Private student loan borrowing has increased dramatically over the last decade. But because private student loans have only recently emerged as a major source of student financial aid, little research has been done to measure the impact of the borrowing trend. This research study used longitudinal data at one private institution to ascertain whether the borrowing trend has influenced its persistence and graduation rates.

Logistic regression was used to assess the relationship of private student loan borrowing on persistence & graduation rates, while controlling for the following other variables: SAT scores, high school grade point average, college grade point average, family income, race, gender, parent education level, federal student loans and institutional grants/scholarships.

The sets of independent variables used to address the research questions were determined to have goodness of fit in almost all instances according to their Hosmer and Lemeshow statstics. Private student loans as independent variables, however, were not significant contributors in the results for any of the research questions according to their Wald statistics. Consequently, it appears that no statistically significant relationship exists between private student loan borrowing and persistence & graduation rates when controlling for other noted factors.

Although the evidence suggests that no relationship exists between private student loan borrowing and persistence & graduation rates, the results of this study contains other valuable information. Several of the other independent variables were shown to have statistically significant relationships to persistence & graduation rates. The independent variables with statistically significant relationships with persistence status were: SAT, college GPA, gender, race, institutional grants and federal student loans. The independent variables with statistically significant relationships with graduation status were: SAT, college GPA, race, institutional aid and federal student loans.