Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, September 2, 1994 TAG: 9409020075
SECTION: VIRGINIA PAGE: B4 EDITION: METRO
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: Medium
Statistics compiled by the U.S. Department of Education show 14.9 percent of those Virginia students with federally backed student loans defaulted on those loans in fiscal year 1992, the latest year figures are available. The default rate was 15 percent in 1990.
The national average for 1992 was 15 percent, down from 22.4 percent in 1990.
While default rates for most of Virginia's public and private universities are relatively low, one-third or more of students with loans at many trade schools and academies do not pay off their loans on time.
Steve Merritt, the state Council of Higher Education manager of financial aid programs, said he expects the state's default rate to continue to drop as the economy improves.
``It's a matter of concern, but it's a moderate concern,'' he said.
About 75,000 to 80,000 Virginia students receive some kind of financial assistance, he said.
Reflecting a national trend, private trade schools had the highest rate of default.
The Portsmouth School of Beauty Culture led the Virginia list, with 53.5 percent.
Linda Pegram, director of the school, said the figure is outdated. The school no longer has a loan program, she said.
``This system just makes me sick,'' she said. ``It's such an untrue picture.''
According to Pegram, in 1992 seven students out of a total of 21 defaulted on their loans, or 33.3 percent.
The Portsmouth school was followed on the list by the Jan-Mar Beauty Academy in Newport News, 40.3 percent; and Madame Daniel's School of Beauty Culture, also in Newport News, 40 percent.
State schools that had relatively high default rates included Virginia State University in Ettrick at 23.3 percent and Norfolk State University, 21.8 percent.
At the low end, Mary Washington College in Fredericksburg was 0.9 percent, and the College of William and Mary in Williamsburg had 1.5 percent. Several smaller schools had no students in default.
Robert U. MacDonald, associate dean for financial aid at Mary Washington, said incoming students at his school are given extensive counseling related to loans.
``We have the ability to work on an individual basis with students, and I think that plays a significant part,'' he said, referring to the school's low default rate.
People who do not finish their education programs often fall behind on loan payments, said Theresa House, a spokeswoman for the Virginia Student Assistance Authorities, which guarantees $1.7 billion in loans.
``I think that generally they've fared well,'' she said of Virginia's institutions.
House said that improvements in computers have helped officials track down those in default. Wages can be garnisheed and money can be taken out of tax returns, she said.
by CNB