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Special Report (Correspondence Schools) #241537

CBS Evening News for Tuesday, Aug 19, 1975
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(Studio) Report on collapse of loan program for correspondence schools.
REPORTER: Roger Mudd

(Chicago, Illinois) Advanced Schools Incorporated, (A. S. I.) is bankrupt. Govt. guaranteed loans in 1969 to students of A. S. I. and others. Bank loaned money. Students repaid mos. after graduation at 7% interest. Department of Health, Education and Welfare gave banks 3% interest and promised to pay loan if student didn't. A. S. I. began recruiting students and depended on selling as many promissory notes as possible to banks. In 1974, banks no longer as interested in 10% return on student loans. Defaults incrd. A. S. I. went bankrupt in January
REPORTER: Sharron Lovejoy

(No location given) [Ex-salesman A. S. I. Harold HOLLEY - says major sales representatives acted as though there was no tomorrow. Cites student deficiencies. Easy to hardsell student.]
REPORTER: Bernard Shaw

(Chicago, Illinois) A. S. I. participating banks shown as map. If fraud proved, government could call loans invalid. [American National Bank and Trust Company of Chicago Jim HERRING - says a lot of banks would be in serious financial trouble if Department of Health, Education and Welfare refuses to pay for loans. They'll pay provided loans are valid.] Fraud could exist in several areas.
REPORTER: Sharron Lovejoy

(No location given) [HOLLEY - says salesmen found forged applications to school. Husband signed application under G. I. loan when class was for wife.]
REPORTER: Bernard Shaw

(Chicago, Illinois) A. S. I. under close supervision by banks. Schools to be kept open and to save taxpayers' money. [HERRING - says Washington, DC pays for loans. Bankers didn't write legislature] House subcommittee on post-secondary education studies program.
REPORTER: Sharron Lovejoy

(DC) [Representative James O'HARA - says system should have been recognized as being open to abuse. Department of Health, Education and Welfare should have been more vigilant. Taxpayers always pay.] McMahon College television commercial shown.
REPORTER: Sharron Lovejoy

(Chicago, Illinois) If Department of Health, Education and Welfare disconts. promise of repayment, program will probably fold.
REPORTER: Sharron Lovejoy

Lovejoy, Sharron;
Mudd, Roger;
Shaw, Bernard

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