Predicting Student Loan Delinquency and Default - SRDC

Predicting Student Loan Delinquency and Default


Introduction – Motivation (1) Results from LAHS-BC suggested that students might not understand student financial aids adequately. Not all factors were taken into consideration when they borrowed.

Canada Student Loan Program (CSLP) provides a mortgage-style student loan (amortized to a period after study).

The three-year default rate of the 2009-10 consolidation cohort was 9 percent among university graduates and 17 percent among college graduates (HRSDC, 2012).

Serious consequences of a defaulted CSLP loan:

  • The loan is returned to CRA for debt collection.
  • The loan cannot be discharged in most cases.
  • The borrower is disqualified from further CSLP loans.
  • Universal access: uniform “risk premium” within a cohort
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