6B Northwest Arkansai TIMES, Sunday, Oct. 6, , ARKAKtAl Find Dreams Turned Into Financial Nightmares Easy Credit Lures Ma ny Students Into Trap *^^* _ . . . ,, Â·,.__,' i mi. _ /-*..,, .. n .,i nn ,i 01 11 limit T nÂ»ri H of ail It rat a ^iiniilrl t'Anrih g 1 orr(Â«l itl i i'n ch mnrnÂ« hn^ 1st nriniToiir'n i'filivapw hill IliPRO pffnrlil f,O COllBCt HI'S UI1SUCCC By RICHARD J. MALOY TIMES Washington Bureau WASHINGTON -- The lure or easy credit, which lias enmeshed many an unwary Individual, is snaring another kind of victim these days. Youths socking higher education in pursuit ot the Arheri- ;can dream of a good job and B secure future ara the latest to f a l l in the debt Imp. When they emerge from college or vocational school, these young people often find their dream has turned into a nightmare because they are saddled will) educational debts of $5.000 to $7,500 which must be repaid. Increasing numbers ot them are defaulting on these debts, Â«":"Â·Â· ,, Â· Â· GflSjj-GIl Since most of the educational lonns are underwritten by the taxpayers, public pressure is forcing Uncle Sam to redouble efforts to collect. The young man or woman who attempts to avoid repayment, is apt to find himself hauled into Federal Court by a United States attorney, and having his wages or property attached, just as would be the case if he defaulted on a commercial loan. The easy credit trap, which thousands of young students have fallen into, a well-intentioned approved nearly i by Congress and caused by program decade ago Ihe rapidly *TM The Guaranteed Student Loan Program WHV, but started In Â« small ..,,,, ..... grew like Topsy. In the past nine years It has made 57 billion worth of loans to some :our million students. About one million loans involving $1 billion will be made during the current academic year. As education costs have -creased, the size ot average default rate would reach whopping 24.3 per cent. The compares to a 2.5 per cent default rale on loans mada commercial finance companies. Testifying before the subcommittee, Jay Evans, president of the National Council ot Pro- sur- annual loan Seven years has ago Higher grams, Education Loan said he was not also grown, the average prised at the default rate. student borrowed only $750 to see him through tha academic year; today the average "We are lending to a young borrower of uncertain future, legislative changes but la moving ahead with tough new regulations to insure that sin- dents know what they are getting into when they lake out education collection and that are beefed About 70 per cent of the loans under the program go to students attending universities, colleges and j u n i o r colleges; but these students account for only about 42 per cent of the rising costs of higher education today. PROGRAM CREATED It was in 1965 that Congress created the Guaranteed Student Loan Program with the intention of helping middle-income families send their children to college. Under the program the student borrows money bank, savings and loa credit union or his school; the federal government guarantees repayment to the lender and pays the interest while the student is enrolled; and no payments must be made until after subsidy, is $1,214. LOAN The law $7,500 for students undergraduate $10,000 ' dents. pondence courses; but theso students account for 57 per cent 1 of loan defaults. Half of all students at such institutions who get loans f a i l to repay them. New federal rules are expected to crack down on granting of loans for education institutions whore repayment records have been poor. Meanwhile Uncle Sam is stepping up his effort to collect past due loans. efforts to collect arÂ« unsuccessful, the bank submits a claim to the government and is reimbursed by the taxpayers for thÂ« full amount of the loan. Federal officials then begirt collection efforts which Include locating debtor youths through IRS records if necessary; a series ot collection letters; n personal chat between a federal agent and the defaulting student and finally -- barring some jus- A student is required to start ' t i f i a b l e reason for a repayment making payments on his cduca- Â· delay -- the case is turned over a U.S. attorney for legal !