Sherry,
It’s great that you are able to meet with so many students for exit counseling! A fair amount of time may pass between the entrance interview and graduation, and with time we forget a lot of information. A strong exit counseling session helps the student re-focus on goals and priorities so that good decisions are made in preparing for repayment.
It is also helpful to follow-up with students throughout enrollment so they do not make bad choices (e.g. over borrowing or using student loan funds irresponsibly). A quick ‘touch-base’ meeting where we show the student current loan balance and projected loan total based on anticipated completion date can be eye opening.
Kellee Gunderson
We complete Entrance Counseling one-to-one and complete 80% of the Exit Counseling one-on-one. I think this strategy works well because if students have questions we talk about them during the counseling. We have had good feed back from both students and parent borrows who let us know that they really didn't understand the process until this point and were grateful that we do counseling one-to-one.
Jason,
Sending out a mailing each month after graduation is a good plan because students need consistent reminders throughout the grace period. It is too easy for students to ignore their loans until the last minute; six months goes by very fast and students will be in a much better position if they plan for repayment and take time to think critically about household budget and payment plan options.
Kellee Gunderson
We hold effective one on one Exit counseling and work with a third party servicer to send out mailing each month after they are gone.
Wanda,
Just last week we had a forum question about whether dedicated default prevention teams have been effective for other participants. Your experience of seeing this work matches feedback we have received from many FA offices: having a dedicated staff member or department makes a noticeable difference in both delinquency prevention and in the level of service provided to students.
We agree that exit counseling is an excellent resource for students who remain in attendance long enough to participate. However, we would also suggest that schools have a strategy for reaching out to borrowers who drop out or attempt to disappear before formal exit counseling can take place. These students may be facing life obstacles that prevent them from completing school, and those same obstacles make them a clear default risk. If we can connect with these students in a helpful and non-judgmental way, we can assist them with repayment options and perhaps even leave a good impression that they will eventually return to our school.
Kellee Gunderson
Our institution stresses entrance and exit loan counseling. We also have a default prevention department within our corporation. There are always students who default, but this seems to be working well so far.
Cristela,
I wish I had the opportunity to meet with someone one-on-one when I was in college. Even more important than entrance counseling, however, I wish they had continued to touch base with me as the semesters progressed so they could demonstrate how my balance was growing and what effect this would have on my monthly payments. It is easy for students, particularly if their program of study requires several terms, to think about each loan or each disbursement in isolation – I need this amount of money right now to cover tuition and pad my income. They do not fully grasp the ‘big picture’, but meeting with students several times throughout enrollment will lower this risk… Can you make small interest payments? Do you need the full award amount this year? Students need to understand that every decision matters.
Kellee Gunderson
The financial advisors use entrance and exit interviews as a way to assist borrowers to avoiding delinquency. I think that this is an effective strategy because it gives the advisor one-on-one time with the student in order to explain information and give their financial perspective or advice.
Sparky,
I know many former students who would have benefited greatly from this approach. Many of us enrolled in college when the prevailing mentality was to borrow as much as possible, either to eliminate the need to work part-time or (worst-case scenario) to use the excess loan funds for vacations, shopping, and other non-essentials. Too many of us were willing to ignore the reality of student loan debt and received a great shock when finally confronted with large monthly payments and the realization that those payments must continue for over a decade. If we had been smarter about our early decisions, we would not have felt as much pain after graduation.
Also, whenever possible we should be encouraging students to apply for scholarships and work study to further decrease the amount they need to borrow. Many high schools do not teach students how to locate grant and scholarship resources, so many students either assume they don’t qualify for this type of aid or have no idea where to look. This is especially true for students who did not perform as well academically – the unfortunate reality is that some high schools focus on the high achievers they assume to be ‘college bound’, and are less effective at helping other students understand their options.
Kellee Gunderson
When students enroll, we encourage them to pay as much as possible down and to make payments while in school to reduce their student loan balance on graduation. That w2ay they will be in the habit of paying before their student loan starts and their balance will be more manageable.
Laura,
This is a great suggestion! If a dependent student has difficulties down the road, the family will be there to help. Fully understanding payment plans and deferment options can be a bit overwhelming, so the more people present to absorb the information, the more likely they will be to remember it later on.
Also, parents can work with students to create personal budgets and model how to successfully manage their finances.
Kellee Gunderson
We are a vocational school and many of our students are dependent. One practice we have is to Strongly (with emphasis) encourage students bring their parents with them to an FA meeting, not just their paperwork/signatures. This way there is a chance of better understanding and accountability for the students.
Marjie,
Thank you for two great points!
If a student is past due on loans from a previous school, it is very important to help them through the deferment process. Once the collection process starts, it does not matter to the borrower which debt a specific collection call applies to - the student may give up on all loans and allow everything to fall into default.
It is also important for FA staff to be fully versed in all payment plan and deferment options, so that we can help students make the best choices possible. In the past, there was a public perception that vocational colleges pushed forbearances to maintain lower default rates; we are doing a great job of changing that perception. Because we care about the success of our students, we help them plan for repayment and help them navigate whatever difficulties arise in their financial lives. This is not just true within the cohort measurement period, but for the life of their loans.
Kellee Gunderson
Our FA department helps students that are deliquent or in default by walking them through the process of deferment and/or Forebarance. (depending on what they qualify for) We also do this even if the students' loan is not for our institution. We also have a 3rd party administrator that helps students avoid deliqunecy & default.
We created a Exit Counseling Seminar, and we bring a banker to answer loan questions
Dr. Manuel,
It is great that you take the time to understand each student’s individual needs. In the past, schools were too quick to push forbearance and easy postponement options, when reduced payments might have been more appropriate. For federal loans, we recommend making small interest payments throughout enrollment so that interest does not capitalize- this is one way that students can learn to plan for monthly bills and acquire good habits. Likewise, your students make payments from the start of their enrollment and you can praise them for sticking to a payment plan and working out a smart household budget.
Kellee Gunderson
Our school opened last year and currently provides financing while until we become fully accredited to qualify for federal aid. We provide students with options or alternatives to keep up with their monthly payments. The options are tailored to the student particular situation and may include short term deferrals, reduced payment etc.
Donn,
Your students are fortunate to have such a high level of access to you throughout enrollment; this is a model that we can all learn from. FA offices that take the time to build relationships rather than relying on form letters and impersonal communication will be better able to offer support when students need help. Also, building good rapport early in the program will benefit students who leave prior to completion and may be even less prepared for repayment.
Kellee Gunderson
Although our students receive award letters, disclosure letters, entrance counseling, loan disbursement letters, and exit counseling, I feel the most helpful is the fact that a personal relationship is developed between myself and each borrower. I let them know they can call me if they have any questions at all and are unsure of what to do. Although the exit counseling is thorough, I know the most effective part is if I can get the student moving toward repayment during their grace period. Even so, I still get a good number of calls as the students' grace periods are ending and they want to know what to do. Because our school is small and I see each student every day and talk to each one at least once a week during their attendance, I feel it is easier for them to call for help. I assure they know how to access NSLDS and how to contact their loan servicer(s) and I help them complete any actions needed.
