Connect with Students to Reduce Cohort Default Rates February 14, 2014

Agenda  Best Practices that Reduced the Cohort Default Rate. – How did we do it?  Provide Financial Education - Importance of Being Proactive.  USA Funds Tools that have Successfully Reduce Cohort Default Rate. – USA Funds Life Skills; – USA Funds Borrower Connect; and – USA Funds Borrower Connect InTouch.

Successfully Reduce the CDR – How did we do it? Educate all campus administrators and faculty on the issues and establish a task force. Identify the factors causing the institution’s cohort default rate to exceed the threshold. Who is “at risk” on your campus? Develop and implement a campus wide default prevention strategy that includes working with students while they are on campus and after they leave your institution. Establish measurable objectives and identify specific actions the institution will take to reduce the default rate and improve college completion.

Stage 1: Application and first 90 days Stage 3: Last year and Graduation Stage 2: In-School Period Stage 4: Alumni Financial Education is needed throughout the student’s experience. Counseling and orientations Communication with students after they leave the institution. Graduate and Career Counseling Financial literacy, student success and retention efforts. The Life Cycle of a Student

What is USA Funds Life Skills?  USA Funds Life Skills teaches students to manage their finances and time wisely during school and after graduation.  The program: – Provides measurable and successful financial literacy training. – Teaches students to avoid debt problems. – Reinforces the importance of repaying student loans. – Helps students stay enrolled through graduation. – Available at no cost to your institution. 9

Features and Benefits  Gives students money and time management advice and the tools they need to graduate on time, minimize their debt and take responsibility of their student loans.  Encourages better understanding of financial skills and promotes better repayment, which ultimately lowers cohort default rates.  Customizable curriculum: –Provides flexible delivery to fit existing processes.  You decide which courses you want student groups to take. –Courses can be assigned to specific student segments.  You decide which students or groups of students you want to target. –Students can complete courses on their own, in a classroom setting or using a combination of both.

USA Funds Life Skills  Topics are presented as part of a curriculum of more than 30 online courses, including: –Financial aid and paying for college.  Applying for financial aid.  Managing student loans while in school.  Repaying student loans. –School and personal life management.  Setting and achieving goals.  Managing time while in school.  Living on a budget. –Credit and money management.  Managing credit cards and debt.  Understanding credit reports and credit scores.  Setting savings goals.

USA Funds Life Skills –Graduating students.  Establishing career goals.  Estimating expected income and take-home pay.  Preparing for an interview. –Graduate students and adult learners.  Paying for a graduate degree.  Managing debt and controlling spending while in school.  Budgeting while pursuing a graduate degree. –Couples in school.  Having a life with little money.  Coping with school and a relationship.  Managing money while in school.

Best Practices  Link financial education to other on-campus events, programs and student organizations.  Make it part of the process of being a student (academics).  Don’t be afraid to make it mandatory. –“ They don’t know that they don’t know!” –“They think they already know!”  Start small and build from there.

USA Funds Borrower Connect TM  Web-based tool that helps schools connect with borrowers to improve cohort default rates and promote successful student loan repayment.  Automates borrower communication through telephone, letter and campaigns.  Aggregates data schools upload from loan servicers, National Student Loan Data System and other sources.  Creates communication campaigns that can be targeted to address borrowers in various stages of repayment.  Communications encourage borrowers to remain current on loan payments or seek assistance from lenders or servicers to restore loans to good standing. –Stock letters and templates are provided, and can be personalized with school-specific information and logos.

USA Funds Borrower Connect InTouch SM  Staffing solution that provides the benefits of borrower counseling – without the work.  Dedicated, focused resource for individually counseling borrowers about their options for repaying their loans.  Communication efforts: –Remind borrowers of their loan obligations and responsibilities. –Discuss available options and help establish an achievable and affordable repayment plan. –Ensure borrower contact information is up to date. –Promote long-term repayment success.

USA Funds Borrower Connect InTouch  Communication campaigns at different stages: –During borrower’s grace periods. –At various stages of delinquency.  Contact campaign activities include: –Both phone and contact. –Multiple attempts to contact borrowers by phone. –Three-way calls with borrower and servicer.  Access to real-time monitoring through USA Funds Borrower Connect. –All completed and ongoing campaign activities.  Reported success measures include: –Number of borrowers contacted. –Number of successful counseling sessions. –Number of grace period borrowers who make payments within first 30 days of entering repayment.

A nonprofit corporation, USA Funds ® works to enhance postsecondary education preparedness, access and success by providing and supporting financial and other valued services.