Edward J. struggled to make it through college. Like many, he was forced to borrow money - lots of it. Six thousand dollars, to be exact. But the struggle paid off. Five years out of college, he is a successful architect in Pennsylvania, making more than $33,000 a year.
Despite his lucrative position, Edward (not his real name) hadn't paid back a dime on his student loan through the beginning of this year. Several months ago he was notified that if he didn't begin repayment immediately, he'd find 10 percent of his weekly salary missing from his paycheck until the loan was paid off.
Edward needed no further convincing. The state now has two checks from him totaling $160 and assurances that the balance will arrive in regular monthly payments.
Spearheaded by Pennsylvania's effort, a number of states, as well as the federal government, are beginning a new crackdown on student-loan defaulters. Threats of fines and jail terms are being replaced with a spate of new laws that hit the offender where it hurts the most: in the pocketbook.
''What we're dealing with here - in the main - are mostly middle-class people who, for whatever reason, simply refuse to pay back their student loans, even though they have the means to do so,'' says Kenneth Reeher, executive director of Pennsylvania's Higher Education Assistance Agency. ''That just isn't right.''
New loan-collection techniques being tried by the states range from New York's use of lawsuits to retrieve back payments to North Carolina's tapping of state income-tax refunds.
The federal government's collection efforts are beginning in Uncle Sam's own backyard. A computer check of 10.3 million personnel records of federal workers and the names of 900,000 student-loan defaulters came up with 46,000 matches - names of federal workers who are delinquent in repaying some $67.8 million in loans.
The prize the government is after is a big one: nearly $2 billion in delinquent student loans nationwide, including nongovernment workers who are being pursued by other means.
To reclaim its due, the federal government is mobilizing on two fronts, using the Education Department as its ''muscle.'' Under the 1982 Debt Collection Act, the federal government plans this fall to start taking a 15 percent cut from the paychecks of federal workers who have defaulted. Currently, defaulters are being notified of the government's intent. And should those who are remiss in paying their debts challenge the government in court and lose, the deduction may be raised to 25 percent.
''The whole (debt-collection effort) had become a joke,'' says Jack Reynolds, coordinator of the Department of Education's Collection Task Force. ''This is our way of showing we finally mean business.''
The federal government doesn't stop there. The Education Department is also proposing a law that would direct loan checks to schools instead of students and forbid additional aid if a student is found to be in default at any school. Pennsylvania's new ''statement of claim'' law for collecting student loans is in many ways unique, but it also typifies what many states are trying to do. The Pennsylvania Higher Education Assistance Agency guarantees a loan from a private lender to a student. The student has six months after graduation to begin repayment of such a loan. If the bank cannot locate the student when the six-month period has expired, or the student is unwilling or cannot repay the loan, the Pennsylvania agency takes over responsibility for it and begins its own collection effort.
In 1978 the state was given legal authority to begin garnisheeing wages - removing a percentage of salary from the paycheck of someone in default. But the procedure, which was done through the courts, was a bit cumbersome. The cost of filing fees and an overloaded court docket bogged down the entire system. Last year the procedure was streamlined and the court's role in the process eliminated.
Still, the success of the program is difficult to gauge. Of the 1,500 defaulters notified, 400 have answered with cash. The process of docking paychecks will begin in several weeks.
The original law successfully survived a court challenge of its constitutionality (as have similar guaranteed-loan collection laws in areas involving nonstudents), and officials are confident that a suit filed against the new statute will not stand up.