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NORTHSTAR GUARANTEE HAS LOWEST DEFAULT RATE AMONG STUDENT LOAN GUARANTEE AGENCIES

 ST. PAUL, Minn., Aug. 27 /PRNewswire/ -- Northstar Guarantee Inc., the nonprofit agency that provides loan guarantees for Minnesota students under the Federal Family Educational Loan Program (FFELP), has the lowest cohort default rate among the nation's 49 guarantee agencies, according to U.S. Department of Education information released this week.
 Northstar's reported default rate was 2.1 percent. Default rates for all 49 state guarantee agencies ranged from 2.1 percent to 36.1 percent.
 The cohort default rate is defined by the Higher Education Act as the percentage of the total number of borrowers who defaulted and had a default claim paid by the guaranty agency from Oct. 1, 1990 through Sept. 30, 1992 divided by the total number of borrowers who began repayment from Oct. 1, 1990 through Sept. 30, 1991. For the purposes of the default calculation, loans are considered in default once a claim has been paid by the guarantee agency. Only Federal Stafford and SLS loans are included in the calculation.
 "Taxpayers ultimately foot the bill for defaulted student loans, so the low default rate of Minnesota borrowers is good news for all of us in the state," said Taige Thornton, Northstar Guarantee's president and chief executive officer. Thornton attributed the low default rate to the integrity of the borrowers, the diligence of schools in counseling borrowers and the efficiency of Northstar's loan processing and collection services.
 Earlier this week, the Department of Education released default rate data for banks and lenders, post-secondary schools and individual states. Minnesota's default rate was 7.7 percent compared to a national average of 17.5 percent. The state rate is higher than Northstar's rate because other guarantee agencies also guarantee loans to Minnesota students.
 Northstar Guarantee has guaranteed nearly $400 million in loans to undergraduate students attending post-secondary institutions in Minnesota and to Minnesota residents attending post-secondary institutions elsewhere.
 -0- 8/27/93
 /CONTACT: Taige Thornton or Thom Dasher of Northstar Guarantee, 612-290-8780/


CO: Northstar Guarantee Inc. ST: Minnesota IN: FIN SU:

DB-KH -- MN002 -- 6526 08/27/93 10:00 EDT
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Publication:PR Newswire
Date:Aug 27, 1993
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