- The Washington Times - Tuesday, December 4, 2001

NORFOLK (AP) The percentage of students who defaulted on federal loans fell below 5 percent at most Virginia four-year college campuses, reflecting stricter government rules to guard against high default rates, a newspaper reported Monday.
The default rates ranged from 14.9 percent at St. Paul's College to 0.6 percent at Washington and Lee University, the Virginian-Pilot reported, citing recently released federal statistics for 1999.
At Norfolk State University, which once had among the highest default rates for Virginia universities, the rate fell from 16.3 percent in 1998 to 6.3 percent in 1999. In 1996, Norfolk State's default rate was 27.1 percent.
Nationwide, the default rate was the lowest ever 5.6 percent, down from 6.9 percent in 1998. It peaked at 22.4 percent in 1990.
Virginia's rate which includes trade schools and community and four-year colleges was 4.8 percent.
The drop means the government loses less money in unpaid loans, the schools avoid a blot on their reputations and the students are more likely to emerge with their credit ratings intact. Students are classified in default if they haven't begun repaying their loans one year after they should have.
"This year's rates show that accountability for results works," U.S. Education Secretary Rod Paige said.
In 1989, the federal government introduced tougher rules to guard against high default rates. At schools with default rates of more than 40 percent for one year or more than 25 percent for three straight years, students may be barred from federal loans or Pell grants.
"We're getting more efficient at our regulation, and the schools are watching what they're doing," said Robert M. Sine, proprietary school specialist for the state Department of Education in Richmond. "Instead of running by the seat of their pants, they're following the rules."
Norfolk State hired a default management coordinator and contracted with an agency to counsel students and to track them after they leave if they're not paying their loans, said Marty Miller, associate vice president for student affairs.
Students are told about the dangers to their credit ratings, the advantages of consolidating loans and the possibility of winning delays for repayment, Mr. Miller said.
"We wanted to be sure we could do all we can to repay student loans," he said.
The tougher rules were primarily aimed at trade, or proprietary, schools. Critics said too many were providing shoddy training, leaving students unable to find work and repay loans. Some schools complained that they were unfairly targeted and that students, not the schools, should be blamed for high defaults.
Virginia trade schools saw significant decreases. At Bryant and Stratton College in Virginia Beach, the rate dropped from 19.1 percent in 1997 to 5.2 percent in 1999.

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