2

HOUGHTON n 5 0 5 8 0 8 11 0 11
Row °/o 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0

Col % 0.1 0.0 0.1 0.2 0.0 0.2 0.3 0.0 0.3

HURON n 40 1 41 53 1 54 26 1 27
Row °/o 97.6 2.4 100.0 98.1 1.9 100.0 96.3 3.7 100.0

Col % 0.9 0.7 0.9 1.4 0.5 1.3 0.8 0.3 0.7

INGHAM n 73 3 76 61 4 65 56 63
Row % 96.1 3.9 100.0 93.8 6.2 100.0 88.9 11.1 100.0

Col °/o 1.7 2.1 1.7 1.6 2.0 1.6 1.6 2.3 1.7

IONIA n 45 0 45 41 3 44 27 0 27
Row % 100.0 0.0 100.0 93.2 6.8 100.0 100.0 0.0 100.0

Col °/o 1.1 0.0 1.0 1.1 1.5 1.1 0.8 0.0 0.7

ISABELLA n 74 0 74 42 0 42 44 2 46
Row °/o 100.0 0.0 100.0 100.0 0.0 100.0 95.7 4.3 100.0

Col °/o 1.7 0.0 1.7 1.1 0.0 1.0 1.3 0.7 1.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

98

 

APPENDIX A - Continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1991 1991 1991 1992 1992 1992 1993 1993 1993

IOSCO n 21 0 21 17 0 17 15 2 17
Row °/o 100.0 0.0 100.0 100.0 0.0 100.0 88.2 11.8 100.0

Col % 0.5 0.0 0.5 0.4 0.0 0.4 0.4 0.7 0.5

IRON n 17 0 17 10 1 11 7 0 7
Row °/o 100.0 0.0 100.0 90.9 9.1 100.0 100.0 0.0 100.0

Col % 0.4 0.0 0.4 0.3 0.5 0.3 0.2 0.0 0.2

JACKSON n 48 0 48 42 2 44 33 2 35
Row % 100.0 0.0 100.0 95.5 4.5 100.0 94.3 5.7 100.0

Col °/o 1.1 0.0 1.1 1.1 1.0 1.1 1.0 0.7 0.9

KALAMAZOO n 56 0 56 30 1 31 40 2 42
Row % 100.0 0.0 100.0 96.8 3.2 100.0 95.2 4.8 100.0

Col °/o 1.3 0.0 1.3 0.8 0.5 0.8 1.2 0.7 1.1

KALKASKA n 12 1 13 5 0 5 10 0 10
Row °/o 92.3 7.7 100.0 100.0 0.0 100.0 100.0 0.0 100.0

Col % 0.3 0.7 0.3 0.1 0.1 0.3 0.0 0.3

KENT n 221 10 231 193 10 203 240 9 249
Row % 95.7 4.3 100.0 95.1 4.9 100.0 96.4 3.6 100.0

COI °/o 5.2 7.0 5.3 5.0 5.0 5.0 7.0 3.0 6.6

KEWEENAW n 3 0 3 1 0 1 0 0 0
Row °/o 100.0 0.0 100.0 100.0 0.0 100.0 0.0 0.0 0.0

Col % 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0

LAKE n 26 2 28 17 2 19 29 2 31
Row °/o 92.9 7.1 100.0 89.5 10.5 100.0 93.5 6.5 100.0

Col °/o 0.6 1.4 0.6 0.4 1.0 0.5 0.8 0.7 0.8

LAPEER n 53 0.00 53 32 3 35 46 3 49
Row % 100.0 0.0 100.0 91.4 8.6 100.0 93.9 6.1 100.0

Col °/o 1.2 0.0 1.2 0.8 1.5 0.9 1.3 1.0 1.3

LEELANAU n 13 1 14 8 0 8 7 0 7
Row % 92.9 7.1 100.0 100.0 0.0 100.0 100.0 0.0 100.0

Col % 0.3 0.7 0.3 0.2 0.0 0.2 0.2 0.0 0.2

LENAWEE n 24 0 24 32 1 33 44 2 46
Row % 100.0 0.0 100.0 97.0 3.0 100.0 95.7 4.3 100.0

Col °/o 0.6 0.0 0.5 0.8 0.5 0.8 1.3 0.7 1.2

LIVINGSTON n 71 1 72 63 0 63 36 4 40
Row % 98.6 1.4 100.0 100.0 0.0 100.0 90.0 10.0 100.0