Â«* Controversial Sign Tins sfgn In front of n yet to be opened service station at 1600 N. College Ave. is causing considerable controversy. The sign contains 249.5 square feet of space when city ordinance permits signs of only 75 square feet. Osage Oil Company, which installed t h e sign, recently won a Wash- ington Circuit Court challenge of the legality of the city's sign control Ordinance. The city is appealing the lower court decision to the Supreme Court. City officials said Osage did not obtain a permit from ttie city for installation of the sign. (TIMES- photo hy Ken Good) Group Consumer Asks Delay Of APL Hearing LITTLE ROCK (AP) -- Arkansas Consumer Research asked the state Public Service Commission Friday to postpone the hearing on the Arkansas Â· Power Â£ Light Co. request for a $36.5 million rate increase. ACR asked for a delay until Nov. 18 because it will then have free services of a lawyer which it said it would lack on Oct 21. when the hearing scheduled to begin. The group said it had made a diligent effort to complete written testimony but, without adequate funds, could not do so by the deadline Monday. It asker that the deadline be put back to Nov. 4. To deny the petition, ACt said, would be discrimination against it "because of wealth." Fred Cowan, who is director of the consumer group, said he believes no one else will raise the matters ACR intends to raise at the hearing. Cowan's group is expected ti ask the PSC to begin a nev rale concept of charging a fla . rate for 'all electricity con sinned. The existing system rates allows those who use In most electricity to pay less pe kilowatt hour than those wh . ute the least electricity. This rate system is based o Diplonvatie Talks WASHINGTON (AP) -- President Ford held a breakfast conference with Egyptian Foreign Minister Ismail Fahmi today about the continuing' Middle East peace negotiations; Secretary of State Henry A. Kissinger, who will leave Tues- ay for a new round of person- l' diplomacy in the Middle ;ast, took part in the hour-long iscussion, as did Air Force taj. Gen. Brent Scowcroft. n ord's deputy assistant for in- ernational affairs. he fact that the cost of delivering large amounts of elec- ricity are less per kilowatt lour than the cost of delivering .mail amounts of electricity. For example, a one-mile power line to any residence would cost about the. same as a one- mile power line to any industri- plant, but the cost per-kilowatt-hour in the delivery of electricity would be more for delivery to the home, since it would use much less than an industrial operation would. Associated Industries of Arkansas, meanwhile, filed a petition with the PSC urging that electric service continue to be based on the cost of providing the energy to the consumer. A departure from this pattern, the petition said, would "result in unreasonable discrimination favoring those purchasers of electrical energy whose use contributes most to the cost of providing electrical energy and service." IF YOUR DOCTOR SAYS YOU HAVE NERVE DEAFNESS . , . SHOWN TWICt THE ACTUAL SIZE THIS IS ALL YOU WEAR! Miracle-EarÂ® may he all you need to hear clearly again. It fits entirely in your ear. Ideal for 7 out of 10 who can still hear but have trouble understanding words. Try it today. Come in, phone, or write, Office Hours 9 a.m.-4 p.m. Mnn.-Fri. Sat. by appointment only NORTHWEST ARKANSAS HEARING AID CENTER Faycttevllle Professional Blrfg. 2100 Green Acres Rd. Fiyeiteville, Ark. Phone 4)3-4050 till W. Walnut Rogers, Ark. Phone 6:16-7933 MARY E. MARTIN, Owner Serving fh* hard of hÂ«*rlng In Arkansas for 14 y*m tional loan within a year of gra- go to students at private trade ment obligation is often years $10,000 for graduate degree stu bursement. With these program liabilities in any student loan When they emerge with their credit personnel are quite surprised that the recovery records certificate, many students have are as good as they are." CHANGES SOUGHT Evans and other witnesses who testified before the subcommittee recommended a number of changes to tighten up the program. The law work for new legislation which mittee the default rate is now ' is likely to make major changes must come from a family with Education, which runs the pro- Pants and Top Sale! 100% Polyester Â· Fall Colon and Patterns SHIELD OF SAVINGS Your favorite casual wear . . . great looking, easy care pants and tops . . . priced to let you buy several sets. AH in 100% polyester in fashion colors. Shells are short sleeve, mock turtle neck, and zip back. In white, brown, navy, red or gold. S, M, L. Pants ara pull on style in solids, patterns and prints. Sizes 8 to 16. Moderate Sportswear--DILLARD'S-First Floor WKWrioH (J Now. . .Three Convenient Ways To Charge These two poputer credit rarcte pfui your DHK rd's credit card .. 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