Fun postcards instead of format letters nagging students to send money - great idea!
This is a big area of focus at my institution as well. And we have seen greater success for our grads...but strangely it has not yet directly resulted in lower default rates...so something is missing.
I'm inclined to think it is that students have not yet found value for prioritizing loan repayment. Also those in our Career Services dept. are not in the know on which students and graduates are falling behind on payments.
I'd love to hear any insights on what we could be missing and suggestions for how to improve.
Kathy,
Yes, student loan repayment is all about options, whether the option is for a more satisfactory repayment plan or a payment delay. If the students exercise their many options in the federal student loan programs, they are sure to avoid delinquency and default.
Diana Mateer
Teaching the student about their options, is the most successful way to be proactive. Letting the student know that they do have an option if they can’t pay.
David,
I am glad to hear you have gained some new ideas for your school's departments to work together in default prevention. The cooperation of school staff with different responsibilities will lead to creation and execution of the most effective dafault management plan.
Diana Mateer
i also think you have an excellent process in place. i plan to speak with our fa dept. if we can do something similar.
All students receive a personalized package at the in-school exit interview. A printout of their loans is given to them along with their servicer and servicer information (phone number and website). A loan repayment disclosure (standard repayment plan) is given to each student to give them an idea of what their payment will be. Students watch the exit interview video and take a student loan quiz. The importance of repayment is discussed and any questions answered. The exit interview guide, How To Avoid Delinquency and Default and The Consequences of Delinquency and Default literature is included in the Exit Package. Also included is my business card. Students are made aware they can call me or the school any time if they have any questions or need guidance. In-person exit interviews are given to one, to no more than three students, at a time.
Joseph,
I love the idea of incorporating financial management lessons into their classes. What a great way to continue getting the message of financial responsibility through.
Cheryl Kesson
A newly adopted practice is to incorporate default prevention and personal financial management lessons into financially oriented classes such as finance and accounting. Many students don't have a personal financial plan and don't consider the consequences of not repaying their loans in a timely manner.
Joshua,
Follow up phone calls are very effective. They make the student feel supported and aide in keeping your contact informtaion up to date. Having these phone calls at the end of their grace period or at the end of a forbearance or deferment are a great way to touch base with the student, find out their current situation and if needed you can offer assistance before a delinquency even has the chance to happen.
Cheryl Kesson
Joseph,
It is great to know that you are educating students on their options. If they run into hardships during their repayment they will be equipped with the knowledge that they have options which can prevent them from falling into delinquency.
Cheryl Kesson
Our school conducts exit strategy with students as well as phone calls to follow up on repayment or other options such as deferment. I believe that the strategy has been effective since most students have been making payments.
The FA department uses exit interviews and explains their options one-on-one. we also have a servicing agency to help with this process.
Carolyn ,
Wow--what a positive change in your CDR! Obviously your efforts are paying off. The ways you mention to help prevent default make a big difference: contact, contact, contact, and letting students know they have options other than delinquency if they cannot pay their loans temporarily. Even during deferment and forbearance, a student can make small payments to keep up with interest and make a positive impact on their loan balances.
Diana Mateer
Kimberly,
I really promote the idea that you have implemented to include a financial section, including student loan information, in the college success course you mention. That way all new students get the information early as you said. Hopefully that information will influence their financial decisions throughout their programs and be just the beginning of bright financial futures.
Diana Mateer
We currently utitlize a default management company who provides our school with reports and contacts students. We send letters to the identified delinquent borrowers and contact the employers for which they work and assist the former students in deferments and forbearances. This practice has brought our default rate from 33% to 14%.
I am in the learning process regarding financial assistance. A college success course for new students includes a newly refined section on finances - with emphasis on student loan repayment after they graduate. Since this is for new students, the process of thinking and planning their loan repayment options can be started early.
Thomas,
You have identified a key to successful default management--preventive recoveries--by arming students with information during the exit interview while in school and with grace period contact to remind them of their options, you help prevent student loan troubles before they begin. You should be able to see positive results from your grace period contact efforts in the form of reduced delinquencies.
Diana Mateer
Thomas,
It appears that the focus of your exit counseling efforts is on educating students on their repayment options. You are helping to guarantee that when students face challenges or concerns during repayment, they will be better prepared to deal with them and exercise their rights to deferment, forbearance, and flexible repayment plans. It's very rewarding to know that the students were listening during exit counseling!
Diana Mateer
Starting with the exit counseling, then the default department contacting the students before they start repayment to let them know they have options such as possible defferment, etc. We have found this to be the most helpful. Most student don't know they have any options and just go into default if they are not made aware of their options.