Col % 1.7 0.7 1.6 1.6 0.0 1.6 1.0 1.3 1.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX A - Continued
1991 1991 1991 1992 1992 1992 1993 1993 1993
LUCE n 4 0 4 6 0 6 6 0 6
Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col °/o 0.1 0.0 0.1 0.2 0.0 0.1 0.2 0.0 0.2
MACKINAC n 7 0 7 7 0 7 6 1 7
Row % 100.0 0.0 100.0 100.0 0.0 100.0 85.7 14.3 100.0
Col % 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.3 0.2
MACOMB n 172 3 175 127 10 137 98 8 106
Row "/0 98.3 1.7 100.0 92.7 7.3 100.0 92.5 7.5 100.0
Col % 4.0 2.1 4.0 3.3 5.0 3.4 2.8 2.7 2.8
MANISTEE n 31 0 31 16 0 16 18 0 18
Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col °/o 0.7 0.0 0.7 0.4 0.0 0.4 0.5 0.0 0.5
MARQUETTE n 21 1 22 15 0 15 13 0 13
Row °/o 95.5 4.5 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col % 0.5 0.7 0.5 0.4 0.0 0.4 0.4 0.0 0.3
MASON n 19 1 20 9 1 10 22 4 26
Row % 95.0 5.0 100.0 90.0 10.0 100.0 84.6 15.4 100.0
Col % 0.4 0.7 0.5 0.2 0.5 0.2 0.6 1.3 0.7
MECOSTA n 590 13 603 481 11 492 363 18 381
Row °/o 97.8 2.2 100.0 97.8 2.2 100.0 95.3 4.7 100.0
Col % 13.9 9.1 13.7 12.6 5.5 12.2 10.5 6.0 10.2
MENOMIMEE n 2 0 2 3 0 3 4 0 4
Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col °/o 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1
MIDLAND n 51 2 53 48 0 48 38 1 39
Row "/0 96.2 3.8 100.0 100.0 0.0 100.0 97.4 2.6 100.0
Col °/o 1.2 1.4 1.2 1.3 0.0 1.2 1.1 0.3 1.0
MISSAUKEE n 23 1 24 24 0 24 14 0 14
Row % 95.8 4.2 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col % 0.5 0.7 0.5 0.6 0.0 0.6 0.4 0.0 0.4
MONROE n 16 0 16 13 0 13 22 1 23
Row % 100.0 0.0 100.0 100.0 0.0 100.0 95.7 4.3 100.0
Col % 0.4 0.0 0.4 0.3 0.0 0.3 0.6 0.3 0.6
MONTCALM n 56 0 56 53 2 55 40 2 42
Row % 100.0 0.0 100.0 96.4 3.6 100.0 95.2 4.8 100.0
Col % 1.3 0.0 1.3 1.4 1.0 1.4 1.2 0.7 1.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

100

 

APPENDIX A - Continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1991 1991 1991 19921992 1992 1993 1993 1993
MONTMORENY n 7 o 7 9 o 9 9 o 9
Row%100.0 o.o1oo.o 100.0 0.0 100.0 100.0 0.0 100.0
Col % 0.2 0.0 0.2 0.2 0.0 0.2 0.3 0.0 0.2
MUSKEGON n 46 3 49 52 1 53 64 14 78
Row% 93.9 611000 98.1 1.9 100.0 82.1 17.9 100.0
Col % 1.1 2.1 1.1 1.4 0.5 1.3 1.9 4.7 2.1
NEWAYGO n 68 o 68 96 2 98 87 3 90
Row % 100.0 061060 98.0 2.0 100.0 96.7 3.3 100.0
Col % 1.6 0.0 1.5 2.5 1.0 2.4 2.5 1.0 2.4
OAKLAND n 331 11 342 297 20 317 24s 20 265
Row% 96.8 32100.0 93.7 6.3 100.0 92.5 7.5 100.0
Col % 7.8 7.7 7.8 7.8 10.0 7.9 7.1 6.7 7.1
OCEANA n 26 o 26 23 1 24 15 1 16
Row % 100.0 601060 95.8 4.2 100.0 93.7 6.3 100.0
Col % 0.6 0.0 0.6 0.6 0.5 0.6 0.4 0.3 0.4
OGEMAW n 20 1 21 9 1 1o 10 0 10
Row% 95.2 4.81000 90.0 10.0 100.0 100.0 0.0 100.0
Col % 0.5 0.7 0.5 0.2 0.5 0.2 0.3 0.0 0.3
ONTONAGON n 2 o 2 1 o 1 o o 0
Row % 100.0 o.o1oo.o 100.0 0.0 100.0 0.0 0.0 0.0
Col % 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
osceoux n 114 3 117 112 1 113 114 7 121
Row% 97.4 2.61000 99.1 0.9 100.0 94.2 5.8 100.0
Col % 2.7 2.1 2.7 2.9 0.5 2.8 3.3 2.3 3.2
OSCODA n 5 o 5 4 o 4 6 o 6
Row%100.0 o.o1oo.o 100.0 0.0 100.0 100.0 0.0 100.0
Col % 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.2
075560 n 15 o 15 13 o 13 7 o 7
Row%100.0 o.o1oo.o 100.0 0.0 100.0 100.0 0.0 100.0
Col % 0.4 0.0 0.3 0.3 0.0 0.3 0.2 0.0 0.2
OTTAWA n 113 1 114 110 3 113 121 2 123
Row% 99.1 091006 97.3 2.7 100.0 98.4 1.6 100.0
Col % 2.7 0.7 2.6 2.9 1.5 2.8 3.5 0.7 3.3
PRESQUE n 8 o 8 8 o 8' 6 1 7
ISLE Row%100.0 09100.0 100.0 0.0 100.0 85.7 14.3 100.0
Col % 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.3 0.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101

