High Default Rate in Student Loans

I. Introduction

A. Shorter University Background

In 1873, pastor Luther Rice Gwaltny heartened the active participants of church members in the establishment of a school for young ladies. The Cherokee Baptist Female College was opened. In 1877 the name of the school was changed to Shorter College thanks to the contributions of Alfred and Martha Shorter. Shorter was originally housed in Victorian structures located on Shelton Hill near Clock Tower Hill in downtown Rome. Thanks to the contributions from the J. L. Bass family and the J. P. Cooper family in 1910. Shorter was relocated in the schools current setting today with many updated buildings. The changes in Shorter College history in 1950s, when the school administrators and trustees made a decision to recruit the first male students. This change brought new rules of conduct, new sports team created and the “Girl’s Creed” had to be abandoned (Taylor-Colbert, 2012). Quick adjustments followed as the president of Shorter College, Randall Minor gave Georgia Baptist Convention control over the election of trustees, new faculty were hired, new library and fine arts building were constructed. From the 90’s to 2010, Shorter College faced many changes by adding Professional Programs, offering an MBA degree programs to being one of the Best 25 Southern Comprehensive Colleges and most of all on June 1, 2010 Shorter officially changed its name to Shorter University to recognize the institution’s growth. “Shorter University continues to pursue its mission to inspire students to make commitments to lifelong learning, personal spiritual values, responsible citizenship, community and societal leadership and global awareness. The university affirms its commitment to being an intentionally Christian university.” (Taylor-Colbert, 2012)

B. Problem Statement

“The number of student loan defaults has skyrocketed in recent years. This is partly due to the shift from grants to loans in Federal student aid, partly due to recessionary unemployment and underemployment, and partly due to the right of law surrounding defaults.” (Flint, 1997). This statement is as relevant today as it was in 1992. Student loan debt is once again in the headlines. The poor economy has a big impact on the job forecast of college graduates and intensified student loan burdens, but this is only part of the story. According to Flint, “the official federal defaults rates have declined over time, they have remained a problem during good and bad economic cycles. Also the official rate greatly underestimates the full scale of student debt burdens.” (Flint, 1997) In the 1990s defaulted student loans will cost the federal government at least $2 to $3 billion each year. During that same period, “the problem was viewed as a reaching crisis proportions, the time defaults were the fastest-growing line item in the