Default Rates at Historically Black Colleges and Universities.Report as inadecuate

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In a study requested by Senator Paul Simon and Representative Edolphus Towns, updated information on student loan default rates at Historically Black Colleges and Universities (HBCU) were obtained and examined. In particular the study compared 1991 default rates with earlier years, updated estimates of HBCUs that might lose Federal Family Education Loan (FFEL) Program eligibility, and estimated the numbers of HBCUs with cohort default rates over thresholds for Department of Education initiation of sanctions. The data for the study were from fiscal years 1988 through 1991. Findings include the following: (1) more recent default rates had little impact on estimates of the number of HBCUs that might become ineligible for FFELs as these still indicate that about 33 of 104 could lose their eligibility in July, 1994; (2) estimates show that 41 schools with default rates of 25 percent or more could be subject to state review of their continuing eligibility for student aid under title IV, an improvement on earlier estimates of 62 schools; and (3) about two-thirds of 104 HBCUs had fiscal year 1991 cohort default rates above 20 percent, triggering possible Department of Education sanctions requiring those institutions to analyze causes of their students' defaults and requiring them to describe their efforts to reduce defaults. (JB)

Descriptors: Black Colleges, Eligibility, Federal Aid, Financial Support, Higher Education, Loan Default, Student Loan Programs, Trend Analysis

Author: Morra, Linda G.


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