Student Loans: Default Rates at Historically Black Colleges and
Universities (Letter Report, 01/21/97, GAO/HEHS-97-33).

Pursuant to a congressional request, GAO updated the information it
previously reported on default rates at historically black colleges and
universities (HBCU), focusing on the: (1) dollar amount of major federal
student loans made to students at HBCUs and non-HBCUs; (2) most current
default rates and the dollar amounts of the defaults, aggregated by kind
of school, such as 2-year or 4-year, public or private, for student
borrowers previously enrolled at HBCUs and non-HBCUs; and (3) number of
HBCUs that could lose their eligibility, in fiscal year (FY) 1998, for
federal student loan programs because of default rates exceeding the
statutory threshold.

GAO found that: (1) of the $26.2 billion in federal student loans made
in FY 1995, $731 million, about 3 percent, in loans were made to
students attending HBCUs; (2) this percentage has remained steady during
FY 1991 through FY 1995; (3) for FY 1993, the average loan default rate
for HBCUs was 21.1 percent, but the average for non-HBCUs was 7.2
percent; (4) these percentages remained relatively the same throughout
FY 1991 through FY 1993; (5) in FY 1992, the most current year that the
dollars in defaulted student loans could be measured, HBCUs averaged
defaults of $464,209 and non-HBCUs averaged $119,307; (6) this
difference was primarily because the aggregate default rate for HBCUs
was about three times as great as the rate for non-HBCUs; (7) whether
compared by kind of school or student enrollment, HBCUs had higher
default rates and larger dollar amounts of loans in default per school
than non-HBCUs; and (8) if the default rates for HBCUs remain the same
for FY 1994 through FY 1996 as they were for FY 1991 through FY 1993, 22
HBCUs could lose their eligibility for federal student loan programs in
FY 1998, after their exemption from default rate requirements expires.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-97-33
     TITLE:  Student Loans: Default Rates at Historically Black Colleges 
             and Universities
      DATE:  01/21/97
   SUBJECT:  Student loans
             Loan defaults
             Black colleges
             Colleges/universities
             Loan repayments
             Government guaranteed loans
             College students
IDENTIFIER:  National Direct Student Loan Program
             Federal Family Education Loan Program
             Federally Insured Student Loan Program
             
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Cover
================================================================ COVER


Report to the Ranking Minority Member, Committee on Economic and
Educational Opportunities, House of Representatives

January 1997

STUDENT LOANS - DEFAULT RATES AT
HISTORICALLY BLACK COLLEGES AND
UNIVERSITIES

GAO/HEHS-97-33

Loan Defaults at HBCUs

(104855)


Abbreviations
=============================================================== ABBREV

  FDL - Federal Direct Loan
  FFEL - Federal Family Education Loan
  HBCU - Historically Black Colleges and Universities

Letter
=============================================================== LETTER


B-275208

January 21, 1997

The Honorable William L.  Clay
Ranking Minority Member
Committee on Economic and
 Educational Opportunities
House of Representatives

Dear Mr.  Clay: 

Historically Black Colleges and Universities (HBCUs) have a long
history of providing higher education to black students.  The first
HBCUs were established before the Civil War.  After the war, the
establishment of HBCUs gradually continued; as of fall 1994, 104
HBCUs serve about 281,000 students (see app.  I).  In 1965, the
Congress stressed the importance of HBCUs, stating that "historically
Black colleges and universities have contributed significantly to the
effort to attain equal opportunity through postsecondary education
for Black, low-income, and educationally disadvantaged Americans."

Our earlier reports pointed out that HBCUs participating in federal
student loan programs generally experienced high default rates, with
nearly one-third of HBCUs exceeding the statutory default
threshold.\1 HBCUs have been legislatively exempt from the statutory
threshold requirement that schools with high default rates lose their
eligibility to participate in federal student loan programs.  But the
exemption is to expire on July 1, 1998.  When the exemption expires,
many HBCUs with high default rates for student loans could lose their
eligibility to participate in federal student loan programs.  Such a
loss could make it difficult for students to pay the cost of
attending HBCUs. 

