ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, March 28, 1996 TAG: 9603280046
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: MIKE HUDSON STAFF WRITER
Alliance Tractor Trailer Training in Wytheville and Salem-based National Business College had the worst records in Western Virginia for student defaults on federal education loans, according to the latest government figures.
New River and Virginia Western community colleges ranked just behind the two for-profit schools in default rates.
The U.S. Department of Education said 19.1 percent of former Alliance students failed to repay their federal student loans in 1993.
That was slightly higher than the default rates for National Business College (17.2 percent), New River Community College in Dublin (16.9 percent) and Virginia Western in Roanoke (16.8 percent).
The average default rate for all colleges and trade schools in Virginia is 11.8 percent. Virginia Tech's rate is 3 percent and Radford University's rate is 2.8 percent.
Federal education officials say student-loan default rates are an important measure of the quality of education a school provides. The better the education and training, they say, the more likely students will be able to get good jobs and have the income to repay their loans.
Officials with community colleges and for-profit trade schools disagree. They argue that their students are more likely to default because they generally have lower family incomes and savings before they enroll. Their students also tend to be older, and are more likely to have families and bills to pay.
``I don't think it's a measure of quality,'' said Joe Sheffey, financial aid director at New River Community College. ``It's a measure of the type of students you have.''
Sheffey said his school's default rate may be a reflection of the New River Valley's weak economy in recent years, which has made it harder for former students to find good jobs. He said the rates should go down now that the area is enjoying strong job growth.
Mark Pressley, director of Alliance Tractor Trailer Training, said nearly 99 percent of his students get jobs as truckers, and their average salary is just under $30,000 a year.
"Some people are not going to pay their loans regardless of whether or not they're employed," Pressley said. "Our clientele is not the typical college-type student. A lot of them have not finished high school. A lot of them are used to doing everyday, layman-type work. They haven't been trained in personal finance."
David Hanson, Virginia Western's student services director, said the college recommends that students borrow money for tuition only as a last resort. "We can't make them pay back the loans," he said. "We don't have the means or the authority to do that."
Linda Roach, institutional development director at National Business College, said the college was pleased its default rate dropped from 23.8 percent in 1992 to 17.2 percent in 1993. "We were hoping it would be a little bit lower, and we anticipate it will be even lower next year."
National and state default rates have dropped as federal officials have cracked down on ex-students who don't repay and schools with high default rates.
Schools with default rates of 25 percent or more three years running can be kicked out of the federal loan program. None of the Western Virginia schools face ejection, but nearly 20 institutions in other parts of the state - mostly cosmetology schools - exceeded the 25 percent mark in 1993.
LENGTH: Medium: 68 lines ILLUSTRATION: GRAPHIC: Chart by staff: Student loan default rates.by CNB