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Clackamas Community College
Vol. XII, No. 13
Wednesday, January 24, 1979
■
■rw
Matmen win
at tourney
iP
■»
■The Cougar wrestling
■am sponsored a 15-team
■irnament this weekend
[featuring some of the best
■uads in the Northwest,
■ackamas also was well
■resented as they showed
by taking first place. For a
few more details see page
jp
■Oregon ahead in loan repayment game
studying and left school. Ten
months passed before he was
notified payment was due on
■While students from coast to
Bast are earning poor marks his student loan. He hesitated.
™ their credit ratings by More letters followed the first
faulting on federally insured” one. The correspondence in
■ns, Oregon student loan cluded threats of income tax
■pients are earning praise for return attachment, one of the
baking their loan payments on
state-sanctioned methods of
■me
collection. James finally
■he national rate for student decided to pay up.
ban defaults has skyrocketed
“They had me, I guess,” said
[tola whopping 23 percent James. “I figured it would be
feently. More than 250,000 easier to pay back $3Q a month
■pients of state and federally than to be continually hounded
Manteed student loans are by collection agencies and
Ki truant in their repayments.
court preceedings.” Today,
But in Oregon, the default James is making regular
late is 7 percent for student payments, and will continue to
Mowers.
do so for the next few years.
■he reason? Some suggest
James’ case illustrates why
phi success is linked to good Oregon is successfully beating
■nmunication between len- the national 23 percent of
and student borrowers.
default rate. Betty Hager,
Marry James is an example.
manager of student loans for
|hi|975, James dropped out of U.S. National Bank in Oregon,
Efiooi owing a local bank cites good communication as
■000 on a loan which he had the key reason for that success.
Bed would help him through
“Communication all the way
Mege. But after three years of through the process provides
Bdy, James was tired of for a close watch on all poten
■Joe Woods
I The Print
tial defaulters,” she said. “Ex
tensive screening procedures
also help to eliminate the
would-be offenders from the
outset.”
All loans made to students in
Oregon must be co-signed by a
responsible adult if the student
does; not have established
credit. After the loan is gran
ted, the college is tasked with
monitoring the student’s
progress. If the student leaves
school or falls below adequate
academic standards, the bank
where the loan originated is
contacted. Then the bank uses
its own collection agency to
achieve repayment. If the bank
is not satisfied, the case is tur
ned over to the state for action.
Most student loans in other
states originate at, and are
guaranteed by, the federal
government. Most Oregon
student loans are insured at the
state level. The proximity of
state and local agencies make
collection prospects in Oregon
much brighter.
Dick Thompson, director of
financial aid at the College,
calls the Federally Insured
Student Loan program “FIZ-
ZLE” because, “on the national
level, it has become a night
mare of bureaucratic red tape.
Oregon had the foresight years
ago to see the potential hazards
in such a program and has
been able to avoid most of
them, making Oregons’ default
rate one of the lowest in the
nation.”
Oregon’s policy of insuring
loans at the state level has
caused an alleviation of the
headaches being suffered in
other states where the federal
government
guaranteed
student loans. When the
federal government and the
Office of Education is respon
sible for collecting, the truancy
rate has been very high.
Recently, regional offices have
been set up in San Francisco
and Dallas. Their job is to find
“deadbeats” and make them
pay up. So far, they have not
been highly successful.
In Oregon and other states
where loans are guaranteed
locally, the rates of collection
have been encouraging. Jeff
Lee, director of the Oregon
State Scholarship Commission,
believes Oregon’s low default
rate of seven percent is a direct
result of keeping the entire loan
process within the state.
“Oregon is doing a better job in
this respect because the lending
institutions have worked
closely with the state to insure
better collection procedures.
The lenders have done a better
job in screening applicants than
in other states,” said Lee.
The average loan granted to
a student in Oregon is $1,600
per year. The volume of initial
loans granted is up to $14
million this year. The default
rate has remained steady at
seven percent. Thus, Oregon’s
plan of localizing all student
loans seems to have worked.
Lee expects that Oregon will
realize only a three to four per
cent net loss on all defaults af
ter collection procedures are
followed throughout the state.
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