In this report, we respond to your request to update the information
we previously reported on default rates at HBCUs.  As agreed with
your office, our objectives were to

  -- determine the dollar amount of major federal student loans made
     to students at HBCUs and non-HBCUs;

  -- identify the most current default rates and the dollar amounts
     of the defaults--aggregated by kind of school, such as 2-year or
     4-year, public or private--for student borrowers previously
     enrolled at HBCUs and non-HBCUs; and

  -- estimate the number of HBCUs that could lose their eligibility,
     in fiscal year 1998, for federal student loan programs because
     of default rates exceeding the statutory threshold. 

Our universe of schools comprises 98 HBCUs\2 and 3,209 non-HBCUs,
including those that (1) are 2-year or 4-year and public or private
schools and (2) the Department of Education has reported as current
participants in the Federal Family Education Loan (FFEL) and William
D.  Ford Direct Loan (FDL) programs.\3 The 98 HBCUs represent about 3
percent of our universe of 2-year or 4-year public or private schools
in the FFEL and FDL programs.  We relied on Department information
for (1) overall student loan dollars through fiscal year 1995, (2)
the most current default rates for student loans for HBCU and
non-HBCU schools during fiscal years 1991-93, and (3) actual dollars
defaulted in fiscal year 1992.  Although we did not verify the
accuracy of data obtained from the Department, its databases are
readily available and can be used by the education community for
similar analyses.  We conducted our review between May and October
1996 in accordance with generally accepted government auditing
standards. 


--------------------
\1 Student Loans:  Default Rates at Historically Black Colleges and
Universities (GAO/HRD-93-117FS, Aug.  19, 1993) and Default Rates at
HBCUs (GAO/HEHS-94-97R, Mar.  9, 1994). 

\2 The Department currently recognizes 104 HBCUs, but we excluded 6
from our review because default rates were not available for them. 
In addition, since all HBCUs are 2-year or 4-year public or private
schools, we excluded from our universe of non-HBCUs all schools in
the Department's database that are less than 2-year or proprietary. 
But data on proprietary schools are included in table 1 and app.  IV
to provide a broader perspective. 

\3 These schools were reported by the Department of Education's
Default Management Section in the fiscal year 1993 official
statistics for the cohort default rate. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Of the $26.2 billion in federal student loans made in fiscal year
1995, $731 million (or about 3 percent) in loans were made to
students attending HBCUs.  This percentage has remained steady during
fiscal years 1991-95. 

For fiscal year 1993, the average loan default rate for HBCUs was
21.1 percent, but the average for non-HBCUs was 7.2 percent.  These
percentages remained relatively the same throughout fiscal years
1991-93.  In fiscal year 1992, the most current year that the dollars
in defaulted student loans could be measured, HBCUs averaged defaults
of $464,209 and non-HBCUs averaged $119,307.  This difference was
primarily because the aggregate default rate for HBCUs was about
three times as great as the rate for non-HBCUs.  Whether compared by
kind of school or student enrollment, HBCUs had higher default rates
and larger dollar amounts of loans in default per school than
non-HBCUs. 

If the default rates for HBCUs remain the same for fiscal years
1994-96 as they were for fiscal years 1991-93, 22 HBCUs could lose
their eligibility for federal student loan programs in fiscal year
1998, after their exemption from default rate requirements expires. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Title IV of the Higher Education Act of 1965, as amended, authorized
the Department of Education to bar postsecondary schools with high
"cohort default rates" from continuing to participate in federal
student loan programs.\4 The cohort default rate is a percentage that
results from two parts:  (1) a school's student loan borrowers who
are supposed to repay the loan in a fiscal year, divided by (2) those
borrowers who default by the end of the following fiscal year.\5 For
example, if 100 students from a school were scheduled to begin
repaying their loans in fiscal year 1993 and 25 defaulted on their
loans by the end of fiscal year 1994, the school's fiscal year 1993
cohort default rate would be 25 percent. 

