THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Monday, February 3, 1997 TAG: 9702030036
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY PHILIP WALZER, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: 166 lines
One of the area's largest trade schools faces expulsion from the federal student loan program after three straight years of high default rates, federal education officials say.
But the president of the school, CDI Career Education Center - formerly known as Computer Dynamics Institute - said the latest default figure is inaccurate. The school is asking the U.S. Department of Education to review the number, which, when corrected, will allow the school to stay in the program, said the president, Christine Carroll.
In recently released national default data, the Education Department reported that 25.6 percent of CDI's student borrowers defaulted on their loans in 1994.
The school's figures for the two previous years were 38 percent and 34 percent. A school is declared ineligible to continue in the loan program if its default rate exceeds 25 percent for three straight years.
CDI is the only school in Virginia the department may oust from the loan program this year, officials said.
Carroll said the school, which has 450 students, is issuing an appeal to the department saying that the figure should be 23 percent. Because of an administrative overhaul at CDI last year, she said, the school incorrectly listed some students as in default for 1994.
``There was a mistake made at our level that has caused this to occur,'' Carroll said. ``We have been working to correct it. . . . We do play a vital role in the education in this area, and we want to continue with all the successes we have.''
A U.S. Department of Education spokeswoman said CDI students will continue to be eligible for aiduntil the department rules on the school's appeal.
Among four-year colleges in Virginia, Norfolk State University had the highest rate, at 22.2 percent. That is not high enough to trigger penalties. The next-highest was Virginia Union University's 18.7 percent. Washington & Lee University recorded the lowest rate among four-year schools: 1.6 percent.
Overall, the government reported a national default rate of 10.7 percent in 1994, less than half the 22.4 percent recorded four years previously. Virginia's average for 1994 was also 10.7 percent. Education officials credited more aggressive collection procedures and tougher penalties for high-default schools.
For years, politicians and educators have debated the importance of the default numbers, particularly for trade schools, which traditionally have higher default rates than do four-year colleges.
A high default rate ``certainly should raise a flag,'' said David Breneman, a researcher in higher education finances who is dean of the Curry School of Education at the University of Virginia, which has a 2.6 percent rate.
``It means either students aren't completing the program or it means they're completing it and aren't earning enough to pay their loans off or students don't even know they've got loans - or it might say something about the general quality of the program. There could be reasonable explanations for this or questionable explanations.''
But Mark Dreyfus, president of ECPI College of Technology in Virginia Beach, which had a 14.2 percent default rate for 1994, said he believes high rates often reflect students' low family income levels and should not be held against the schools.
``I don't think default rates determine the quality of institutions,'' he said.
At Norfolk State, the problem is that loan recipients sometimes have trouble finding jobs, said Marty Miller, associate vice president for student affairs. ``They just don't have the resources they need to begin their payments the way they should.''
But he said NSU was boosting efforts to work with students - and alumni - to ensure repayment. State Education Secretary Beverly H. Sgro said: ``I don't think it is an alarming number for them. I know they're concerned about it and are going to try to get that number down even lower.''
At CDI, Carroll said the school has whittled its default rate, which was 38 percent in the previous year, with more intensive counseling of students.
The school, on Virginia Beach Boulevard, has about 450 students in programs such as dental assistant and medical office specialist, Carroll said. Tuition ranges from $6,000 to $10,000 a year, she said.
Carroll said the default numbers shouldn't overshadow the success stories the school regularly produces. Graduates like Linda Coleman of Virginia Beach.
Before she entered CDI, she said, ``I didn't know how to type, I didn't know spreadsheets, I didn't know WordPerfect.
``After I completed school (last fall), I knew all of those things and I was able to get a job in an office.''
She was hired as a secretary for a physical therapist. About six weeks later, Coleman said, she was promoted to office manager. She just started paying back her loan. ILLUSTRATION: CDI CAREER EDUCATION CENTER AND THE EDUCATION
DEPARTMENT
WHAT THE U.S. SAYS: The Education Department reported that 25.6
percent of CDI Career Education Center's student borrowers defaulted
on their loans in 1994, after years with rates of 38 and 34 percent.
Schools whose rates exceed 25 percent for three straight years are
ineligible for the loan program.
THE SCHOOL'S RESPONSE: The president of CDI Career Education Center,
in Virginia Beach, says the latest default figure should be 23
percent. She is asking the Education Department for a review and
says an administrative overhaul at the school resulted in some
students wrongly being listed as in default.
REPORTED DEFAULT RATES AT LOCAL SCHOOLS
GRAPHIC
The Virginian-Pilot
These are the numbers and percentage of borrowers who defaulted
on federal student loans in 1994, according to the U.S. Department
of Education. The schools include universities, community colleges,
trade and nursing schools.
Number of Number of Default
defaulters borrowers percentage
Suffolk Beauty Academy** 16 32
50.0%
Portsmouth School of Beauty Culture** 0 1
32.4%*
Commonwealth College 348 1,355
25.7%
Computer Dynamics Institute 80 312
25.6%
Norfolk State University 484 2,183
22.2%
Rudy and Kelly School of Hair Design 9 43
20.9%
Tidewater Tech 112 552
20.3%
Wards Corner Beauty Academy 2 12
17.6%*
Indian River Beauty Academy 2 16
14.7%*
ECPI College of Technology 192 1,352
14.2%
Hicks Academy of Beauty Culture** 0 1
13.3%*
Suffolk Public Schools/Obici 1 4
11.1%*
School of Prac. Nursing
Tidewater Community College 50 478
10.5%
Virginia Beach Beauty Academy 0 4
9.1%*
DePaul School of Nursing 3 32
9.4%
Virginia Wesleyan College 23 332
6.9%
Reporting Academy of Virginia 17 260
6.5%
Old Dominion University 147 2,295
6.4%
Sentara Norfolk General Hospital 3 61
4.9%
Louise Obici School of Nursing 1 16
4.9%*
Eastern Virginia Medical School 2 154
1.3%
DePaul School of Anesthesia 0 3
0%*
Sentara Norfolk School of Rad. Tech. 0 3
0%*
Sentara Norfolk School of Med. Lab. Tech. 0 2
0%*
Paul D. Camp Community College** 0 1
0%*
SOURCE: U.S. Department of Education
*Because total number of borrowers is small, percentage includes
numbers from previous years.
**School is no longer participating in student loan program,
according to U.S. Department of Education.
KEYWORDS: STUDENT LOAN DEFAULTS