Federal Student-Loan Default Rate Drops
To Record Low, Clinton, Riley Announce
President Clinton and Secretary of Education Richard W. Riley announced last week that the default rate for the federal student-loan program dropped to a record low of 6.9 percent in the 1998 fiscal year.
Mr. Clinton, who cited the rate in an Oct. 2 speech, attributed the drop to the strong economy and tougher enforcement action against schools whose students frequently fail to pay back their loans. He also credited his administration with raising standards in high schools and improving access to college.
The default rate soared to its highest level—22 percent—in 1992. Currently, 2.2 million former students have made payments on their loans while about 150,000, or one in 14, are in default for failing to do so. Those in default can not receive other federal student aid, and their credit ratings are lowered.
—John Gehring
States May Forfeit Funding for Children’s Health
Forty-one states are expected to lose a total of more than $1.9 billion in federal money that was intended to extend health coverage to needy children.
The Children’s Health Insurance Program, or CHIP, was created in 1998 to extend health-care coverage to an estimated 11 million American children living in families whose incomes are too high to qualify them for Medicaid but not high enough to afford most private health-insurance plans.
Federal officials said late last month that the 41 states would lose the funding because they had neglected to spend it before a Sept. 30 deadline. The issue created headlines in part because one of the states is Texas, whose governor, George W. Bush, is the Republican nominee for president.
From the beginning, CHIP has been dogged by criticism that many states were too slow to enroll eligible children. Two million children have been enrolled so far.
Last week, members of Congress were considering legislative action that would let states keep part of the money, said Mary Kahn, a spokeswoman for the federal Health Care Financing Administration, which administers CHIP. Otherwise, the funds the 41 states forfeit will be transferred to the remaining nine states that exhausted their federal allotments.
—Jessica Portner
Hearing Focuses on Schools and ADHD Medications
Two members of the Education and the Workforce Committee recently heard testimony on whether some schools force parents to put their children on medications for attention deficit hyperactivity disorder.
Anecdotal evidence that has come to light lately caught the attention of two Republicans, Rep. Peter Hoekstra of Michigan, who chairs the Oversight and Investigations Subcommittee, and Rep. Bob Schaffer of Colorado.
On Sept. 29, the two were the only House members to attend a hearing in which one parent told of being bullied by her son’s school to keep him on psychotropic drugs that had changed his behavior for the worse. “What concerns me is the intimidation tactics a school can use to medicate a child,” said Patricia Weathers, a mother from Millbrook, N.Y.
Mr. Schaffer has introduced a resolution calling on members of Congress to continue to watch the issue. But so far, he said in an interview, he does not plan to pursue the matter further in the near future.
—Joetta L. Sack
