National Loan Program Starts Payment Crackdown

The National Direct Student Loan Program (NSDL), a federal financial program, will crack down this year on universities with high delinquency rates in response to Congressional criticism of a nationwide increase in delinquent loan payments, according to a spokesman in the NSDL office.

Nila Gussie, a NSDL program specialist, said yesterday that institutions with an unusually high number of overdue accounts may face sharp cutbacks in NSDL and work study grants next year.

The nationwide delinquency rate of 14 per cent has been "slightly" increasing over the past two years, Gussie said. Accounts are considered delinquent if the loan is not repaid after a nine-month grace period.

R. Jerrold Gibson '51, director of the Office of Fiscal Service, said yesterday that Harvard, with a delinquency rate of about 19 per cent, has been working for a number of years to tighten loan collection procedures, and does not plan any new procedures this year.

NSDL, a long-term loan payment program, is one of the two available to Harvard-Radcliffe students.

Although Congressional appropriations to the loan program have remained constant over the past two years, the slight delinquency increase has aroused concern in Congress about the loan collection policies, Lloyd Johnson, an education program specialist said.

He said the goal for each of the schools is to implement the "revolving concept," by which schools with excellent loan collection can sustain the loan program without new federal capital, supporting new loans with income from outstanding loans.

Columbia University, with a delinquency rate of 62 per cent in 1973-74, announced this year new guidelines to curb the high rate, according to Robert J. Cooper, assistant vice president at Columbia.

The new Columbia guidelines mainly concern students who took a year off during their undergraduate years or before going on to graduate school, and were classified as delinquent by NSDL while they were out of school.