the institute of higher education policy, a Washington, DC-based research firm,
ID: 3304679 • Letter: T
Question
the institute of higher education policy, a Washington, DC-based research firm, studied the payback of students loans for 1.8million college students who had 38. Policy, a Washington, DC-based research firm. The Institute for Higher Education studied the payback of student loans for 1.8 million college students wh student loans that began to become due six years prior. The study found of the student loans were being paid back in a satisfactory fashion, an the student loans were delinquent. The following joint probability tab probabilities of a student's loan status and whether or not the student had received a college degree. that d 50% of le shows the College Degree No 24 .34 .58 Yes .26 16 .42 Loan Status Satisfactory Delinquent .50 .50 What is the probability that a student with a student loan had received a college degree? What is the probability that a student with a student loan had not received a college degree? Given the student had received a college degree, what is the probability that the student has a delinquent loan? a. b. c.Explanation / Answer
a) P(a student with student loan had received college degree) = 0.42
b) P(a student with student loan had not received college degree) = 0.58
c) P(delinquent loan | college degree) = P(delinquent loan and college degree)/ P(college degree)
= 0.16/0.42
= 0.381
d) P(delinquent loan | no college degree) = P(delinquent loan and no college degree)/ P(no college degree)
= 0.34/0.58
= 0.586
e) From the answer of (c) and (d), it can be concluded that there is more probability that the loan will be delinquent if the student drops out of college without a degree.
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