Each year, the Department assesses a school's eligibility on the
basis of its three most recent available cohort default rates.  In
fiscal year 1996, eligibility was based on default rates for fiscal
years 1991, 1992, and 1993.  A school remains eligible if its cohort
default rate is below the statutory threshold, currently 25 percent,
in at least 1 of the latest 3 consecutive fiscal years.  A school
becomes ineligible if its default rate equals or exceeds the default
threshold in all 3 fiscal years. 

Students get federal loans from two major programs:  the FFEL and FDL
programs, each providing both subsidized and unsubsidized loans. 
Loans made under FFEL are provided by private lenders and are
ultimately guaranteed against default by the federal government. 
Loans made under FDL are provided through schools, and the Department
services and collects loans through contractors.  FDL was originally
authorized by the Higher Education Amendments of 1992 (P.L. 
102-325).  Since the first loans under FDL were made in the fourth
quarter of fiscal year 1994, the fiscal year 1995 cohort will be the
first cohort that could be affected by FDL defaults. 

In addition to the cohort default rate threshold specified in the
Higher Education Act, the Department has established--through
regulation--a default reduction initiative that includes default rate
thresholds applicable to all schools, including HBCUs.  One provision
of the initiative specifies that if a school has a default rate
exceeding 20 percent, it must submit to the Department a default
management plan for implementing specific measures for reducing the
rate.  Another provision allows the Department to start procedures to
limit, suspend, or terminate a school's participation in all title IV
federal student aid programs if the school's cohort default rate for
a single year exceeds 40 percent.  The exemption from the statutory
threshold for HBCUs does not extend to these provisions. 


--------------------
\4 Student borrowers are in default if they fail to make any
scheduled payments on their loans for (1) 180 days, if repayment is
made monthly, and (2) 240 days, if repayment is made less frequently. 

\5 If less than 30 student borrowers at a school repay their loans in
a given year, the cohort default rate is the percentage of student
borrowers who repaid their loans in the most recent 3 years, but who
defaulted by the end of the fiscal year after repayment. 


   HBCUS ACCOUNT FOR A SMALL PART
   OF FEDERAL STUDENT LOANS
------------------------------------------------------------ Letter :3

The federal loans to students at 98 HBCUs represent 2.96 percent of
our universe of 2-year or 4-year public or private schools
participating in the FFEL and FDL programs.  The federal government
provided about $26.2 billion in student loans through the two
programs in fiscal year 1995, of which $731 million (2.8 percent) was
loans to students attending HBCUs.  Since fiscal year 1991, the
amount of loans to students at HBCUs has consistently accounted for a
small part of all such loans made to postsecondary students (see fig. 
1). 

   Figure 1:  Percentage of Total
   FFEL and FDL Dollar Amounts
   Awarded to HBCU Students,
   Fiscal Years 1991-95

   (See figure in printed
   edition.)

Although the total share of federal student loans to HBCU students
has remained small during fiscal years 1991-95, the dollar amount of
these loans has increased by about 97 percent, from $372 million to
$731 million (see fig.  2). 

   Figure 2:  Dollar Amount of
   loans Under FFEL and FDL to
   Students Attending HBCUs,
   Fiscal Years 1991-95

   (See figure in printed
   edition.)

Note:  The 1994 amount includes $1.5 million under the Federal Direct
Loan (FDL) program. 


   AGGREGATE DEFAULT RATES FOR
   HBCUS AND NON-HBCUS SHOW LARGE
   AND CONSISTENT DIFFERENCES
------------------------------------------------------------ Letter :4

In each fiscal year, from 1991 through 1993, the aggregate cohort
default rate for HBCUs was about three times as high as the rate for
non-HBCUs.  There was little variation in the rates from year to
year, with HBCU rates ranging from 21.1 to 22.3 percent and non-HBCU
rates from 6.9 to 7.4 percent (see fig.  3). 

