Wednesday, May 6, 2015

Religion and debt repayment

From Alumni from these colleges (almost) always pay their debts by Jonathan Rothwell.

A novel and interesting effort to measure the real value creation of a university.
Brookings’ new report on college quality attempts to evaluate schools based on their contributions to the economic success of alumni. Federal loan repayment is one of the measures, in addition to mid-career salaries and careers in high-paying occupations.

The challenge in evaluating colleges is to isolate the college’s contribution from its students’. Students with higher test scores and from families with higher incomes—like the wealthy and powerful Lannisters—will usually earn more money after college compared to their less-advantages peers. Also, colleges that offer higher-level degree programs (like medical degrees, master’s degrees, and bachelor’s) will tend to have higher-earning graduates than colleges that offer associate’s degree or certificates.

We predict loan repayment and the other outcomes based on a college’s student characteristics and a few of its baseline characteristics like the local cost of living and the mix of degrees offered. The difference between predicted loan repayment and actual repayment is what we call the college’s “value-added,” or its economic contribution to students.
Look at the results. Fascinating evidence of the real world importance of values and behaviors.

50% of the universities with the most diligent and unexpectedly high repayment rates are institutions with strong religious affiliations. Religiously affiliated universities are only 23% of all universities, so they are significantly overrepresented in the list of diligent debt repayers.

What the data would seem to support is what most would accept as commonsense, if you wish to have a commercial relationship with someone, and all else being equal, favor those who take their religion seriously.

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