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# Graduate schools have begun to check whether applicants for

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Manager
Joined: 29 Apr 2013
Posts: 86
Location: India
Concentration: General Management, Strategy
GMAT Date: 11-06-2013
WE: Programming (Telecommunications)

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24 Sep 2013, 09:04
4
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Difficulty:

95% (hard)

Question Stats:

53% (02:44) correct 47% (02:42) wrong based on 475 sessions

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Graduate schools have begun to check whether applicants for admission are in default on government-guaranteed student loans. Any application submitted by an applicant who fails this test is not processed. Though all applications are tested, it is thought that the 3 percent of the applications that fail represent only three-quarters of the incoming applications from individuals in default. Consequently, approximately 1 percent of the applications that are processed are those of applicants in default who remain undetected.

Which of the following inferences about the consequences of instituting the new procedure is best supported by the passage above?

A) The rate of default on government-guaranteed student loans will probably increase by 1 percent.
B) The rate of default on government-guaranteed student loans will probably decrease.
D) The percentage of applications processed by graduate schools may decrease.
E) The percentage of loan applications from students applying to graduate school is likely to increase.

I am not able to understand the meaning of the question
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Joined: 30 Apr 2012
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24 Sep 2013, 23:17
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TirthankarP wrote:

But if there are still 1% cases that go undetected then how D is the correct option?

TirthankarP-

Let me walk through the answer choices to see if that clarifies D in your mind as the correct answer. Before I do that, remember the goal on these "inference" questions in CR. You have to take the information provided by the argument and determine what most likely would be true.

A) The rate of default on government-guaranteed student loans will probably increase by 1 percent.
We can't make an inference on the overall government student loan default rate based on the actions of only grad schools.
B) The rate of default on government-guaranteed student loans will probably decrease.
Just because grad schools are not processing a portion of applications from "defaulted" applicant does not mean that we can be reasonably sure that the overall loan rate of default will decrease.
The applications are not impacted at all by this program. After the applications are RECEIVED, they are not processed if the applicant is in default.
D) The percentage of applications processed by graduate schools may decrease.
If grad schools implement a program whereby they stop processing some applications that would have been processed in the past, we can be relatively confident that the percentage of processed applications will decrease. -- Correct
E) The percentage of loan applications from students applying to graduate school is likely to increase.
Out of Scope. We are talking about grad school applications, not loan applications. (This is a common trap of the GMAT - watch out for these word shifts.)

D is the only answer choice that we could confidently say would happen based on the information in the argument.

KW
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24 Sep 2013, 09:31
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Hi Tirthankar,

I agree tricky one. Tough language, I'll talk you through the question and how it works - and then leave you to see if you can sort out the answer...

Graduate schools have begun to check whether applicants for admission are in default on government-guaranteed student loans.
This is the basic premise of the argument. Grad Schools are checking if applicants have defaulted on previous debt
Any application submitted by an applicant who fails this test is not processed.
And if they are in default (ie they didn't pay back their government loans) they get rejected
Though all applications are tested, it is thought that the 3 percent of the applications that fail represent only three-quarters of the incoming applications from individuals in default.
But there is a problem.... Not all of the people in default get found out through this system
Consequently, approximately 1 percent of the applications that are processed are those of applicants in default who remain undetected.
The conclusion: 1% of applications are let through when they shouldn't be

Which of the following inferences about the consequences of instituting the new procedure is best supported by the passage above?
The question asks you for inference. What can you imply about the procedure. As the system is clearly not perfect, you would be looking for an explanation why this is the case.

Hope that helps...

James
##### General Discussion
Manager
Joined: 29 Apr 2013
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Location: India
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24 Sep 2013, 23:39
1
KyleWiddison wrote:
TirthankarP wrote:

But if there are still 1% cases that go undetected then how D is the correct option?

TirthankarP-

Let me walk through the answer choices to see if that clarifies D in your mind as the correct answer. Before I do that, remember the goal on these "inference" questions in CR. You have to take the information provided by the argument and determine what most likely would be true.

A) The rate of default on government-guaranteed student loans will probably increase by 1 percent.
We can't make an inference on the overall government student loan default rate based on the actions of only grad schools.
B) The rate of default on government-guaranteed student loans will probably decrease.
Just because grad schools are not processing a portion of applications from "defaulted" applicant does not mean that we can be reasonably sure that the overall loan rate of default will decrease.
The applications are not impacted at all by this program. After the applications are RECEIVED, they are not processed if the applicant is in default.
D) The percentage of applications processed by graduate schools may decrease.
If grad schools implement a program whereby they stop processing some applications that would have been processed in the past, we can be relatively confident that the percentage of processed applications will decrease. -- Correct
E) The percentage of loan applications from students applying to graduate school is likely to increase.
Out of Scope. We are talking about grad school applications, not loan applications. (This is a common trap of the GMAT - watch out for these word shifts.)

