Assisting borrowers avoid delinquency...
Describe a practice at your institution that assists borrowers avoid delinquency. How effective is this strategy?
The most important thing in giving the student's the ability to pay back loans on time is getting them jobs. We place a high value on job placement -- the more successful we are at placement the lower our default rate is.
The placement office is a great place for your organization to connect with the borrowers. Your staff can watch for students in danger of falling behind on their loan payments, and answer questions the borrowers may not have thought to ask at the exit interview.
After students have viewed the Financial Aid Exit Film, I emphazise the importance of not letting their loans become delinquent.
For those students who appear on my Delinquent Borrower's Report, in addition to letters, I have started sending brightly colored postcards (something that will catch their eye in the mail)that reminds them of how bad credit can impact their lives. I have noticed from the increase in their repsone (phone calls) that this method seems to work better than just sending them letters.
A combination of education regarding repayment of loans and career services placement, provide our students with the resources and information needed to become successful.
The assistance from Career services in the job search, gives our students the resources needed to repay loans. When students are working and making more than their use to making; they are more likely to fulfill their financial obligation and everybody wins.
Our career services department gets involved wit the student from day one! They help with part-time and full-time work while students are in school.
We also provide financial wellness counseling to students throughout their time with us.
I like the idea of sending postcards to encourage them. I'm sure it is something student's least expect.
We try to ensure that they are given the most knowledge possible throughout their program. As mentioned throughout this module, the more they know, the more ownership they have and the less likely they are to become delinquent or default.
Melanie,
In my institution try that the student has the greater knowledge through information in the financial aid,office, brochures and information that provide the banks to us. Of this way there is less possibilities of delinquent or default.
Our lender/guarantor sends out monthly reports that list the number of days a borrowers is delinquent. We in turn contact the borrowers and advise them that they have deferment options. We also advise the borrower that it's important to contact their lender if they are experience repayment issues and how it is important for them not to let their loans go into default.
I believe that this is working because we have a 1% default rate. we can however do a better job in the collecting more accurate information by sending out "graduation notificationsâ€, “credit letters" and "call references" to ensure the accuracy of the information given.
We are able to assist borrowers in avoiding delinquency by keeping them employed. Fortunately, the skills taught in our program are useful (marketable) even of a student does not complete the degree. We work to keep all of our former students (both graduates and drops) employed in well paying jobs so that they have the resources they need to support themselves and meet their payment obligations. This seems to be a very effective strategy. (Of course this might be more difficult if the unemployment rate was very high.)
There are many things that we can do within the institution to help students avoid delinquency and default. During the entrance interview students are given realistic estimates of their expected student loan indebtedness instead of generalized estimates. Our placement department works with students from the time they walk into our doors to enroll as we do not place any restrictions on students who need or are seeking employment. At the completion of each academic year, withdrawal, or graduation students are counseled again to reinforce the information that was provided during their inital entrance interview. Letting the student know about that we care about their education and financial success makes it easier for us to remain in contact with them once they leave school and more likely to contact us for assistance if they run into problems repaying their student loans.
We have hired an outside agency to help prevent delinguencies. We also stress to all borrowers the importance of paying their loans, and how it helps future borrowers, maybe even their children!
I agree, that is why we place a high value on Career Services getting students jobs and also helping out later if to find new jobs for older grads. You can't repay loans if there is no job.
Open communications between Career Services and the school's default management department or third party servicer, like Champion College Solutions, is essential as well. These two departments can work together as a team to insure the student's success when they leave their education experience.
The success of a third party default prevention servicer, like Champion College Solutions (formerly "Hands On" Default Prevention), is in communicating who we are and what we do for the students.
Schools have great success with reducing delinquencies and defaults when they put the Champion posters up around the school and consistently tell students to call us if they have questions. Schools who do not communicate this vital information do not have as much success because students are not as open to communications. Success is dependent upon proper communications, both verbal and written.
State the concepts that will instill ownership of the loan responsibilities, put details in writing, and give the contact information for who to call if they need help.
I like the idea of brightly colored postcards very much. I have been making a list of ideas I want to take to the President of our school and I think that is going to be one I pass on to see if we can implement it.
Brenda
As others have stated in their posts, we have a wonderful Career Services staff that continously works with current students and graduates to help them with their resume, interview skills and on job placements.
I only work part-time from home, but default managment is all I do. I used to make more phone calls, but I have found that modern technology (Caller ID) means that many times people I am trying to contact will not answer the phone when I call because they know exactly why I am calling. What they forget is that if they work and communicate with me, then they would not have to cringe everytime their phone rings. Whether I call someone or not, I send out letters to anyone that I have been unsuccessful contacting via the phone. If I am unable to talk to the person when they call, I make sure that I return their calls as soon as possible.
I also just created a letter to give to graduates, that goes with the Exit interview papers. Now that we are having group Exit counseling, they get to see a face to go with the name on the letter.
Even if I am talking with someone that was not one of our students, I always remind people that communication is a beautiful thing. If they would just let someone know about their financial issues, that someone can usually help them make arrangements until things get better for them.
Brenda
We understand that borrowers have alot going on so we implemted 3-way calling in which we connect directly with the center handling their loan to prevent further delays in resolving the situation. It reduces the amount of "reminder calls", emails, and letters we have to provide and assist the borrower in promptly contacting the correct person to take care of their issue(s).
