Educational borrowing through guaranteed loan programs : perceptions of Ball State University dropouts

Field: Social Sciences (Social Sciences)

The purpose of the study was to determine the perceptions of Ball State University students who participated in the Guaranteed Student Loan Program and withdrew from school before completing a degree program. Specifically, the study was concerned with: (1) Determining the perceptions of identified students in areas of financial concern with regard to borrowing through the Guaranteed Loan Program; (2) determining the perceptions of the borrowers as related to selected personal areas with regard to borrowing through the loan program; (3) identifying the opinions of students regarding participation in the loan program as related to the appropriateness of the program, basis for eligibility, repayment plans, advice to prospective borrowers and the overall experience of borrowing through the Guaranteed Student Loan Program.A review of literature pertaining to guaranteed loan programs was made and a questionnaire was sent to a random sample of 100 students who had participated in the Guaranteed Student Loan Program but withdrew from Ball State University before completing a degree. Seventy-one borrowers returned a completed questionnaire.The analysis of data revealed that Ball State University students who borrowed through the Guaranteed Student Loan Program but left school prior to graduation were usually single at the time of borrowing but tended to marry at a later date, were not dependent on parents for financial support and came from homes of parents having a wide range of annual gross incomes. The identified dropouts were more likely to borrow through the loan program than obtain money for education expenses from any other source, did not, use the money for purposes other than education and tended not to default on repayment to the lender of the loan or declare bankruptcy. The student borrower accepted full responsibility for repayment of the loan in a majority of the cases.Ball State University dropouts did not perceive the influence of borrowing through the Guaranteed Student Loan Program as an inclination to be more susceptible to borrowing, interfering with the choice of a marriage partner or affecting decisions regarding size of family. The student borrowers perceived the loan program as a positive effect on the decision to attend college but not on the selection of Ball State University as the institution of higher education to attend.The identified borrowers indicated the amount borrowed as being appropriate, the overall borrowing experience as satisfactory but believed the basis for repayment should have been a combination of the amount borrowed and the borrower's income after leaving college.There was no significant relationship between the amount of money borrowed by the Ball State University dropouts and the use of the money for purposes other than education expenses, defaulting on repayment, necessity to borrow after leaving college due to the debt accrued by the loan, the influence of borrowing on the borrowers' ability to purchase certain consumer items, or the overall experience of borrowing through the Guaranteed Student Loan Program.