During the last 20 years more than 2,500 NIU recipients of the Guaranteed Student Loan have neglected their loan payments resulting in more than $8 million in defaulted funds.

Former college students defaulting on their GSLs has become a recent concern for some institutions nationwide because if their default rate exceeds 20 percent, they will be eliminated from all federal student aid programs, Financial Aid Director Jerry Augsburger said.

Augsburger said a recent proposal by Secretary of Education William Bennett states any school which has a default rate of more than 20 percent could be cancelled from the program.

owever, NIU is not in any apparent danger of being dropped from the program, Augsburger said.

According to the Illinois State Scholarship Commission data, prior to Oct. 1, 1986, 7.1 percent of NIU borrowers of the GSL defaulted on their loans, ISSC spokesman Bob Clement said.

This is a result of 36,834 cummulative borrowers receiving the GSL while 2,603 of the recipients did not meet their loan payments, Clement said.

Cummulatively, 6.1 percent of guaranteed funds were defaulted by NIU recipients, Clement said. He said the total amount guaranteed to NIU recipients was $138,990,388 while $8,417,255 still has not been paid back.

e said Illinois State University has a total borrower default rate of 7.2 percent, and 6.5 percent of the total dollars has not been paid back.

The University of Illinois has a lower rate of defaulted recipients at 4.8 percent with 3.6 percent of the dollars still to be paid, Clement said.

“Illinois is not in any serious trouble,” Clement said. “There is a relatively small number of schools close to the 20 percent mark compared to the number of schools there is (in the nation),” Clement said.

For the last two years some GSL defaulters did not receive their federal income tax because the ISSC utilizes this method to get people to make loan payments, Clement said. Withholding the tax is pending approval by legislation in order for its continuation, Clement said.

The cut-off at 20 percent in Bennett’s proposal is based on data from the two previous years. The data from the ISSC was computed during the past 20 years, Clement said.

Augsburger said if Bennett’s recommendation is activated, there would be a lot of lobbying against the proposal. He said he does not believe Bennett’s recommendation will be activated.