National Education Corp. : U.S. Asks for Plan on Student Loan Defaults

Twenty-one of National Education Corp.’s 53 post-secondary schools had student loan default rates in 1987 of at least 20%, according to a recently released report from the U.S. Department of Education.

The federal government said it would require those 21 schools to submit plans on how they will lower the number of students defaulting on future guaranteed student loans.

Eleven of the 21 schools had default rates of 30% or more. On Oct. 1, those schools will be restricted from releasing student loan funds to first-time borrowers until the student has gone to class for a minimum of 30 days.

Crackdown Under Way

National Education spokesman Jerry Derloshon said the company did not have a copy of the department’s report and therefore could not comment on the findings. National Education is the nation’s largest for-profit training company.

The Department of Education has recently begun to crack down on vocational schools with high default rates in an effort to reduce the $1.8 billion in defaulted loans each year.

Nationally, the default rate was down slightly in 1987 to 17% from 21% a year earlier.

Several of National Education’s schools--which had default percentage rates in the 50s and 60s in 1986--also saw decreases.

For instance, the company’s school in Atlanta went from a 63.3% default rate in 1986 to 44.8% in 1987. The Atlanta school’s defaults were the highest of National Education’s 53 training centers.

National Education schools in Torrance and Los Angeles had default rates of 42.9% and 42.6% respectively.

National Education did not have any facilities among the 10 schools with the highest default rates in Orange County.

Career Academy of Beauty in Seal Beach was No. 1 on that list, with a default rate of 46%.

STUDENT DEFAULT RATES AT COUNTY SCHOOLS

Fiscal 1987 School City % Defaulting Career Academy of Beauty Seal Beach 46.0 Academy of Radio Broadcasting Huntington Beach 31.0 S. Calif. College of Medical-Dental Anaheim 27.9 Careers Grace Beauty School Anaheim 27.3 Dental Technology Institute Orange 26.6 Bryman Center Anaheim 26.1 Golden West College Huntington Beach 25.6 Criss College Anaheim 24.7 Tri-City Beauty College Garden Grove 23.2 Irvine College of Business Irvine 22.2 National Institute of Technology Anaheim 22.1 Orange County Business College Anaheim 21.6 Rancho Santiago College Santa Ana 21.5 Word Processing Computer School Anaheim 20.5 Pacific Christian College Fullerton 20.4 Saddleback College Mission Viejo 20.1 Fullerton College Fullerton 19.2 Pacific Travel School Santa Ana 19.0

Source: U.S. Department of Education

STUDENT DEFAULT RATES AT NATIONAL EDUCATION CORP. SCHOOLS

Fiscal 1987 School Location % Defaulting National Institute of Technology Homewood, Ala. 30.7 Bryman Campus Phoenix, Ariz. 10.7 Arkansas College of Technology Little Rock, Ark. 22.4 Bryman Center Torrance 42.9 Bryman Campus Long Beach 42.6 Bryman Campus Los Angeles 38.3 Skadron Business San Bernardino 30.8 Bryman Center Rosemead 29.6 Bryman Campus San Francisco 29.6 Bryman Center Anaheim 26.1 Bryman Campus Canoga Park 24.3 National Institute of Technology Anaheim 22.1 Sawyer School Sacramento 18.3 Sawyer School Los Angeles 16.6 Bryman Campus San Jose 16.6 Sawyer School Anaheim 6.5 Temple School Campus Washington 37.0 Bauder College Ft. Lauderdale 10.8 Brown Institute Ft. Lauderdale 2.1 Tampa Technical Institute Tampa, Fla. 2.0 Bryman Campus Atlanta 44.8 Bryman Campus Oak Park, Ill. 30.8 National Institute of Technology Des Moines, Iowa 15.6 Kentucky College of Technology Louisville, Ky. 17.1 Bryman Campus Brookline, Mass. 20.5 National Institute of Technology Livonia, Mich. 34.0 National Institute of Technology Wyoming, Mich. 10.5 Brown Institute Minneapolis 14.6 National Education Center-Kansas City Kansas City, Mo. 39.0 RETS Campus Nutley, N.J. 15.2 National Institute of Technology Cuyahoga Falls, Ohio 20.6 National Institute of Technology Oklahoma City 0.0 Thompson Institute Harrisburg, Pa. 24.4 Allentown Business School Allentown, Pa. 19.8 Vale Technical Blairsville, Pa. 10.3 Rhode Island Trades Shops Providence, R.I. 19.6 Bryman Campus Houston 33.4 National Institute of Technology Dallas 29.3 National Institute of Technology San Antonio 19.5 National Institute of Technology Cross Lanes, W. Va. 20.7

Source: U.S. Department of Education