1. Promoting Responsible Management of Educational Debt
From Borrowing Wisely to Successful Repayment and Everything In Between

2. 360º of Prevention
Beyond mere default avoidance lies a more comprehensive approach.

3. Promoting Responsible Management of Educational Debt
The causes and ramifications of default are widespread and long term so the solution must be wide-range and long term too:
Perspective
Responsibility
Involvement
Commitment
Education
This “PRICE” actually engenders many benefits in addition to default prevention.

4. Perspective-A Broad View
WHO: Find out who would benefit & get them involved
WHY: WIIFMs of promoting responsible debt management
WHEN: Key times for promoting responsible behavior
WHERE: Targeted locations for promoting responsibility
WHAT: The causes of default reveal what improvements need to be made

5. Responsibility Require Responsible Behavior
Enhance financial aid appointments
Career development & financial literacy coursework
Help students manage all educational debt
Best long-term options per student situation
Insist on cooperation of departments, students, loan servicers, other schools and government
Other?

6. Reward Responsible Behavior
Praise students for handling debt well
Provide financial responsibility incentives
Send positive comments to staff/supervisor
Include positive remarks on evaluations
Benefits to schools w/CDR under 15% (3yr)
Other?

7. Consequences for Acting Irresponsibly
Deny access to diplomas, official transcripts and re-admission to the school
Notify supervisor & target for improvement if school staff not properly assisting students
Comments on staff performance evaluations
Report on DOE/servicer surveys
Sanctions to schools with CDR over 30% (3yr)
Other?

8. Involvement Include Everyone in the Solution
Students & their family/friends
Campus staff in all departments
Loan Servicers
U.S. Department of Education
Other schools
Other?

9. Commitment Promote Long Term Success
Improve efforts on retention
Accurate and timely enrollment reporting
Support students on all educational debt
Build relationships with loan servicers & collections agencies
Contact students during the Grace Period
Help in delinquency
Assistance after default
Other?

10. Accurate & Timely Enrollment Reporting
School reporting directly to NSLDS enhances accuracy and timeliness of data
Fix errors right away
Clearinghouse helps Perkins Loan borrowers
Schools & Perkins Servicers can receive enrollment data weekly from NSLDS

11. Support on All Educational Debt
Debt from attending our school and other schools as well
FSA loans (Direct, FFELP, Perkins)
Overpayments of PELL/Loans
Institutional loans
State loans
Debt owed directly to the Campus
Other?

12. Build Relationships With Loan Servicers
Get to know your regional/sector representative
Fix errors immediately
Provide updates on borrower info
Attend webinars, use reports and other tools
Use conference calls
Provide feedback to improve performance
Collections agencies
Other?

13. Servicer School Line Fax Website Email for Schools
Great Lakes
(888)
(800)
mygreatlakes.org
Navient
(888)
NON ED(800)
ED (866)
navient.com
Nelnet
(866)
(866)
nelnet.com
Fedloan
(800)
(717)
myfedloan.org
DMCS
(800)
myeddebt.com

14. Outreach During the Grace Period
Exit Counseling
Verify/update enrollment data & contact info
Notify student of available school services
School balance assistance
Remind that repayment begins in 6 months for some loans & right away for others
Provide servicer info
Help get all debts in best arrangement possible
Continuing/completing education
Other?
Provide servicer info

15. Monitor for Missed Payments
Servicer
Report Name
Website
Great Lakes
Borrowers at Risk
mygreatlakes.org
Navient
Past Due Loans – Ed
Past Due Loans - Navient
navient.com/schools/
Nelnet
Core Borrower Level Data Report
nelnetloanservicing.com/nsight/
Fedloan
Loan Portfolio Summary-Delinquent
myfedloan.org

16. Outreach to Delinquent Borrowers
Utilize a variety of contact methods to reach delinquent borrowers
Develop a plan to put the resources you have to best use
If resources are scarce, emphasize focus where greatest results are likely
Other?
Total number of borrowers in the different stages of delinquency
Missed 1st/2nd payment
Early Stage
Mid Stage
Late Stage
Staff availability, strengths and weaknesses
Access to tools
phones, , paper,
Computers, internet, skip-tracing

17. Cure Delinquency Gather information and assess situation
Create short-term (immediate cure)
Create long-term plan (future arrangements)
Contact and enact plans with ALL educational debt holders/servicers
Advocate for the borrower
Update contact info
Monitor debt status & follow-up as needed
Document progress & modify strategy as needed

18. After Default Soft default or hard default
Paying debt in full (default stays on credit record for 7 years)
Loan consolidation (default stays on credit record for 7 years)
Loan rehabilitation (9-10 months, but default is removed from credit record)
Encourage appropriate decision making
Assist with pursuing chosen option

19. Track CDR & Prepare Appeals
Get the Portfolio Report monthly
Monitor your changing total cohort #
Keep track of who defaulted in each month (CDR Date of Default, Claim Reason-DF)
Verify enrollment data, loan status, DER, grace, etc. to correct as needed & prepare for appeals
Estimate your running CDR – Great Lakes’ Portfolio Navigator is helpful with this

20. Education Provide Everyone w/ Proper Education
Proper debt management techniques
Consequences of poor debt management
WIIFMs of successful repayment
Financial Literacy instruction
Make sure school staff are good role models
Appropriate Entrance & Exit Counseling
Schools, servicers, DOE share best practices
Other?

21. Provide Appropriate Tools
Budgeting & understanding of interest accrual
NSLDS
Servicer information
Help understanding the options & processes for optimal loan arrangement
Access to telephone, printer, fax & internet access as needed
Career & retention services
Other?

22. Questions & More Best Practice Sharing
Jennifer Hoepner Director of Alumni Support Herzing University (414)