 

APPENDIX A - Continued

 

1991 1991 1991 1992 1992 1992 1993 1993 1993
ROSCOMMON n 12 0 12 9 0 9 9 0 9
Row °/o 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col % 0.3 0.0 0.3 0.2 0.0 0.2 0.3 0.0 0.2

 

 

 

 

 

SAGINAW n 97 5 102 85 4 89 90 5 95
Row % 95.1 4.9 100.0 95.5 4.5 100.0 94.7 5.3 100.0
Col % 2.3 3.5 2.3 2.2 2.0 2.2 2.6 1.7 2.5

 

 

 

 

SANILAC n 33 1 34 22 1 23 16 0 16
Row % 97.1 2.9 100.0 95.7 4.3 100.0 100.0 0.0 100.0
Col % 0.8 0.7 0.8 0.6 0.5 0.6 0.5 0.0 0.4

 

 

 

 

SCHOOLCRAFT n 5 0 5 4 0 4 5 0 5
Row % 100.0 0.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col % 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1

 

 

 

 

 

SHIAWASSEE n 28 2 30 37 0 37 31 2 33
Row % 93.3 6.7 100.0 100.0 0.0 100.0 93.9 6.1 100.0
Col °/o 0.7 1.4 0.7 1.0 0.0 0.9 0.9 0.7 0.9

 

 

 

 

ST. CLAIR n 54 2 56 51 0 51 23 0 23
Row °/o 96.4 3.6 100.0 100.0 0.0 100.0 100.0 0.0 100.0
Col % 1.3 1.4 1.3 1.3 0.0 1.3 0.7 0.0 0.6

 

 

 

 

ST. JOSEPH n 23 0 23 20 2 22 17 2 19
Row % 100.0 0.0 100.0 90.9 9.1 100.0 89.5 10.5 100.0
Col °/o 0.5 0.0 0.5 0.5 1.0 0.5 0.5 0.7 0.5

 

 

 

 

TUSCOLA n 60 0 60 40 0 40 39 1 40
Row % 100.0 0.0 100.0 100.0 0.0 100.0 97.5 2.5 100.0
Col % 1.4 0.0 1.4 1.0 0.0 1.0 1.1 0.3 1.1

 

 

 

 

VANBUREN n 17 0 17 16 0 16 14 1 15
Row % 100.0 0.0 100.0 100.0 0.0 100.0 93.3 6.7 100.0
Col °/o 0.4 0.0 0.4 0.4 0.0 0.4 0.4 0.3 0.4

 

 

 

 

WASHTENAW n 55 3 58 56 4 60 36 5 41
Row % 94.8 5.2 100.0 93.3 6.7 100.0 87.8 12.2 100.0
Col °/o 1.3 2.1 1.3 1.5 2.0 1.5 1.0 1.7 1.1

 

 

 

 

WAYNE n 465 41 506 493 79 572 400 122 522
Row °/o 91.9 8.1 100.0 86.2 13.8 100.0 76.6 23.4 100.0
Col % 10.9 28.7 11.5 12.9 39.3 14.2 11.6 40.9 13.9

 

 

 

 

WEXFORD n 48 5 53 35 2 37 45 5 50
Row °/c 90.6 9.4 100.0 94.6 5.4 100.0 90.0 10.0 100.0
Col % 1.1 3.5 1.2 0.9 1.0 0.9 1.3 1.7 1.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX B

GENERAL SUMMARY OF FSU STUDENT CHARACTERISTICS

102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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APPENDIX C

SUMMARY OF FSU DEBTOR AND NONDEBTOR CHARACTERISTICS

105

 

106

 

 

 

107

 

108

 

109

 

110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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APPENDIX D

MULTIPLE REGRESSION EQUATION AND CORRELATION MATRIX

111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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