This report examines the extent to which correspondence schools participate in the Stafford Student Load Program and the rates at which students from these schools default on their student loans. It is revealed that the average borrower default rate for students attending correspondence schools was more than double the rate, 42.2 percent versus 18.3 percent, for all schools participating in the Stafford program during fiscal years 1987-89. Thirty correspondence schools were eligible to participate during this period and their students received about $743 million in student loans. However, 16 of these schools (accounting for 91 percent of the $743 million in loan volume) no longer participate in the program. It is noted that if these 16 schools are excluded, the average default rate for correspondence schools drops to 27.8 percent. Appendices include the loan volumes for students attending correspondence schools between fiscal years 1987-89; and student loan default rates for correspondence schools that participated, including those that no longer participate, in the Stafford Loan Program in fiscal years 1987-89. (GLR)