Student Loan Crackdown Targets Trade Schools

By Wolfe, Lou Anne | THE JOURNAL RECORD, September 28, 1991 | Go to article overview

Student Loan Crackdown Targets Trade Schools


Wolfe, Lou Anne, THE JOURNAL RECORD


By Lou Anne Wolfe Journal Record Staff Reporter A crackdown on loans to students attending private trade and vocational schools by the federal Student Loan Marketing Association _ Sallie Mae _ does not bode well for Oklahoma students and schools in that category, warn officials of the Oklahoma Student Loan Authority.

Sallie Mae, credit provider for the Oklahoma authority, has decreed that the authority can loan a maximum of 33 percent of its portfolio to trade school students for the 1991-92 school year. That would be down from 50 percent for the 1990-91 school year, according to Robert Vincent, authority vice president of operations.

It's a drastic move, but it was prompted by severe problems nationwide. Information culled by the authority from a report by the U.S.

General Accounting Office showed that the default rate for students attending non-collegiate schools ranged from 29 percent to 62 percent. Characteristics of the typical loan defaulter portrayed a student who attended a vocational or trade school, never completed the program, had low income, lacked a high school diploma, or was unemployed at the time of the default.

Vincent said public vo-techs never have been heavy participants in the student loan program.

"Proprietary schools have been, over the last several years particularly, very heavy participants," he said. "I don't know what kind of effect it's going to have on the schools, but it's very clearly going to limit the number of students that can attend those type schools." Vincent said in Oklahoma, the default rate for collegiate institutions averages around 12 percent, while it's a whopping 30 percent-plus for proprietary schools. "Proprietary" schools refers to private, vocational and trade schools.

"It's literally those economic facts that's causing both the federal government and private lenders in this business to re-think their position," he said. "Oklahoma's certainly not isolated, and Texas has been without a lender of last resort for almost a year." The student loan authority is Oklahoma's lender of last resort.

Vincent said he's known of 40 or 50 active lenders in Oklahoma over the last 10 years, four or five of which made a lot of loans to trade schools.

"As far as I know, we're the only ones who've been doing a large volume of them for at least the last six months," he said.

Vincent said during the last four months of the fiscal year ended June 30, 65 percent of the loans the authority made were to proprietary schools, largely because the other lenders got out of the business of making loans to students at proprietary schools.

"This is not public money. It's all private capital. It's a business decision they (lenders) have to make, so I'm not criticizing them," he said. "The programs have to operate, in our case, not necessarily at a profit, but we at least have to break even." Vincent said the 33 percent ceiling would slash by about $7 million the amount of trade school loans for the 1991-92 school year. For the 1990-91 school year, the authority loaned about $16 million for trade schools, which represented 50 percent of total loan volume.

Oklahoma was able to persuade Sallie Mae to loosen up a little from an initial ceiling of 25 percent. Vincent said the absolute ceiling for Stafford loans (formerly the Guaranteed Student Loan Program) will be 33 percent of the loan volume, while supplemental loans, for upper-class students, will be capped at 39 percent of loan volume.

The authority received applications for about $40 million worth of loans for the 1990-91 school year, but a lesser amount was disbursed due to cancellations or loans that were carried over into the next fiscal year, he said.

"The restriction on financing determines the ceiling for proprietary schools," he said. "For collegiate schools, we have sufficient funds available, or we can arrange for sufficient funds to handle all the loans we receive applications for. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Student Loan Crackdown Targets Trade Schools
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.