If you are actively working to bring down a high cohort default rate with a small staff, you have likely faced numerous frustrations – the inability to complete preventative phone calls to students ending a deferment or forbearance; insufficient contact with students during the grace period; and increasing numbers of students in the 30-90 days past due range who simply are not receiving enough attention.

Often, schools with high default rates operate in crisis mode- we call the most delinquent students as often as we can manage, focusing on late-stage cures. Depending on the size of your staff and the resources available, perhaps this is the best you can do.  But then again, perhaps not…

Touching base with students during grace is a crucial component of delinquency prevention. In the months leading up to repayment, students are making important decisions about budget, debt, and employment opportunities. If a student has not yet found a job or is having trouble with household bills, he may never even try to keep his student loans current. When we speak to borrowers during grace, we can advise them of lower payment and deferment options so they can avoid delinquency entirely. This has the added benefit of lowering the cost of late-stage skip tracing.

If you simply do not have the staff to physically call students when a forbearance or deferment is ending, do you at least attempt email or letter correspondence? Providing the student with links to the servicer’s website and to information about applying for another deferment can be successful even in the absence of personal contact.

Finally, we recommend you consider the distribution of effort across delinquency buckets. While it may make sense to take an ‘all hands on deck’ approach to students nearing default, the sad reality is that some of those students will not result in cures. By the time a student is 358 days past due, skip tracing efforts may have been exhausted and references depleted. It is important to find a balance in your phone efforts so that students are called early in delinquency when contact information for them is still good and before they are so overwhelmed by debt that they give up and ignore our attempts to assist them.

This last point bears some additional attention. How does the FA office communicate to students our desire to assist, and avoid being lost among collection agencies and sales calls? Most importantly, we establish a good relationship with students, families, and references throughout enrollment. We make sure the student knows who we are and what we do. Second, we enlist the help of Career Services to gather updated contact information. Finally, we maintain an online presence in order to remain visible and interesting to students after they leave school. If the FA office has a social media account, a blog, or an email newsletter (or if we can contribute content to an account run by the school), we can offer resume and interview tips and post articles about student loan payment plans, financial literacy, and deferment options.

We encourage schools to share with each other the strategies they have found helpful in locating seriously delinquent students, as well as how they have balanced preventative measures with the need to assist students very close to default.