As Default Rates Fall, HBCUs Face No Sanctions
WASHINGTON — The nation’s student loan default rate has fallen to its lowest level since the federal government began collecting data in 1987.
The 8.8 percent default rate for 1997 was down nearly a 1 percent from the previous year, and it represents the seventh consecutive decline from a high of 22.4 percent in 1990. U.S. Sec. of Education Richard W. Riley hailed the decrease, citing the department’s vigilance in combating the problem. For the second straight year, default rates declined among every major sector in higher education, including public and private two- and four-year institutions as well as for-profit trade schools.
Historically Black colleges and universities also fared well in the report, Education Department officials reported. Some had voiced concern that HBCUs could face default sanctions following this year’s end of a federal policy that automatically exempted HBCUs from default penalties.
Instead of blanket protection, Education Department officials said they would review the default progress of Black colleges and tribal colleges on a case-by-case basis.
Only “a fraction” of the more than 100 HBCUs had default rates that could place them at risk of sanctions, department officials.
However, the institutions had submitted acceptable default management plans and took other steps to show that they did not warrant penalties, department officials reported.
Schools could lose the right to participate in financial aid programs for three-year default rates above 25 percent or a one-year rate of 40 percent or more.
Children’s Defense Fund Says Youths Still At Risk
WASHINGTON — The economy is booming and the federal government is reporting progress in reducing welfare, but many U.S. children remain at risk — even if their parents hold down full-time jobs.
That is the theme of a new Children’s Defense Fund report that contrasts the booming U.S. economy with the plight of low-income children at future educational risk.
“If we do not help those most vulnerable in our society now, while the economy is good, when will we?” asks Marian Wright Edelman, the fund’s president.
Overall, 13.5 million children lived in poverty during 1998 — including 3.2 million who lived in families where at least one parent held a full-time job. The poverty rate among working families is the highest in 24 years the government has collected such data, the fund says.
Welfare rolls also are down since enactment of a 1996 reform law that encouraged work. But, as the fund’s analysis notes, many of these working families do not earn enough to escape poverty — defined as earnings of less than $13,000 a year for a three-person family.
“With such prosperity, it is disgraceful that this nation is not doing more to leave no child behind and end child poverty for all of America’s children,” Edelman says.
The report recommends a higher minimum wage plus more help for families to find affordable childcare, education and job training and transportation assistance.
Students Warned to Beware of Paying for Financial Aid Assistance
