Students Late on Paying Loans May Have Cars Impounded

Harvard students who have failed to repay their financial loans could soon find their cars impounded by United States marshals if a confiscation program that is proving successful elsewhere spreads to Massachusetts.

The U.S. Attorney for Eastern Pennsylvania recently began confiscating cars owned by delinquent creditors in his jurisdiction, and the policy has already begun bringing in unpaid student loans, a program official said yesterday.

"By taking someone's car, we are striking right home. It is something that gets people's attention and sells them we are serious," Virginia Powel, Assistant U.S. Attorney and director of the program said.

The owners of the first 12 cars seized since the program began last week have all offered to discuss repayment, Powel said, and other car owners have volunteered repayment, apparently anticipating the loss of their cars. She estimated 125 confiscation's will take place in the next month.

The U.S. attorney for Boston said he might introduce a similar enforcement scheme if the success of his Pennsylvania counterpart continues.

"I'am keeping one eye on Philadelphia, and if they are having the success I have heard, then we might very well begin to do the same thing in the Boston area," William F. Weld said yesterday.

The Justice Department attorneys, under orders from the Reagan Administration, have begun cracking down on debtors who have defaulted on payment of their Federally Insured "Student Loans (FISL) to schools or lending institutions. A school's permission is needed before any government action against the debtors.

No Decision at Harvard

Harvard last yet to grant such permission, but if it does, alumni with cars licensed in Pennsylvania could face immediate car confiscation, Robert H. Scott, director of financial systems, said.

He declined to predict if Harvard would permit the Justice Department to track down the approximately 30,000 alumni who owe Harvard money from unpaid student loans.

In the past, government enforcement officials tried to freeze the bank accounts and confiscate the wages of delinquent aid recipients, but they are hamstrung by the inaccessibility of personal financial information. Automobile registrations, on the other hand, is a matter of public record.

"I think most of the people are able to pay and are just holding out," Robert O'Connell, U.S. Marshal in charge of the confiscation, said. He added: "Most can do it in installments, but others are just playing hide and seek with the government and costing money to all taxpayers," he added.