Graduate schools have begun to check whether applicants for

What we see: a Critical Reasoning inference question. We need the one choice the passage's facts support, with nothing added from outside.

Step 1. Read the new procedure.
What we see: graduate schools now check whether each applicant is in default on a government-guaranteed student loan. "Any application submitted by an applicant who fails this test is not processed."
What it means: before the check, schools processed every application they took in. Now some are stopped. The passage puts the ones that fail at about 3 percent.
What we do and why: if applications that used to go through are now stopped, the share of applications that get processed drops below what it was. That is a safe conclusion from the facts alone.

Step 2. Read the 1 percent carefully.
What we see: about 1 percent of the applications that are processed still come from people in default who were not caught.
What it means: this number is about who slips past the check. It says nothing about how many people will default on loans in the future.
What we do and why: so any choice that predicts a change in default rates goes beyond the facts.

Step 3. Match the choices.
The choice saying the percentage of applications processed may decrease fits Step 1: some applications that used to be processed are now stopped. The word "may" keeps the claim safe.
A: the 1 percent is the share of processed applications from undetected defaulters, not a 1 percent rise in default rates. Right number, wrong meaning.
B: the passage never says the check makes anyone repay a loan. It may happen in real life, but nothing here supports it.
C: the passage is about what schools do with the applications they get, not how many arrive.
E: loan applications are never counted in the passage.

The trap: B. It sounds like the reason schools started checking. But the passage gives no fact about how borrowers act, only about which applications get processed.
Takeaway: On an inference question, pick the choice that follows from the facts on the page. A prediction about what people will do next needs facts the passage does not give.

Answer: D