1. Default Prevention On Campus

2. Default Management Plan Develop your plan via a default management team – Representative from each office involved in delivery of aid – Senior administration & middle management – Faculty & student representative Establish goals & objectives Identify & allocate resources for plan Define default management evaluation methods Establish data collection

3. Impact of Student Retention A study compiled by Texas A&M found: Out of 13,000 students - 2% (260) of students that graduated, defaulted - 14% (1,820) of students that did not graduate, defaulted Found that background variables are not very important: – Preparedness – Demographic – Financial situation

4. Student Retention Concluded that student’s retention rates are a good indicator of their likelihood to default on loans meaning success in college is the most important indicator of default risk Students make the decision to leave school within three to four weeks – Subconscious or conscious decision – Need institutional “velcro” to touch and hold the students immediately (create affiliation) Compare what your institution spends to recruit students with the amount spent to retain them

5. Student Retention Most Common Complaints from Students: – Availability of financial aid – Course registration – Campus run-around – Concern for students as individuals – Helpfulness of financial aid counselors Top Strengths of Institutions – Knowledgeable faculty – Clear and reasonable program requirements – Approachable academic advisors – Well-maintained campus – Students experience intellectual growth – Safe and secure campus – Enjoyable student experience – Availability of faculty – Quality of instruction – Students feel welcome Noel Levitz, The 2005 National Satisfaction and Priorities Report

6. Student Retention Assess the drivers influencing retention rates: - Available Financial Aid - Support Services - Early-Alert System of withdrawals - Classes and class schedules that set students up for failure Low-income student persistence is directly & positively related to: – financial aid counseling, – career counseling, – academic counseling, & – personal counseling

7. Academic Counseling Advising Tutoring Study & time-management counseling Supplemental course instruction

8. Personal Counseling Goal setting Stress reduction Problem solving Community resource information

9. Student Misconceptions Know how much they need to borrow Will borrow only what they need Have a good idea of what they will earn after graduating Know how much they borrowed Will keep track of their loans after they leave school

10. Borrower’s Perspective Too much information during the admissions process – Can’t fully absorb entrance counseling – Need to repeat counseling several times Financial aid counselors “lecturing” does not have much impact – Recent graduate – Defaulted alumnus (credit ruined, wages garnished) – Default Prevention Staff from Guarantor – Lender

11. The Players Let the borrower know who is involved: Financial aid office Lender Servicer/secondary market Student Loan Counseling Services Guarantor

12. Registration Collect references each fall & spring – Registration isn’t complete until student gives references – References may be different each semester Financial aid staff should be available to answer financial aid questions

13. Orientation/Freshman Seminar Include money management – Credit card use – Checking account management – Upromise benefits (www.upromise.com) Distribute brief “fact sheet” about the financial aid office – Allied Medical College “Lifetime Financial Aid Counseling” – “Known point of contact”

14. Parents Present materials during orientation, parent’s weekend & sporting events General information regarding general types of student debt, typical payments required for student loans & the consequences of default Remember the Privacy Act with relations to specific student borrowing information! – Webster University: “Release of Information Authorization”

15. Career Placement Other than relevant work experience, participation in internships or cooperative education programs is the best way for college graduates to increase their employability – Facilitate internships Offer career placement services to current and former students – Ranken Technical College offers Lifetime Job Placement Unemployment is a main reason reported to cause loan repayment delinquency

16. Career Placement College students want more help from campus personnel in choosing careers and finding jobs after graduation – Job placement – Resume writing – Interview skills – Employment tips – Networking – JobGusher (www.jobgusher.com)www.jobgusher.com Noel Levitz, National Student Satisfactory Report, 2003

17. Campus Media Outreach Announcement or letter in student newspaper regarding availability of financial aid staff Article regarding debt management in student newspaper Besides unemployment, another main reason to cause delinquency - not aware of options – Income sensitive repayment – Graduated repayment – Deferment – Forbearance – Consolidation

18. Graduation Graduation announcements – Provide several free announcements for references listed – Send announcements on behalf of students Distribute direct-debit authorization forms from the borrower’s loan holder with graduation information – Demonstrate savings by using direct debit if the lender offers interest rate reduction

19. Alumni Approach Keep up-to-date demographic information for former students Mail a half-page flyer regarding availability of options if having problems repaying loans Offer a financial management seminar to alumni & spouses – Risk management – Insurance – Saving & investing (short & long term) – Tax effects

20. Other Smart Habits Allow students to keep school e-mail for up to two years in order to maintain contact Monitor attendance to prevent unofficial withdraws & counsel students Train school personnel to ask for current address & phone number if a former student calls or visits Don’t package student loans on initial award letter – If interested in loans, check here – Must request loans in person

21. Other Smart Habits Get permission to discuss student loans with parents/spouse (collect signature on award letter) Go where students are – Set up table during career fairs & placement events – Collect references while students are waiting in line – Offer money management counseling during lunch in the student union – Set up booths in high traffic areas (including outside)

22. Questions?