This is an excellent point that, to be honest, I haven't given much consideration to. The whole concept of loans can easily be glossed over and that should definitely not be the case. I trust that my FA team will do the right thing by each student, but being in enrollment means that I need to correctly set the stage for a productive conversation w/ FA before the student gets to that point. The easiest way to do this is to hammer home the fact that "loans need to be paid back" and failure to do so can "have very serious and negative consequences" for years to come. Thanks for the tip!
It is always important for institutions to disclose information regarding student's default rates. One of our enrollment process includes checking the students federal aid history to insure funding for the completion of the program.
I agree that constant contact with students regarding their loan responsibilities is the best way to make an impact on the default rate. It starts at enrollment and then the FA department follows up at every repack, crossover, and at graduation. This means the student will be hearing the same message 6-8 times if they are working towards an associate degree. Part of the conversation needs to be about their current budget and what they can afford to pay now, so they don’t have to take on as much loan debt.
Perhaps offer some sort of a money management program and make sure they understand the loans are for their schooling and nothing else.
From and Admissions Representative's perspective, the basic understanding of student loans begins with our first conversation about cost of attendance with the student. We are not the experts on specifics, but we should be able to clearly represent the facts and put the student in direct contact with their Financial Aid Analyst for further education about their student loan repayment options. A clear and consistant message to the student will ensure their success with finishing their degree, and successfully paying back their student loans.
A school can openly discuss tuition and fees and be willing to share the importance and seriousness of using loans. If applicable, a school might even be able to notify students when they are nearing default and offer coaching or advice in helping avoid it.
Our school doesn't have a student loan program. I don't have any experience for that topic
It is so hard to prevent default on student loans. I do not work in the financial aid department but I can tell you that the team that I used to work with made sure that the student knew they could contact them for assistance at any time. Made sure they knew they could help them with getting their loans into deferrment or forebearance if they were experiencing financial hardship. I know that all expected students need to take entrance counseling in order to received federal funds but I've taken it myself and I think it could be a little more difficult. They've made it to where a student can fly through it without even reading and understanding.
This is a great position to have! I would like to see this at our college. With the increasing cost of tuition we have more students now more than ever using alternative loans and going into default.
Tbere is a team of specialists in my institution who work with students regarding financial aid and give them all of the relevant information they need to to understand the process of how federal loans, grants and scholarships work and the consequences of not being able to repay loans. The students, being well informed of all of this, get to take a comforgable, knowledgable step towards their future.
I agree, but believe there should also be great importance put on the loan repayment before the student decides to start the program and again when the student graduates to reiterate the consequences of defaulting on their loan.
This is a personal reply only. I think it is well worth a college's/university's time to annually assist a student with their loan and financial situation. Financial education is not broadly discussed in high school. This could be helpful in preventing loan defaults and assist the college in retaining students.
There are many things an institution can do help prevent default on student loans. Education is the most important factor to prevent default. It is surprising to me how many students do not know what NSLDS is and the company that services their loan(s). Students need to know about NSLDS!
In addition to entrance counseling and exit counseling, an institution has many opportunities throughout a student’s enrollment to provide information on repayment plans, consequences of withdrawing, results of not completing (putting off) education, etc.
There are also several tools that institutions are able to provide to their students many of which are available from the USDSE. I find the repayment calculator to be a valuable tool in helping to counsel students on repayment and borrowing.
Additionally, it is important to share with the students the effects of default on their futures. In today’s society, many employers require a credit check prior to employment. Defaulted student loans may jeopardize a future career and most certainly will halt employment with any government entity.
Finally, ED loan servicers want to help borrowers. It is important to share this information with students. Too often they are feared and fall into the stereo type of other “debt collectorsâ€. My experience has been that ED loan services are able to successfully navigate a solutions for students that will work within their financial limitations and keep the student out of default.
I am in full agreement that the students should understand the danger of default on student loans and the impact that it can have on their lives in the future. Learning a system to follow with an entry level job and a sound budget and budget counseling can help individuals be more successful at paying off some of their college debt quicker.
