The percentage of students from for-profit institutions who have defaulted on their student loans has received much attention recently. Suppose the following data were collected from a random sample of students who graduated three years ago from various types of institutions with student loans:

Defaulted on Loan?

Institution Yes No Public 9 111 Private 7 143 For-profit 13 67

a. Using a = 0.05, perform a chi-square test to determine if the proportion of students who default on their student loans differs by the type of institution.

b. Confirm your results using PHStat.

c. Interpret the meaning of the p-value from PHStat2.

d. How does the type of institution appear to relate to the likelihood of students defaulting on their loans?

AppendixLO1