The Repository @ St. Cloud State

Open Access Knowledge and Scholarship

Date of Award


Culminating Project Type




Degree Name

Applied Economics: M.S.




School of Public Affairs

First Advisor

Dr. Kenneth Rebeck

Second Advisor

Dr. Mana Molle-Komai

Third Advisor

Dr. Zhengyang Chen

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Keywords and Subject Headings

Student Debt, Default, Selectivity, Education, Policy, University


The student debt crisis is one of the most prominent financial problems facing the United States today. As of 2018, the student loan market is now the largest source of non-mortgage household debt in the United States. Using data from 4-year public universities in the United States from 2013 to 2018, I examine the relationship between school selectivity and student loan default rates. I employ an OLS model with measures of selectivity defined as ACT scores of incoming freshmen and admission percentages of universities. Where higher ACT scores and lower admission percentages signify an increase in school selectivity, I find a negative relationship with ACT scores and default rates. These results are robust across model specifications and imply that higher ACT scores lead to a decrease in the chance of loan default. I suggest education policy changes, such as a personal finance seminar for incoming freshmen at low-selectivity schools, could lead to decreases in default rates.


I would like to first thank my wonderful committee for taking the time to help me through this process. Without your guidance, I would have never been able to come this far. Next, I would like to thank the Economics department. You have always been there when I needed help, a friendly face, or simply a good conversation. Lastly, I would like to thank my family and friends, who have supported me and cheered me on since the beginning. You have my sincerest gratitude. Thank you all