D is the only answer choice that we could confidently say would happen based on the information in the argument.

KW

Thanks KyleWiddison

But from your explanation I understood that option D is inferred only from the 1st two sentences of the argument.

Graduate schools have begun to check whether applicants for admission are in default on government-guaranteed student loans. Any application submitted by an applicant who fails this test is not processed.

The next 2 sentences have no impact on option D i.e. "1% defaulters go undetected".

Though all applications are tested, it is thought that the 3 percent of the applications that fail represent only three-quarters of the incoming applications from individuals in default. Consequently, approximately 1 percent of the applications that are processed are those of applicants in default who remain undetected.

So in inference questions, don't we need to choose an option that can be concluded from the whole argument and not just from a subset of the argument?
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12 Aug 2017, 14:34
1
I don't think this question makes sense. For one thing, the correct answer says "X may happen" ("the percentage of applications processed by graduate schools may decrease"). In other words, that might happen, but it might not. That's not a very useful inference! If there's uncertainty about something, then you can always say "it may happen" - you don't need to read a lengthy question stem to reach that conclusion.

I think Kyle in his post above has correctly worked out the intended logic behind the answer - if grad schools are no longer processing some applications, then they're processing fewer applications than before. But the way the question is worded, grad schools have already been filtering out the applications discussed in the question stem (they "have begun" to check, which means they recently started to check). From that we could conclude that at some time in the recent past, grad schools began processing a lower percentage of applications. But there's nothing in the passage that tells us about what grad schools intend to do in the future. I guess D has to be right, because no other answer choice is a logical conclusion from the passage, but it's only right because it doesn't say anything concrete. In real GMAT CR questions, you'll always need to infer something meaningful from the information provided.
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Updated on: 24 Sep 2013, 10:07
plumber250 wrote:
Hi Tirthankar,

I agree tricky one. Tough language, I'll talk you through the question and how it works - and then leave you to see if you can sort out the answer...

Graduate schools have begun to check whether applicants for admission are in default on government-guaranteed student loans.
This is the basic premise of the argument. Grad Schools are checking if applicants have defaulted on previous debt
Any application submitted by an applicant who fails this test is not processed.
And if they are in default (ie they didn't pay back their government loans) they get rejected
Though all applications are tested, it is thought that the 3 percent of the applications that fail represent only three-quarters of the incoming applications from individuals in default.
But there is a problem.... Not all of the people in default get found out through this system
Consequently, approximately 1 percent of the applications that are processed are those of applicants in default who remain undetected.
The conclusion: 1% of applications are let through when they shouldn't be

Which of the following inferences about the consequences of instituting the new procedure is best supported by the passage above?
The question asks you for inference. What can you imply about the procedure. As the system is clearly not perfect, you would be looking for an explanation why this is the case.

Hope that helps...

James

Thanks James for explaining the argument in simple words.
But if there are still 1% cases that go undetected then how D is the correct option?

Originally posted by TirthankarP on 24 Sep 2013, 10:03.
Last edited by TirthankarP on 24 Sep 2013, 10:07, edited 1 time in total.
Manager
Joined: 10 Apr 2013
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24 Sep 2013, 10:06
Very tricky must say. plumber250 does give a wonderful explanation.

Going by it, if 1% is remaining undetected, then it can be inferred that Graduate schools will get their act together to plug this leak.

Thus option D seems correct.

Regards

Argha
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25 Sep 2013, 22:28
TirthankarP wrote:

Thanks KyleWiddison

But from your explanation I understood that option D is inferred only from the 1st two sentences of the argument.

Graduate schools have begun to check whether applicants for admission are in default on government-guaranteed student loans. Any application submitted by an applicant who fails this test is not processed.

The next 2 sentences have no impact on option D i.e. "1% defaulters go undetected".

Though all applications are tested, it is thought that the 3 percent of the applications that fail represent only three-quarters of the incoming applications from individuals in default. Consequently, approximately 1 percent of the applications that are processed are those of applicants in default who remain undetected.

So in inference questions, don't we need to choose an option that can be concluded from the whole argument and not just from a subset of the argument?

You raise a great point about inference questions (which also shows a point of weakness in this particular question). Inference questions are a specific type of GMAT question that asks you to make an inference (or draw a conclusion) based on the information (or premises) presented in the "incomplete" argument. You cannot truly make an inference (or conclusion) from an argument that already has a conclusion (as this question is asking you to do). On the GMAT, these inference questions will come with premises but no conclusion and your answer will be a valid conclusion that must be true based on the premises provided. For examples, see the Verbal Supplement questions 12, 14, & 19 (there are others but those were just the first few I pulled out).

KW
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