Loan default increase prompts stiff penalties
By Molly Watkins
■ The Evergreen
Washington State U.
In response to an increase in the
number of students who don’t repay
their student loans, the U.S.
Department of Education has
announced stiff measures punishing
schools with high default rates.
Starting in January 1991, schools
with default rates of more than 60 per
cent will have their guaranteed stu
dent loan (GSL) programs limited, sus
pended, or. in extreme cases, terminat
ed. A little more than 200 schools cur
rently would fall into this category
Schools with default rates between
40 percent and 60 percent will be
required to reduce their numliers by
5 percent a year or the same penalties
will apply About 450 schools would
fall into this category if the measures
were enacted now.
Schools with default rates of more
than 20 percent will he required to
develop default management plans
There are 1,7(X) such schools presently
Washington State U. Financial Aid
Director Anna Griswold said the high
national default rate reflects a nation
al shift in financial aid from mostly
grants to mostly loans. “Students are
graduating more m debt ”
However, Griswold said she doesn't
expect any schools to have their GSL
programs entirely eliminated.
“I don't see it as a viable option," she
said. The loans aren’t from the
schools, so the schools can’t guarantee
their repayment, she said
Other regulations include a require
ment to provide entrance counseling
to first lime borrowers Vocational
schools must provide information to
prospective students regarding com
pletion rates and job placement
WSU Minority Recruiter Aaron
Haskins said the new rules aren’t too
stringent and are not intended to
adversely affect low income students
A large percentage of the students
defaulting on loans don’t complete
their degrees and can’t pay back the
loans because they lack employment,
1 laskms said There needs to bo more
of an effort to retain students, lie said
Strings
Continued Irom page 1
exempt from registering
But officials from both Kansas State
U and Boston l' said they are not going
to actively review student records to find
drug-related convictions.
"We re not going to look for it and we
wouldn’t normally hear about it.” said
Boston l' Financial Aid Director
Barbara Tornow
■ Marcia Gelbart, The ('ampus limes, l'
of Rochester, Joanna Glickler, Round Up,
New Mexico State l’ . Marcia Kapustin,
The Eupie, American U.; Steven Ochs, The
Daily Pennsylvanian, 1 of Pennsylvania,
Lon Riglx'l'g, The Daily Five Tress. Boston
U.; Shawn Schuldies. 'The Daily
Nebraskan, l’ of Nebraska-Lincoln, and
Robert Short, The Kansas State ('ollepian,
Kansas State l’., contributed to this stars
Continued from page 1
Currently, a student can receive
$99,300 m federal aid for an undergrad
uate education, $43,000 of which can be
in the form of non-repayable grants, a
marked difference to the $24,000 maxi
mum a student could receive under
Nunn’s plan Federal student aid pro
grams assist about 2 million first-year
students annually, whereas the Nunn
bill would serve only 700,000.
The bill would cost $5 billion more a
year than the student aid programs it
would replace, mainly because its
reward system isn't linked to student
financial need
“It does look like it comes up short, but
it’s an opportunity to work before start
ing an education," Nunn’s press secre
tary said.
But U. of Iowa Financial Aid Director
Catherine Wilcox suggested the bill
might deter students from attending col
lege
“I’d imagine if they went ahead with
this program there’d be a number of stu
dents who’d say ‘Forget this’ and not go
to school altogether," she said.
China
Continued from page 2
protests feel that it's dangerous to go
back now.”
For those Chinese students who want
to stay in tins country temporarily,
President Bush has offered one-vear visa
extensions. But some officials at the U.
of Minnesota are advising students not
to take the extension as long as they can
stay on their current visa.
Chinese students fear that if they take
the extension, they will be branded as
“counterrevolutionaries" by the Chinese
government. And they don’t know
whether they will be forced to leave after
the one-year period.
“Basically, the president makes a slap
dash decision saying we’ll take care of all
the Chinese students who are here. And
all the students go. Hooray, we'll be OK
But then it turns out it’s not such a great
deal after all,” said Mark Schneider of
the U. of Minnesota’s Office of
International Education.
There are 650 Chinese students and
scholars at the U. of Minnesota — the
largest group at any U.S. school. Most
support a bill in Congress under which
Chinese students would be given
“extended voluntary departure status"
similar to that granted to Polish,
Ethiopian and Ugandan students in the
past.
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