   Figure 3:  Aggregate FFEL
   Default Rates for HBCUs and
   Non-HBCUs, Fiscal Years 1991-93
   Cohorts

   (See figure in printed
   edition.)

For the various types of schools, HBCU default rates are lowest among
4-year private schools (20 percent in fiscal year 1993) and highest
among 2-year private schools (42.5 percent) (see table 1).  Compared
with non-HBCUs, HBCUs had higher default rates for all kinds of
schools (public, private, 4-year, and 2-year) and in each fiscal year
from 1991 through 1993. 



                                Table 1
                
                Comparison of FFEL Default Rates by Kind
                   of School for HBCUs and Non-HBCUs,
                      Fiscal Years 1991-93 Cohorts

                                                FFEL default rates (in
                    School                             percent)
----------------------------------------------  ----------------------
Kind                                       No.    1991    1992    1993
--------------------------------------  ------  ------  ------  ------
HBCUs
----------------------------------------------------------------------
4-year public                               40    21.7    22.2    21.4
4-year private                              49    21.4    21.8    20.0
2-year public                                6    33.4    24.4    23.8
2-year private                               3    52.9    38.8    42.5

Non-HBCUs
----------------------------------------------------------------------
4-year public                              518     5.9     6.3     6.0
4-year private                           1,310     5.0     5.7     5.5
2-year public                              942    14.1    14.3    14.4
2-year public                              439    12.7    12.5    12.6
Proprietary\a                            2,086    26.3    23.3    21.8
----------------------------------------------------------------------
\a There are no HBCU proprietary schools. 


   HBCUS HAVE LARGER DOLLAR
   AMOUNTS IN DEFAULT PER SCHOOL
   THAN NON-HBCUS
------------------------------------------------------------ Letter :5

The total number of student loan dollars in default per school
averaged nearly four times higher at HBCUs than at non-HBCUs.  In
fiscal year 1992, the last year for which complete data on defaulted
amounts were available, HBCU defaults averaged $464,209 compared with
$119,307 for non-HBCUs (see table 2).  This was primarily the result
of default rates being about three times as great for HBCUs as for
non-HBCUs.  The average borrower in default at HBCUs or non-HBCUs had
nearly the same amount in default--
$4,084 at HBCUs, $4,091 at non-HBCUs. 



                                Table 2
                
                 Selected Characteristics for HBCUs and
                   Non-HBCUs, Fiscal Year 1992 Cohort

                                                                  Non-
Selected characteristic                                  HBCUs   HBCUs
------------------------------------------------------  ------  ------
Number of schools                                           98   3,209
Borrower default rate                                    22.3%    7.4%
Avg. dollars in default per school                      $464,2  $119,3
                                                            09      07
Avg. dollars in default per borrower                    $4,084  $4,091
Avg. borrowers in default per school                       114      29
Avg. borrowers repaying loans per school                   510     393
Avg. 1994 fall enrollees per school                      2,788   4,412
Defaulted borrowers as percentage of enrollees            4.1%    0.7%
Borrowers in repayment as percentage of enrollees        18.3%    8.9%
----------------------------------------------------------------------
Note:  The fiscal year 1992 cohort was the latest year for which the
amount of dollars in default was available. 

For both HBCUs and non-HBCUs, the average dollars in default for
4-year schools was higher than that for 2-year schools.  For example,
in the fiscal year 1992 cohort, defaulted dollars for 4-year HBCUs
was $491,083 and for 2-year HBCUs, $165,243 (see app.  II). 

In addition, to determine whether larger 4-year schools might have
lower default rates but higher dollar volumes in default,\6 for the
1992 cohort, we analyzed default data by size of school enrollment. 
We found that at HBCUs, larger schools had lower default rates and
much higher volumes of dollars in default than smaller schools.  At
non-HBCUs, larger schools had nearly the same default rates as
smaller schools, but much higher volumes of dollars in default. 
However, for both the larger and smaller schools, HBCUs had
significantly higher default rates and more dollars in default than
non-HBCUs.  (See app.  III.)

