ANCHORAGE (AP) -- Officials with the state's student loan program plan to take another step beginning next month to crack down on some 37,500 borrowers who are late or who simply aren't making their payments.
For the first time in the program's decades-long history, the delinquent borrowers will be reported to credit bureaus. That will make it harder for them to borrow money nationwide.
People more than 60 days overdue in their payments represent 23 percent of the program's 163,000 loans. The delinquencies represent around $140 million.
The state each year lends about $60 million to around 14,000 Alaskans attending colleges and vocational schools, said Diane Barrans, executive director of the Alaska Commission on Postsecondary Education, which runs the program.
The borrowers are supposed to start repaying the loans within six months of ending school.
The loan office has had the authority to send the information to credit bureaus for several years but hesitated because its repayment information had some computer problems, Barrans said.
Reporting to credit bureaus probably won't get deadbeats to start paying up, but it should get the chronically late to be more prompt, Barrans said.
''They're reliable payers. It just isn't a priority for them,'' she told the Anchorage Daily News.
The state student loan program long has been plagued by a high rate of borrowers who don't take their debt seriously. But the loan office has taken steps over the past several years to boost collections.
The state can seize a Permanent Fund dividend and prevent people from renewing professional licenses if they're delinquent. The next step the loan program plans to take is to garnish wages, Barrans said.
Better collection efforts have put the program in the black the past two years and allowed it to lower interest rates for the 2000-2001 academic year to 8 percent. That's down from 9 percent two years ago, even though interest rates have risen nationally.
Information sent to credit bureaus needs to be accurate because it can affect someone's credit history for years, Barrans said.
''It can have a serious effect down the line,'' said Sharon Engle, a vice president for National Bank of Alaska.
People with bad credit histories can be denied credit cards, car loans or even home mortgages, or they can end up paying higher interest rates because they are perceived to be credit risks, Engle said.
Reporting student loans to credit bureaus also can bring some positives.
For the tens of thousands of people who are current on their loans, the credit reporting will help them establish a credit history. That will work in their favor when they buy a car or home, Engle said.
Peninsula Clarion ©2015. All Rights Reserved.