We investigate low energy implications of string loop corrections to s
upergravity couplings which break a possible flavor universality of th
e tree level. If supersymmetry is broken by the dilaton F-term, univer
sal soft scalar masses arise at the leading order but string loop corr
ections generically induce flavor-non-diagonal soft terms. Constraints
from flavor changing neutral currents (FCNC) and CP violation then re
quire a large supersymmetry breaking scale and thus heavy gluinos and
squarks. If supersymmetry is broken by moduli F-terms, universality at
the string tree level can only be guaranteed by extra conditions on t
he Kahler potential. A large hierarchy between the gluino and squark m
asses ensures that FCNC and CP-violation constraints are satisfied. If
the soft scalar masses vanish at the string tree level, the cosmologi
cal problems related to light moduli can be evaded. However, generic s
tring loop corrections violate FCNC bounds and require very heavy squa
rk masses (approximate to 100 TeV).