Student loan default rates still high
((IPS) Tin* college student loan default rate
hasn't improved after all. tier I S Department of lain
i atiori admitted
tilting a statistical error vvorlh $400 million, the
Kducation Deparlmenl which overseas most federal
ruling!! programs confessed about 17 percent of the
student loans due in l'ltUt were ill default, nhout lire
same rale as in 1087
I he government has fried everything from towing
avvav Irorrowers' i ars, to garnishing deadbeats' pay
(hecks, to crosschecking obscure computer lists to
bring the default rate down
In Mav. it cautiously announced some suitcss. re
porting the default rate had decreased to la t> pen ent
of the money (tue to he repaid in 1088
However, department officials now say they made
a mistake by overlooking the $400 million in loans a
portion of whit h were in default due to he repaid in
1088 Once overdue loans are figured in. the national
default rate will l>e about 17 peri ent. neat l\ the same .is
reported for fist al 1087
The error was dis< oveied by the ( albumin Student
Aid ( ominission. a state agent v that approves federal
guarantees tin student loans made by hanks
Kmployecs there apparently noticed that default
[.ill's ill .1 number of California schools had curiously
dropped lo less than III percent Thin tracked the
i hanges bat k lo a portfolio ol suspended loans, xvhic h
were Inadvertently counted as being in repayment
The loans all were serviced In United hducation
Software a Ualifornia firm that last year drew attention
for its mishandling of loans In Man h the l-.dtir a
lion Department refused to bail out the company for
$fc)(l million in loans that hadn't been repaid, bei ause
the department ruled. 1 'oiled Education Software had
failed to follow proper r ollei lion proi edures
besides i overing up .i lai k of progress on the de
fault problem, the error artifii iallv reduced the high de
fault rates ol some trade schools and community col
leges. making their students again eligible for Supple
mental Student bonus
( (ingress last year excluded students at schools
with default rates of more than it) percent from receiv
ing Supplemental Student l oans
I he I duration department still has not derided
whether or how to recalculate tile default rates, and
said it would rlr-r itie if .lifer ted sr hools are eligible for
the supplemental loans on a r use by t use basis
1 prefer not to put the fault oil anybody said Ho
berta Dunn deputy assistant set retary for student ti
nancial assistant e "It s not anybody s fault
National
Two universities
sell tobacco stock
(Cl'S) Schools nationwide will soon he
selling off shares in tobacco companies, anti
smoking a< twists said
Both Harvard I ’niversily and the City I 'niver
sitv ol New York recently announced they would
prevent their endow ment funds from investing in
tohai on stocks in the future.
In the first flushes of victory, anti smoking
activists predicted such divestments would soon
become as common as schools selling shares in
companies that do business in segregationist
South Afric a
The campus divestment movement, in turn,
generated enough political pressure to alter the
I'nited States' policy toward the government of
South Africa, the Americ an Committee on Afric a
maintained
"It's totally inconsistent to invest in the lead
ing preventable c ause of death and disease. " said
Bracl krevor. executive director of the newly
formed Tobacco Divestment Project in Massachu
setts
Turn to TOBACCO, Page 8
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