Education is by far the most important thing.
In many cases the students may not have had much experience in finance management, especially as it applies to long term debt payment.
Terms such as interest, subsidized versus unsubsidized and default may seem almost esoteric as a result.
If prior to enrollment, and at the close of a program all information is presented in a concise and clear fashion it may help those that aren't particularly informed before seeking education. Additionally, it can help to identify those that might need further assistance in making a determination as to whether or not such an obligation can be undertaken.
Exit interviews and discussions during the intial visit of a prospective student are two measures which my institution applies. Additionally, student financial services are available for explanation and consultation as needed, within the constraints of staffing availability of course.
I think it's best for a student to be completely aware of what is required of them when it comes to loans. Also, it would be helpful for an institution to follow up with the students after a certain amount of time (based on how long they are in a program).
Our school has a person in place to contact all students who have either completed our programs or withdrawn from the school to conduct a mandatory exit interview. She will review their loan status and help them set up the repayment options. She is a full time employee and continues to work on current students and also the past students who are in default, or nearing it.
I think the best thing is the exit counseling upon completion. I wish this is something I would have paid more attention to, because I was somewhat clueless when it came to paying back my loans. I also think that when we set up installment contracts, telling them that they don't collect any interest while in school so it's best to pay as much as they can to cut down on the interest has been a helpful strategy. That is definitely something I wish I would have known in college!
I think proper counceling from day one about loan repayment is very important. Setting realistic expecations is critical to prevent default on student loans.
Speak with the students early and often to keep them paying on their loans. Having high retention rates also helps to lower default rates.
Our program doesn't offer finanacial aid. But I do think more training in managing one's finances are very important. There is a budget for everything we do, and basically you have to own up to theat responsibilty.
People that come through our school or any school for that matter, it is a very scary thing. It is most important to set a plan, and stay-up-to-date with each student.
Loan Counseling is a great idea. Many students have a hard time wrapping around the idea of saving money.
Credit has become so easy to get access too, which as we know, caused a recent economy downfall.
I actually believe Loan Counseling should be an requirement at the high school level
I think the most important thing to prevent default is awareness. I feel that it is important to talk to students throughout their program not just at the beginning and the end. We have a default specialist on campus that helps with our students awareness about default.
At both institutions that I have worked with in the past,we had a specific financial aid advisor who worked specifically on loan repayment. He set up appointments with students before and after graduation to help them figure out all of their options when it came to repayment. He even updated them when anything changed as far as new laws/regulation or if a new repayment option became available. It benefited several students.
We aren't title IV, so this section is academic for us.
I feel the most important thing we can do to prevent default on student loans is to prepare and fully inform the students by giving them a realistic view of what is expected from them and what they will need to do in order to prevent this.
I think they need to really highlight and counsel students before they enroll about the cost of their schooling and what the payment plan is going to look like if they accept the financial aid package. Also highlight the fact that these will need to be repaid even if you have not found a job in your related field by a particular time. I know Admissions Reps already do these things, but maybe we just need to highlight and stress them a little more.
In order to prevent student loan debt, actual financial cousel must be given in a timely manner for the student to review what debt they will really be taking on looks like. I believe my institution could do a better job of implementing this when the student starts school, perhaps even during orientation. As well as discussing default prevention throughout the time they are in school with workshops, financial planning classes, and better exit counseling to discuss their options/payment plans in paying back their loans.
The most important thing an institution can do to prevent default on student loans is to ensure it has knowledgeable staff in this area, conducts the one on one entrance and exit counseling.
For larger schools, hiring a default specialist employed by the school for current students and graduates is a good way to assist with default management as well. This way the students feel comfortable asking for resources or assistance guiding them in the right direction for repayment options, etc.
I think it is important to have financial education/management classes, specifically revolving around debt. No matter what profession one enters without sound financial management, they will always struggle.
We use a program called IGrad. It is designed to inform our students on the importance of Financial literacy. Not only about student loans, but also about bugeting in general. Entrance and Exit counseling about important, but I don't think most take it as seriously as they should. Sometimes it seems like they rush through the process and don't read it as thoroughly as possible.
Our institution is very proactive in making sure that students are well-informed regarding their financial obligations while in school and after graduation. Our Financial Aid staff covers their expected contributions thoroughly before the time of enrollment. We have subscribed to Financial Literacy tools that are made available to all students and some participation is required from every student in their first month of classes to get them acquainted with the tools available to them.
Our school has staff on hand to speak with students and help them set up repayment plans and helps figure out how to keep students out of default
Our institution has found that reviewing in detail all financial obligations and loans with the student and family are important to the long-term success of repayment. We make sure before they start our school they know how they are paying for school - are they using grants, loans, what type of loans, how much in loans, terms of loans, etc. When a student is aware of their investment, they tend to want to succeed and graduate and those who graduate tend to make payments on their loans.
