In a November FSA webinar, we were encouraged to consider many factors that can lead to default. While we often discuss the efficacy of exit interviews and strategies for contacting students once they are already delinquent, it was interesting to shift focus to the very early phases of enrollment, namely college preparedness and program selection. To address these topics, the goal of default prevention evolves out of the Financial Aid office and is embraced by entire institution. Every department, from Admissions to faculty, has a vested interest in the financial success of the organization and the personal success of every student. High default rates will continue to be a problem as long as FA fights this battle alone.
One example is assisting new students set realistic goals and select the best course of study. Do our students really understand the job outlook and salary expectations for their chosen field? Are they aware of the time commitment required for attendance, homework, and externship? If we help students make good choices early in enrollment, we can positively impact drop-out rates and loan delinquency. Conversely, students that choose goals poorly may give up on their education, view loan repayment with resentment, negatively review the school, hate their jobs, or fall behind on household bills.
Additional factors in default rates are college readiness and acclimation. Do we offer sufficient tutoring and remedial instruction to keep our students competitive in the job market? Do we have a consistent strategy for identifying students that are struggling academically and how do we intervene when grades or attendance drop? How do our colleges support first generation students, older re-entry students, and people with language or transportation challenges?
If we address student loan borrowers holistically and coach them successfully through all aspects of education, one of the many results will be an improvement in cohort default rates. In order to obtain a good job and prosper financially, graduates need more than just a degree or certificate; borrowers need interviewing and resume skills, information literacy, problem solving ability, and interpersonal skills. While we don’t have the ability to offer all of these, we can at least have a ready arsenal of contacts, websites, and community resources so that we know where to refer students when questions and challenges arise.
