Harvard students who fail to repay their government-insured loans on time after graduation will face a stricter University policy, and possibly a private collection agency, under new federal regulations in effect this fall.

In the past the University waited as long as a year before turning default loan accounts over to the federal Office of Education, but the new law requires Harvard to begin federal collection procedures four months after a payment is missed, R. Jerrold Gibson '51, director of the Office of Fiscal Services, said yesterday.

Credit Risks

The Office of Education will then turn those delinquent accounts over to a private collection agency, to be selected in December, and the borrowers may find their future credit ratings jeopardized, he said.

The loans affected by the new regulations are offered through the Federal Insured Student Loan Program, under which state and private institutions use their own money to offer federally-insured loans.

Although the "overwhelming majority" of Harvard students pay back their loans on time, about 7 per cent do not, Gibson said. This figure is below the national average but still causes problems for the University, he added.

About 35 per cent of last year's undergraduates, and about 7 per cent of last year's GSAS students, received some sort of student loan, and most of those were federally insured loans, Gibson said.