College Loan Rules Should Remain, Officials Say
GREENSBORO (AP) - The
Reagan administration and Con
gress want to put the screws to ex
students who won't repay their
federally guaranteed student
loans by requiring more account
ability from the schools they at
tended.
But such an approach has offi
cials at many of North Caroline's
historically black institutions,
small private colleges, communi
ty colleges and trade schools wor
ried and even angry.
4 Many of thoee schools have
high default rates on Guaranteed
'Student Loons, a need-based pro
gram that is annually the largest
in the nation in terms of lending
volume.
Department of Education offi
cials said Tuesday they soon ex
pect to announce a new assault
against loan defaults, which cost
taxpayers more than $1.7 billion a
year.
Action also is expected in Con
gress.
The Senate has tacked a provi
sion onto a trade bill now in con
ference with the House that would
allow state agencies to refrise to
guarantee loans to institutions
with default rates of more than 25
percent.
Experts have said that the loss
of Guaranteed Student Loan eligi
bility would force some schools to
dose their doors.
""Whether that is true in North
Carolina remains to be seen,"
said Chancellor Edward Fort of
N.C. AAT State University. "'It's
certainly truo
nationally."
Traditionally,
colleges or
trade schools
have had little
to do with ex*
students who
don't repay
their loans.
The schools do
not have to col
lect the loans,
which are
Edward Fort
mad* by bank* or lending agen
cies. And when a student de
faults, the government pays off
the loan.
Fort said he's upset that Con
gress and the administration
want to change the rules in the
middle of the game.
"It's holding campuses ac
countable for something over
which they have little control,” he
said. "We can urge students to
pay back the loans, but that's as
fhr as are can go.
"In effect, they are saying that
when the game was first initiated,
universities were not held ac
countable and suddenly, after file
fact, they are. That is totally inap
propriate. I question the morality
of it. I resent it.”
Many agree arith Port, saying
the various proposals punish an
institution for the sins of its for
mer students.
But supporters of a crackdown
on defhults point to the rising
costs.
L«st year, the cumulative fig
ure in student loan defaults
reached $5.6 billion, rising from
$977 million eight years earlier.
The annual cost climbed from
$530 million in 1983 to a projected
$1.7 billion this year, boosting the
price tag for defaults to one of the
Education Department's biggest
spending items.
According to a recent national
J.C. Smith Invited To Seek Challenge
Grant For Endowment Building
Johnson C. Smith University is
on* of only 24 historically black
colleges which have been invited
by the Mott Foundation to seek en
dowment-building challenge
grants as part of the final phase of
the Foundation's black college
program. ,
Grants totaling more than $5
million are anticipated for this final
phaas of the Foundation's $20 mil
lion commitment to help nurture
and strengthen the field.
The Foundation expects to
make between five and 14 grants,
ranging from $350,000 to $1 mil
, lion. Announcement of those ■
grants is expected by summer.
According to Foundation Pro
gram Asaoeiata Susanna
Feurt,endowment building was
targeted following a survey of pri
1 vat#, Mack college presidents who
identified it as their moat preval
;> ent and preasing need.
"We believe the grants made
' under this program will have a
significant and lasting impact on
strengthening the long-term fi
j nandal stability and thus the edu- '
cations] missions of the institu
tions ultimately funded,” said
Fsurt. ■
In the Foundation's judgement,
these 24 colleges have demon
strated a high level of excellence
and hold the promise for signifi
cant fixture growth.”
i The new program represents a
significant departure from Mott's
earlier grant-making efforts for
black colleges. Previous efforts
were primarily modest grants for
a wide variety of project* to large
and small, public and private,
(bur-year black collages. f'
Aty Edmund*
Davidson Black
Alumni Meet
An overwhelming turnout,
marked the firet meeting of the
Charlotte-Mecklenburg Black
alumni of Davideon College.
The purpose of the initial meet
ing was to provide a format for
the alumni to become acquainted
mad promote fellowship and net
week opportunities. The group an
ticipates organising itself as a re
source to the community, address
ing the apodal interest of the Black
Afcrty Edmunds serves as the
Alumni contact for the group. She
moved to Charlotte In March,
19*7, to open the firet Carolina lo
cation of Temporaries, Inc., a na
tional temporary help service. Re
cently, she addressed Davideon
seniors on "Job-Finding Tech
niques.” 8he also serves on the col
lego's Minority Community Advi
sory Board.
According to Edmunds, there
are apprcarimately 20 Black Dav
ideon graduates in this area. They
are involved within many facets
of the business community, in
cluding banking, insurance, law,
employment, as well as industry.
** A* rsV/-1 v,*WtT*
The Foundation now plans to
maximize the impact of its funds
by offering large grants to a small
er number of institutions.
The Mott Foundation has sup
ported black colleges since the late
1970's, beginning with a $1 million
grant to the United Negro College -
Fund's capital campaign. In 1979,
the Foundation made a multi
year, $20 million commitment to
he' upport black colleges.
Foundation's support of
black colleges is a natural exten
sion of its work in the fields of edu
cation and disadvantaged youth. '
In addition, they help transmit
black culture, serve as role models
for black youth and have an un
matched record of training black
professionals and leaders.
Today, there are 87 historically
black, four-year colleges and uni
versities nationwide; 88 are public
institutions, 49 are private. A1
though black colleges comprise
only three percent of all institu- -
tiona of higher education in the
United States^ they enroll nearly
20 percent of all blacks attending
four-year colleges and graduate
more than 40 percent of all blacks
with bachelor degrees.
\.',S"'',vi ’**3
Several criteria were used to
identify the 24 eligible for the en
dowment-building program, in
cluding a review of financial and
nan-financial statistics, implemen
tation of past Mott grants, site vis
its, discussions with other funders
and institutional leadership.
Proposals may request endow
ment funds for endowed faculty
support, including faculty chairs
and faculty development funds;
endowed curriculum develop
ment funds; endowed student
scholarship funds, or other special
purpoee endowments. Deadline
for proposals is January 29,1988.
survey, 84 schools In North Caro
lina havs default rates of 20 per
cent or more, including AAT,
32.74 per cent; Bennett College,
32.15 per cent; and Guilford Tech
nical Community College, 20.31
percent. ”
The survey figures cover de
faults through Sept. 30,1986.
"The reader immediately as
sumes 'what is wrong with those
schools,' That's not always the
case,” said Stan C. Broadway,
executive director of the N.C.
State Education Assistance Au
thority, an agency within the Uni
versity of North Carolina system
that is responsible for statewide
student-assistance programs.
"You've got to look at the type
of student, what the dropout rate is,
how long the program lasts. It's
far more complex than looking at
a default rate and turning around
and blaming a school."
Overall, North Carolina has a
default rate of 7.7 percent, com
pared with the national average of
12JL percent.
The survey, a joint project of
the National Conference of State
Legislatures and the National
Governors’ Association, found 34
institutions across the nation that
had default rates of 60 percent or
more and more than $1 million in
default.
In North Carolina, only Shaw
University fell into that category.
like everyone else, Shaw offi
cials say they have little control
over the payback of guaranteed
loans.
"There is a problem," said
Dennis Spellman, a consultant
brought in to guide Shaw through
a period of financial difficulty.
But "Washington ought to look at
itself and Congress ought to
change the rales without hassling
the institutions,** he said.
Spokesmen for the Department
of Community Colleges and the
UNC system agree.
. .
"To punish the institutions is
the wrong approach," said Jay
Robinson, a UNC vice president.
"I think the federal government
must bear the msjor responsibili
ty because they are the only ones
with the leverage to force anyone
to pay the loans back."
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