In analyzing student loan dollars in default compared with loans in
repayment, we found that the dollar default rate for HBCUs, in fiscal
year 1992, was 19.7 percent.  This compares with a dollar default
rate for proprietary schools of 19.1 percent and for all other
non-HBCUs of 5.6 percent.  (See app.  IV.)


--------------------
\6 In our analysis of default rates by enrollment size, we defined
smaller schools as those with enrollments of less than 5,000 students
and larger schools as those with enrollments of greater than or equal
to 5,000 students. 


   OVER 20 PERCENT OF HBCUS COULD
   LOSE STUDENT LOAN ELIGIBILITY
------------------------------------------------------------ Letter :6

If the high default rates for the fiscal years 1991-93 cohorts
persist, 22 of the 98 HBCUs (over 20 percent), after their statutory
exemption from default rate requirements ends in July 1998, could
become ineligible for continued participation in federal student loan
programs.  The 22 schools had cohort default rates of 25 percent or
more in those 3 fiscal years.  Given fall 1994 enrollments, about
29,000 (11 percent) of HBCU students attended these 22 HBCUs.  During
fiscal year 1995, students attending the 22 schools received about
$80 million in federal education loans.  (See table 3 for these and
other possible outcomes under current law and varying default rate
thresholds.)



                                Table 3
                
                Varying Default Rate Thresholds at Which
                 HBCUs Could Lose Eligibility for FFEL
                   Participation in Fiscal Year 1998

                                             HBCU loan
                            HBCUs that       volume in   Percentage of
Percentage at default       could lose     fiscal year      total HBCU
rate threshold\a           eligibility            1995     loan volume
------------------------  ------------  --------------  --------------
25                                  22     $80,030,772            10.9
30                                  11      10,163,511             1.4
35                                   6       5,380,842             0.7
40                                   1       2,280,123             0.3
----------------------------------------------------------------------
\a Default rates are based on fiscal years 1991-93 cohort data, which
are the most recent available.  If the legislative exemption expires,
cohort data from fiscal years 1994-96 are likely to be the most
recent data available for determining eligibility to participate in
federal student loan programs in fiscal year 1998. 

High default rates could also have other effects on a number of
HBCUs.  By regulation, the Department requires that schools with
default rates exceeding a 20 percent threshold must submit a default
management plan for reducing their default rates.  HBCUs are not
exempt from this requirement.  For the fiscal year 1993 cohort, 53
(54 percent) of the 98 HBCUs had default rates above 20 percent.  In
comparison, 221 (7 percent) of the 3,209 non-HBCUs had default rates
exceeding 20 percent. 

Further, the Department may limit, suspend, or terminate school
participation in all title IV federal student aid programs if cohort
default rates exceed 40 percent for a single year.  For the 1993
cohort, 7 HBCUs and 17 non-HBCUs exceeded the 40 percent threshold. 
According to Department of Education officials, of the 17 non-HBCUs,
14 no longer participate in FFEL and 3 are contesting their default
rates through the Department's appeal process.  Of the 7 HBCUs, 1
recently terminated its participation in title IV student aid
programs because it lost accreditation; the other 6 may continue to
participate because the Department has not initiated actions to
limit, suspend, or terminate these schools' participation because of
their high default rates. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

The Department of Education reviewed a draft of this report and had
no comments. 


---------------------------------------------------------- Letter :7.1

Copies of this letter will be provided to appropriate congressional
committees, the Secretary of Education, and other interested parties. 
If you have any questions or would like to discuss this report
further, please contact me on (202) 512-7014.  Major contributors
include

Joseph J.  Eglin, Jr., Assistant Director; Daniel C.  Jacobsen;
Robert B.  Miller; and Charles M.  Novak. 

