1. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 A Road to CDR Reduction: Traveling to Lower Rates

2. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Cohort default rates have decreased FY 2011 Official Cohort Default Rate FY 2012 Official Cohort Default Rate

3. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 610,956 borrowers defaulted during the FY 2012 cohort period

4. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 As of July, 6.9 million Americans with student loans hadn’t sent a payment to the government in at least 360 days. Wall Street Journal, 2015

5. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Whether your cohort default rate increases or decreases, default management is a necessity to ensure all student loan borrowers are successful in repayment and avoid the negative consequences of delinquency and default.

6. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Look Beyond the Percentages 289 Default in 2011 301 Default in 2012 240 Default in 2013 7.1% Cohort Default Rate 11,600 borrowers who entered repayment in 2011 830 11,600 Fabulous University has a 7.1% CDR

7. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Look Beyond the Percentages 322 Default in 2011 285 Default in 2012 223 Default in 2013 13.6% Cohort Default Rate 6,100 borrowers who entered repayment in 2011 830 6,100 Marvelous University has a 13.5% CDR

8. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Look Beyond the Percentages Fabulous UniversityMarvelous University Number of borrowers in default:830 Number of borrowers in repayment:11,6006,100 Default rate:7.1%13.6%

9. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Agenda Knowing where you’re headed Tracking where your rates are trending Picking your destination Identifying your target borrowers 1 Packing the right resources Conducting outreach 2 3 Using GPS tools Locating unknown borrowers 4 Utilizing trip advisors Using resources 5

10. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 TRACKING WHERE YOUR RATES ARE TRENDING

11. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Draft Rates Do not wait until you receive your draft rates to begin thinking about default prevention Track your rate throughout the year – Monthly – Quarterly

12. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 CDR Timing FY2012 cohort period – Borrowers entered repayment between 10/1/11 and 9/30/12 and defaulted between 10/1/11 and 9/30/14 FY2013 cohort period – Borrowers entered repayment between 10/1/12 and 9/30/13 and default between 10/1/12 and 9/30/15 FY2014 cohort period – Borrowers entered repayment between 10/1/13 and 9/30/14 and default between 10/1/13 and 9/30/16 FY2015 cohort period – Borrowers entered repayment between 10/1/14 and 9/30/15 and default between 10/1/14 and 9/30/17

13. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Which Cohort Period(s) Should You Track? FY2012 FY2013 FY2014 FY2015

14. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 What to Track Data needed – Number of borrowers already in default – Number of borrowers 240 up to 270 days delinquent – Number of borrowers in repayment

15. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Step 1 – How to Track 19 borrowers defaulted in 2014, 2015, 2016 6.5% Current Cohort Default Rate 289 borrowers entered repayment in 2014 19 289 2014 CDR

16. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Step 2 – How to Track 19 defaulted borrowers + 34 borrowers (240 or more days delinquent) in 2014, 2015, and 2016 18.3% Projected Cohort Default Rate 289 borrowers entered repayment in 2014 53 289 2014 CDR

17. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Save Your Borrowers Once you determine how many borrowers in your cohort could impact your CDR, try to save them Utilize delinquency reports to obtain borrower demographic data – NSLDS DELQ01 report – Loan servicer reports

18. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 IDENTIFYING YOUR TARGET BORROWERS

19. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Types of Targeting Proactive targeting – Withdrawals – Graduating – In-grace At-risk targeting – Non-completion – Incurring high balances – Defaulting

20. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Conduct a Defaulted Borrower Analysis Enables you to develop specific strategies to help students avoid default Allows you to correct ineffective practices throughout your institution Enables you to identify high risk students Helps you to analyze the relationship between loan default and student success

21. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Who’s Most Likely to Default Late registrant Transfers/reverse transfers Not meeting satisfactory academic progress Low GPA Withdrawals Required to take development classes First-time students Received GED Excessive debt

22. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Why Are They Defaulting Understand the “why” – Financial issues – Relationship issues – Dependent care – Transportation – Health issues – Poor study habits – No campus connection

23. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Why Are They Defaulting Understand the “why” – Lack of employment opportunities? – Multiple loans—confusion? – Excessive financial obligations? – Lack of family support?

24. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Analyze Your Defaulted Borrowers Obtain a Loan Record Detail Report (LRDR) – The report is available as a preformatted report or as a data file extract – NSLDS refers to the LRDR extract as the SCHDREOP file Query your own internal system to obtain specific demographic data for the defaulted borrowers on your LRDR extract

25. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 CONDUCT OUTREACH

26. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Purpose of Outreach Provide services to populations who might not otherwise have access to those services Fill in the gap in the services provided by the mainstream

27. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Purpose of Default Prevention Outreach Provide services (repayment assistance) to populations (borrowers) who might not otherwise have access to those services Fill in the gap in the services (repayment assistance) provided by the mainstream (loan servicers)

28. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Phases of Outreach Determine the goal Identify a specific demographic Study their needs Create a program to help them learn or recover

29. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Phases of Default Prevention Outreach Determine the goal – Help 20 borrowers resolve their delinquency Identify a specific demographic – Late-stage delinquent borrowers Study their needs – Resolve delinquency before they default Create a program to help them learn or recover – Make calls and connect them with their servicer EXAMPLE

30. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Email Outreach When sending emails: – Utilize school’s email address – Use creative subject line to get the borrower’s attention – Keep it precise, yet informative – Avoid including personally identifiable information

31. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Letter Outreach When sending letters: – Highlight what you want them to know most in bold or color – Encourage them to contact their servicer if they have questions – Sign by hand

32. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Letter Outreach Hand write envelopes Use stamps Get creative with the envelopes – Colors – Special messages (i.e. “Savings Inside”) – Stickers Get Them to Open the Letter

33. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Phone Outreach When making calls: – Let borrowers know there are options available to help manage their student loan debt/resolve delinquency – Connect them to their servicer

34. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Phone Outreach When making calls: – Use a pleasant tone – Use voice volume control – Listen – Stay calm – Don’t take comments personally – Show empathy – Thank them…regardless of outcome

35. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 LOCATING UNKNOWN BORROWERS

36. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Locating Borrowers Many borrowers who are difficult to find – Left school without completing – Have neglected their loan payment obligation – Are avoiding other creditors – Move and change telephone numbers frequently – Are confused – Fear the problem is too deep to find a way out

37. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Locating Borrowers 1.Review reports for unknown contact information – NSLDS Delinquency Borrower Report (DELQ01) – Loan servicers’ reports 2.Utilize internal and external resources to locate delinquent borrowers 3.Update contact information to federal servicers

38. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Locating Borrowers Yahoo People Search Google Whitepages.com Voter registration records Property tax assessor Military locator Professional licensing records Alumni sites Federal and state prison locators

39. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Social Media Social media can be used to gather information to help locate a borrower – Date of birth – City – Place of employment – Married or changed name

40. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Social Media Facebook MySpace Twitter Foursquare Flickr LinkedIn Instagram

41. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Free vs. Fee-based Default Management Resources

42. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Pros and Cons of Free Tools Pros Free Flexibility Students may respond to school rather than outside vendor Cons Requires more time and/or people May need to use multiple tools Training required Salary expense Employee turnover

43. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Pros and Cons of Fee-based Tools Pros Proven-strategies and results More resources Expanded availability Cons Cost Fee structure may be complex Limited to one company Lack of transparency

44. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Benefits of Having a Default Prevention Action Plan

45. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Why Have a Plan? Provides you with a roadmap of activities that you can implement Shows your institution’s commitment to default prevention Helps to garner across-the-institution buy-in Ensures default prevention goals are met Helps justify additional resources Strongly encouraged by the Department of Education (GEN-05-14

46. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 USING FREE RESOURCES

47. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Resources Cohort Default Rate Guide – http://ifap.ed.gov/ DefaultManagement/ CDRGuideMaster.html

48. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Resources NLSDS Reports DRC015 DRC016 Repayment Loan Info Detail Report provides the current repayment status of certain borrowers in the FFEL and Direct Loan programs who attended a school during a specific period, either 24 months (DRC015) or 36 months (DRC015) DER001 The Date Entered Repayment Report is a list of student borrowers who are scheduled to go into repayment during a specific date range. SCHDF2 The Borrower Default Summary Report provides a list of loans that currently have a default loan status and a loan status date that falls within the requested range SCHPR1 The School Portfolio Report provides school users with information about all Direct or FFEL loans for a specified school. DELQ01 The Delinquent Borrower Report provides school users a report of borrowers who have been reported as delinquent in making loan payments to one of the federal loan servicers

49. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 CONCLUSION

50. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Follow the Road to Reducing Rates Know where you stand throughout the year Identify your at-risk borrowers Conduct various types of outreach to ensure you touch the borrowers that need your help most Help locate unknown borrowers Take advantage of free resources

51. ILASFAA Leaves of Change: Harvesting New Ideas 20152015 Thanks for Attending Bill Henderson Senior Marketing Consultant Great Lakes whenderson@glhec.org (877) 248-3961