I agree. Educating the potential student first is key and meeting with our Financial Services will provide them with that education as well.
Our school provides a student financial services office to provide students with information regarding payment plans, types of loans, consolidation information, and money management. They have also hosted several financial aid workshops regarding these services.
I feel that it is important that the school has a staff and resources that can help students understand the loans that they are taking out, and how they are going to have to repay them.
Here our FSO's go over everything in much detail on two different occasions to really ensure that our students understand what they are responable for.
I think that if all of the steps of the admissions process are thoroughly covered, students will have a realistic expectation of their financial obligations. Of course, guidance by FA personnel will also help minimize student defaut.
We have changed in the last few years the attitude that we approach enrollment with. We are not just enrolling to enroll anymore. Our beginning process of enrollment includes discussions on completing the course and going on to employment afterwards. We are focusing more on the employment potential afterwards in our beginning presentation. We have strengthened our career counseling center and try from the beginning to focus the student on the end possibilities. We think that by letting them have a vision of the potential results, we are strengthing the possibility of them completing and in the process of not defaulting.
We are blessed to have four well-trained student services staff members who love what they do! Their supervisors keep them up-to-date on any regulation changes and enhancements. These four individuals take their time explaining financial options to each prospective student and continuing student to make certain the student makes the best financial decision for their situation.
The most we can do in my opinion is make them aware of what to expect. Be honest. Don't sugarcoat things. Make sure people are available to discuss financial concerns, etc. Giving them the knowledge and making them aware of what to expect after graduation and the imoprtance of making sure they pay on their loans is a good start.
We feel that knowledge is powerful, you need to educate the potential student as to their cost and liability for the program of choice. A meeting with our Financial Aid Advisor will educate the student in their financial outcome. They need to be aware of their obligation and committment to their program and career. This is a powerful understanding and we all need to reinforce this during their start to finish.
I feel the most important thing that a school can do to prevent default on student loans is to make sure that a retention team in place for its students. The majority of students that default on their loans are those that do not complete their program. Retention programs within colleges/universities are critical to the success of its students. I believe that just about of attention needs to be placed on retention and completion of students as there is to the recruiting and admissions of students.
The financial aid department needs to be clear and concise when discussing the student obligations. Students need to be informed to keep an open line of communication, student loan lenders are willing to work with the students.
We practice the same FA counciling. We have several different processes in place that ensure the student understands the investment they are making in their education.
The most important thing an institution can do is review all options available to a student. I believe this topic needs to be fully discussed years prior to attending a higher learning institution. Financial planning needs and must be an intricate part of the decision.
There should be A clear understanding of when the payments start & what they are
I agree as well. So many students get caught up in the idea of getting "extra" money as part of their financial aid package. One idea to decrease the default rates is to have the career center director work with incoming students. If that individual is able to assist the student in securing a part time job through school, then they can borrow just enough to cover school related expenses only.
debt couseling and budget seminars
Schools need to provide full disclosure. Students need to full understand that taking government loans will affect their financial future in a huge way. Especially if they drop the program. Simply having them go online and read a few pages is not enough in my opinion to properly inform uneducated students of their responsibilities. A live class should be mandatory to ensure the transfer of training. This top should also be discussed as early as junior year in High school.
One of the most important things an institution can do to minimize default loans is to maintain a consistently high graduation rate. Many students come to school in order to improve their chances of finding better employment because they are currently financially unstable. Students who don't complete their education are definitely at a higher risk for defaulting because they are adding a loan payment to their already stressed finances.
I believe the most important thing is to make sure the students understand what the repayment terms of their student loans are, so they can make plans on how to repay them. The financial counseling provided to them by an institution should help them understand how to repay them.
Each of our students sits one on one with their parents/significant others and goes through a financial aid appt. The financial aid department sets aside 1 1/2 hour for each prospective student and in that time they learn not only how they are able to finance their education, but what their responsibilities will be for repayment.