Sincerely yours,

>Carlotta C.  Joyner
Director, Education and
 Employment Issues


HISTORICALLY BLACK COLLEGES AND
UNIVERSITIES, BY STATE, KIND OF
SCHOOL, AND ENROLLMENT
=========================================================== Appendix I

HBCUs included in
the review          State               Kind of school      Fall enrollment 1994
------------------  ------------------  ------------------  --------------------
Alabama A&M         Ala.                4-yr. public               5,543
University

Alabama State       Ala.                4-yr. public               5,037
University

J.F. Drake State    Ala.                2-yr. public                768
Technical College

Miles College       Ala.                4-yr. private              1,068

Oakwood College     Ala.                4-yr. private              1,534

Selma University    Ala.                4-yr. private               206

Stillman College    Ala.                4-yr. private               913

Talladega College   Ala.                4-yr. private               976

Trenholm State      Ala.                2-yr. public                785
Technical College

Tuskegee            Ala.                4-yr. private              3,322
University

Arkansas Baptist    Ark.                4-yr. private               225
College

Philander Smith     Ark.                4-yr. private               841
College

Shorter College     Ark.                2-yr. private               282

Univ. of Arkansas   Ark.                4-yr. public               3,823
at Pine Bluff

Howard University   D.C.                4-yr. private              10,115

Univ. of the        D.C.                4-yr. public               10,599
District of
Columbia

Delaware State      Del.                4-yr. public               3,381
University

Bethune-Cookman     Fla.                4-yr. private              2,345
College

Edward Waters       Fla.                4-yr. private               782
College

Florida A&M         Fla.                4-yr. public               10,084
University

Florida Memorial    Fla.                4-yr. private              1,320
College

Albany State        Ga.                 4-yr. public               3,062
College

Clark Atlanta       Ga.                 4-yr. private              5,193
University

Fort Valley State   Ga.                 4-yr. public               2,823
College

Interdenominationa  Ga.                 4-yr. private               398
l Theological
Center

Morehouse College   Ga.                 4-yr. private              2,992

Morehouse School    Ga.                 4-yr. private               164
of Medicine

Morris Brown        Ga.                 4-yr. private              1,894
College

Paine College       Ga.                 4-yr. private               721

Savannah State      Ga.                 4-yr. public               3,253
College

Spelman College     Ga.                 4-yr. private              1,977

Kentucky State      Ky.                 4-yr. public               2,563
University

Dillard University  La.                 4-yr. private              1,675

Grambling State     La.                 4-yr. public               7,610
University

Southern            La.                 4-yr. public               9,904
University and A&M
College at Baton
Rouge

Southern            La.                 4-yr. public               4,302
University at New
Orleans

Southern            La.                 2-yr. public               1,267
University at
Shreveport-
Bossier City

Xavier University   La.                 4-yr. private              3,463
of Louisiana

Bowie State         Md.                 4-yr. public               4,896
University

Coppin State        Md.                 4-yr. public               3,380
College

Morgan State        Md.                 4-yr. public               5,766
University

University of       Md.                 4-yr. public               2,925
Maryland Eastern
Shore

Lewis College of    Mich.               2-yr. private               245
Business

Harris-Stowe State  Mo.                 4-yr. public               1,757
College

Lincoln University  Mo.                 4-yr. public               3,512

Alcorn State        Mo.                 4-yr. public               2,742
University

Coahoma Community   Miss.               2-yr. public                969
College

Jackson State       Miss.               4-yr. public               6,224
University

Mary Holmes         Miss.               2-yr. private               327
College

Mississippi Valley  Miss.               4-yr. public               2,182
State University

Rust College        Miss.               4-yr. private              1,055

Tougaloo College    Miss.               4-yr. private              1,105

Barber-Scotia       N.C.                4-yr. private               432
College

Bennett College     N.C.                4-yr. private               655

Elizabeth City      N.C.                4-yr. public               2,099
State University

