A federal study was conducted in 2008 to calculate and evaluate the factors that contribute to student loan defaults. Results showed that over four years, default rates increased by 6% across student groups (Choy and Li, 2006 cited in Gross et al, 2009) and by 60% across certain types of institutions (Lederman, 2008 cited in Gross et al, 2009) These statistics have pushed regulators to take control and identify the factors that contribute to high defaults, which makes the importance of credit scoring models for student loans even more crucial. The banking system should improve its credit scoring models to reflect past default