Inside Today: A mini-guide to Houston, p. 4. Battalion Thursday, October 20, 1977 College Station, Texas News Dept. 845-2611 Business Dept. 845-2611 A coupon book for cheapskates, p. 6. A trip to Chicago for men’s water polo team, p. 10. A&M has lowest loan default rate By GLENN A WHITLEY Battalion Staff Aggies may be dumb, according to the perennial jokes, but at least they pay their bills. Texas A&M University has the lowest default rate on federally insured Hinson-Hazlewood loans of any other major university in the state, says an official of the Coor dinating Board, Texas Colleges and Universities. Texas A&M has an accumulative default rate of three percent in the 11 years the program has operated, 17 percent lower than the state average, said Mack Adams, head of student services for the coordinating board in a recent interview. This default rate includes accounts defaulted and ac counts presently being sued for default claims. Robert Logan, director of financial aid at Texas A&M, said one of the most important reasons the default rate was so low was the amount of counseling done with each student to make sure he understands his commitment. “Our loans are paid the day they’re made," Logan said. “We have the best student clientele in the coun try.” The type of student attending Texas A&M is probably more conservative than at most schools, and this affects the payback rate, Adams said. The curriculum is tra ditionally aimed at majors that imply stability in family income and occupation, like agriculture and engineer ing, he said. Texas A&M graduates usually have better chances of getting jobs and better starting salaries than many other schools, Adams added. Hinson-Hazlewood loans are given to students on the basis of need. They are approved by the school, and the state of Texas is the lending institution. Bonds are sold to raise money to provide the loans. Considered “large loans, these can be made for up to $1,500 per year. After a student graduates, he has a nine-month grace period, then he must begin to repay the loan in monthly installments. Hinson-Hazlewood loans have lx-en federally insured for the last six years. If a loan is defaulted, the federal government pays the state of Texas the amount of the loans, and then attempts to collect from the borrower. OTHER EDUCATIONAL loans are also federally in sured. These loans are approved by the school and then made by the student s home town bank. It is then the bank's responsibility to inform the student of his com mitment. No figures are available at present on default rates for these bank loans. Some universities have such high default rates that the coordinating board in Austin has put a ceiling on the amount of money available to lend them. Prairie View A&M University and Texas Southern University have default rates of 39 and 49 per cent re spectively. “Inability to locate is the biggest reason for defaults, Adams said. “They leave school, relatives don’t even know where they are. They never even make one pay ment.” One of the terms of the loans is that students keep their whereabouts known to loan officials after they leave school. “THE BIG PROBLEM is that the students are not employed when they get out, ” said A. D. James, direc tor of financial aid at Prairie View. “And the coordinating board is not exercising all its resources to make them repay. He said 50. per cent of the students receiving loans at Prairie View had degrees in a teaching field and could not find jobs when they graduated. He added that most of the students there come from povertv-level house holds. In Texas A&M s case, if the student doesn’t pay, the parents pay. At Prairie View, this is not possible because many of the parents are already on some sort of state assistance," he said. “Any school that is predominately black is going to have a high default rate" said La Joy Kay, acting director of financial aid at Texas Southern University. “Most of our people come from low income families.” TSU is about 90 per cent black, she said. "A lot of students don’t ever graduate and therefore can t repay, she said. TSU has a high drop-out rate of students who have taken out loans, she added. After the students drop out, they cannot get jobs that pay enough to allow them to repay the loans, Kay said. “People that do graduate usually do well in repay ment, she said. Texas A&I University is another school that has many poverty-level, Mexican-American students, but its de fault rate is only seven percent. “Historically, the Mexican-American has repaid his loans, said Juan Villarrel, director of student aid at Texas A&I. “We do keep track of our students. We do a hell of a lot of counseling. ” When they get their notices (of payment due), they do something. You don’t just ignore it (the notices),” Villarrel said. He said one of the reasons the rate was so low was that even though students had low incomes, Mexican-Americans were traditionally raised to honor debts and favors. Students can receive a hardship or employment de ferment if needed, said Adams. Notice must be sent to the proper officials requesting a postponement, how ever. CURRENTLY, 120 days after the first payment is due on an unpaid account, the Texas Attorney General’s of fice sends a letter explaining the borrower’s obligation. Another letter is sent 150 days after it is due, and if a payment is not received 180 days later, the Attorney General s office files suit against the borrower to obtain a default judgement. If such a judgement is granted, the borrower is then legally obligated to pay before selling any real property. Real property is any which requires a title when sold. After a default claim is granted, the State turns over the account to Health, Education and Welfare, (HEW), which attempts to collect through the courts if necessarv. The coordinating board has restricted the amount of lending money available to schools with high default rates. At Prairie V iew, the financial aid office has allowed less than 50 loans this year. Adams said the entire lending process has been tight ened up. Financial aid officials are now required to sign written recommendations for each borrower. Before, the official was to be responsible for carefully screening each applicant, but his written recommendation makes the responsibiltiy more specific, Adams said. School Texas A&M University Number of Loans 4,715 Total Amount $ 7,757,298 Default Rate 3% Money Lost $ 129,652 Southwest Texas University 3,574 $ 5,825,703 7rtes ‘overthrew the civilian gov- ^ nt Thursday to form a new rev- m a< ^ m inistration, official radio jfW announced. ir e " Se 'Minister Adm. Sangad | nornina l leader of a military r ik ct °her, again was the coup ’ ,he radio said, I t r L ev<,luti( > n ary administration de- ] h ( e ^° n , stituti< >n abolished and dis- 0 1 me year-old government of r,» f i nistt ’ r fan in Kraivixien and the nkcJ Parliament. ^ een ' n power just two days a year and reportedly was over- lurs day because he refused a le to reshuffle his cabinet. J V ;k ltil FV«I