Fayetteville State  N.C.                4-yr. public               4,109
University

Johnson C. Smith    N.C.                4-yr. private              1,413
University

Livingstone         N.C.                4-yr. private               836
College

North Carolina A&T  N.C.                4-yr. public               8,136
State University

North Carolina      N.C.                4-yr. public               5,692
Central University

Saint Augustine's   N.C.                4-yr. private              1,673
College

Shaw University     N.C.                4-yr. private              2,432

Winston-Salem       N.C.                4-yr. public               2,915
State University

Central State       Ohio                4-yr. public               2,763
University

Wilberforce         Ohio                4-yr. private               976
University

Langston            Okla.               4-yr. public               3,408
University

Cheyney State       Pa.                 4-yr. public               1,357
University of
Pennsylvania

Lincoln University  Pa.                 4-yr. public               1,371

Allen University    S.C.                4-yr. private               256

Benedict College    S.C.                4-yr. private              1,501

Claflin College     S.C.                4-yr. private              1,023

Denmark Technical   S.C.                2-yr. public                840
College

Morris College      S.C.                4-yr. private               889

South Carolina      S.C.                4-yr. public               4,693
State University

Voorhees College    S.C.                4-yr. private               716

Fisk University     Tenn.               4-yr. private               872

Knoxville College   Tenn.               4-yr. private               728

Lane College        Tenn.               4-yr. private               667

LeMoyne-Owen        Tenn.               4-yr. private              1,436
College

Meharry Medical     Tenn.               4-yr. private               726
College

Tennessee State     Tenn.               4-yr. public               8,180
University

Huston-Tillotson    Tex.                4-yr. private               613
College

Jarvis Christian    Tex.                4-yr. private               382
College

Paul Quinn College  Tex.                4-yr. private               667

Prairie View A&M    Tex.                4-yr. public               5,849
University

Saint Phillip's     Tex.                2-yr. public               6,571
College

Southwestern        Tex.                4-yr. private               182
Christian College

Texas College       Tex.                4-yr. private               262

Texas Southern      Tex.                4-yr. public               10,078
University

Wiley College       Tex.                4-yr. private               584

Hampton University  Va.                 4-yr. private              5,769

Norfolk State       Va.                 4-yr. public               8,667
University

Saint Paul's        Va.                 4-yr. private               763
College

Virginia State      Va.                 4-yr. public               4,007
University

Virginia Union      Va.                 4-yr. private              1,525
University

University of the   V.I.                4-yr. public               3,095
Virgin Islands

Bluefield State     W.Va.               4-yr. public               2,609
College

West Virginia       W.Va.               4-yr. public               4,519
State College

HBCUs excluded
from the review

Bishop State        Ala.                2-yr. public               4,511
Community
College\a

Lawson State        Ala.                2-yr. public               1,920
Community
College\a

Fredd State         Ala.                2-yr. public                190
Technical
College\a

Concordia           Ala.                2-yr. private               435
College\a

Hinds Community     Miss.               2-yr. public                964
College, Utica
Campus\b

Clinton Junior      S.C.                2-yr. private                53
College\a
--------------------------------------------------------------------------------
Note:  The number of HBCUs included in the review is 98; the number
excluded is 6. 

\a This HBCU has not been a participant in the Federal Family
Education Loan (FFEL) program and, therefore, the Department of
Education's default rate report for the fiscal year 1993 cohort
contained no information for it. 

\b The Department's default rate report for the fiscal year 1993
cohort contains data for Hinds Community College, but default data
for the Hinds Utica Campus are not separated out.  According to a
vice-president of the college, this campus is the portion of Hinds
Community College that is recognized as an HBCU.  Therefore, for
review purposes, Hinds Community College was considered a non-HBCU. 


COMPARISON OF SELECTED
CHARACTERISTICS AT 4-YEAR AND
2-YEAR HBCUS AND NON-HBCUS, FISCAL
YEAR 1992 COHORT
========================================================== Appendix II

                                        4-year schools  2-year schools
                                        --------------  --------------
                                                  Non-            Non-
Selected characteristic                   HBCU    HBCU    HBCU    HBCU
--------------------------------------  ------  ------  ------  ------
Number of schools                           89   1,828       9   1,381
Borrower default rate                    22.0%    6.0%   30.8%   14.0%
Avg. borrowers in default per school       120      34      54      23
Avg. borrowers in repayment per school     544     568     174     161
Avg. dollars in default per school      $491,0  $162,7  $165,2  $61,20
                                            83      15      43       3
Avg. dollars in default per borrower    $4,101  $4,758  $3,085  $2,720
Avg. 1994 fall enrollment per school     2,935   4,667   1,339   4,046
Borrowers in default as a percentage      4.1%    0.7%    4.0%    0.6%
 of all enrollees
Borrowers in repayment as a percentage   18.5%   12.2%   13.0%    4.0%
 of all enrollees
----------------------------------------------------------------------

COMPARISON OF SELECTED
CHARACTERISTICS AT 4-YEAR HBCUS
AND NON-HBCUS, BY SCHOOL
ENROLLMENT, FISCAL YEAR 1992
COHORT
========================================================= Appendix III

                                            Larger         Smaller
                                         enrollment\a    enrollment\b
                                        --------------  --------------
                                                  Non-            Non-
Selected characteristic                   HBCU    HBCU    HBCU    HBCU
--------------------------------------  ------  ------  ------  ------
Number of schools                           17     474      72   1,303
Borrower default rate                    20.4%    6.1%   23.3%    6.0%
Avg. borrowers in default per school       259      91      87      14
Avg. borrowers in repayment per school   1,271   1,503     372     236
Avg. dollars in default per school      $1,148  $424,9  $335,9  $68,41
                                          ,151      65      42       9
Avg. dollars in default per borrower    $4,427  $4,673  $3,871  $4,875
Avg. 1994 fall enrollment per school     7,556  13,566   1,843   1,430
Borrowers in default as a percentage      3.4%    0.7%    4.7%    1.0%
 of all students
Borrowers in repayment as a percentage   16.8%   11.1%   20.2%   16.5%
 of all students
Percentage of total HBCU or non-HBCU     49.2%   77.5%   50.8%   22.5%
 enrollment
----------------------------------------------------------------------
\a "Larger enrollment" includes schools with fall 1994 enrollments of
greater than or equal to 5,000 students. 

\b "Smaller enrollment" includes schools with fall 1994 enrollments
of less than 5,000 students. 


FEDERAL FAMILY EDUCATION LOANS
(FFEL) IN REPAYMENT AND DEFAULT,
BY KIND OF SCHOOL, FISCAL YEAR
1992 COHORT
========================================================== Appendix IV

                                            Dollars in
                                             millions
                                          --------------
                                                          Percentage of
                                              Loans           total
                                          --------------  --------------
                                                                          Dollar
                                                                          defaul
                                                                          t rate
                                                                             (in
                                          Repaym  Defaul  Repaym  Defaul  percen
Kind of school                               ent       t     ent       t      t)
----------------------------------------  ------  ------  ------  ------  ------
HBCU                                       $ 228    $ 45     2.8     7.0    19.7
Non-HBCU, proprietary                      1,134     217    13.8    33.6    19.1
Non-HBCU, all others                       6,853     383    83.4    59.4     5.6
================================================================================
Total                                     $8,215    $645   100.0   100.0     7.9
--------------------------------------------------------------------------------
Note:  The Department of Education's database provided information on
fiscal year 1992 dollars in repayment and in default for only 5,670
of the 5,855 schools in our universe of schools, as follows:  HBCU,
97 of 98; Non-HBCU, proprietary, 1,988 of 2,086; Non-HBCU, all
others, 3,585 of 3,671. 


*** End of document. ***