Get Your Students Hired
Describe a practice at your institution that assists borrowers avoid delinquency. How effective is this strategy?
I go over their options during the exit counseling and make sure our students have the correct contact information for their lender. I also inform my students that I'm here to help even after they graduate with questions.
All students complete Entrance Counseling as a one-on-one exercise. In addition to a personal touch, there's a lot to be gained from this individualized attention (freedom to ask questions, more engagement, etc.) Students have the option of completing Exit Counseling either on-line or one-on-one. The fact that students are aware there are two required counseling sessions on loans, helps them understand the importance of this exercise. We also encourage students to contact us even after graduation if they're having loans issues. Last year our default rate was just over a third of the national average.
Katie,
The effort you are making with students is particularly important in recent months, as fearful students can be easy prey for commercial “debt relief†companies misrepresenting themselves. Companies seeking fees for consolidation or fake debt relief can certainly appear friendlier and more helpful than servicers threatening collections, so it seems more important than ever to help students understand payment and deferment options. We value the opportunity to initiate three-way calls between the student and loan company so that we can ensure the student receives all necessary information and is treated with respect.
Kellee Gunderson
Our institution's default rates has improved over the last couple cohorts. We have pretty much included default prevention since the first day a student sits down with financial aid as well as the amount of debt they are looking to borrow. We do make sure that the students are well aware if they are receiving a refund check that it is typically loan money and they will be responsible for paying that back later and it is usually in their best interest to sign those funds back to their lender. I always tell each student in front of me, what you do know will affect you later when you go into repayment and it is important to be smart about your financial choices and obligations. Of course, when they see the check amounts it is hard to prevent temptation, but at least they were told and it shouldn't come to much of a surprise at the time of their exit interview. We do let students know when they withdraw or graduate we are still here to help them with their student loans if they are unsure of their options and are unable to make payments. We also have recently acquired a 3rd party servicer who is helping with our default prevention efforts which has helped drastically in reducing some of the additional leg work we use to do here in the financial aid department. They have been extremely helpful in contacting our students and notifying them of options to keep current and to not be afraid to contact their lenders. It is a truly amazing on how frightful people are when it comes to picking up the phone and ask for help from their servicers. Sometimes they just need someone to hold their hand and give them the push to take ownership of their responsibilities and see how easy it is to stay current when you know your options. Many of the servicers I have dealt with are very knowledgeable and are more than willing to help to find the best answer for that student's situation.
Tina,
Over the years we have been challenged by students who refuse to respond to our early stage delinquency calls and notices because they are already far more past due on older loans and are overwhelmed by collection calls. We have also worked with loans that are past due because an in-school deferment was not successfully completed. As your procedures suggest, focusing default prevention efforts only on the new loans taken out for our school is a bad strategy that does not promote students’ overall success.
Kellee Gunderson
When I meet with a student for the first time, I ask if they have been to school before and if they have ever used Financial Aid. If so, I ask the permission to review NSLDS and print a copy for the student and myself. I give them the student NSLDS site so they can review on their own. When speaking to the students about their loans at our school, I make sure to include information about their previous loans and when they should begin repayment, within 30 days of graduation. I believe this assists our students in knowing the total of their loans and what the expected repayment will be.
Robert,
Wow, that is great! I really wish all schools had the ability to provide such excellent service. I am sure that these interactions help communicate the importance of the information; students are less likely to casually browse through a live meeting, unlike online counseling presentations which can be pretty easy to ignore.
Kellee Gunderson
My FA Director personally meets with every student during exit counseling. He goes over all of the student rights & responsibilities and allows them to ask as many questions as they'd like.........
Amber,
I am sure this leaves an excellent impression with your students. A school’s reputation in the community can be hurt by the perception that we are not really interested in student success. Making sure that we do as much as we can to assist students after they leave (both graduates and drops) is important both for re-enrollment opportunities and for the impact on our default rates.
Kellee Gunderson
Our school is always willing to help students with their loan questions. We do exit counseling and help them with any questions they have, even after graduating.
Wendy,
Showing students how to locate their servicer on NSLDS or studentloans.gov is very important. We have heard from many students over the years who had no idea what company they should be paying; this is particularly dangerous when commercial companies selling loan consolidation or loan assistance contact our students and attempt to sign them up for ambiguous services. If we can get students in the habit of contacting FA first, we can help them sort through all of the payment, consolidation, and deferment options available.
Kellee Gunderson
We help students know who to contact and what options they have when they are having trouble making payments on their loan. They know that if they need help to contact the financial aid office.
Matt ,
I think it is great that you have had your placement department cross train in some areas of default prevention. With many companies having a defaulted student loan can keep you out of the running for a job so it's a good way for placement to tie in the importance of keeping current on your loans.
Cheryl Kesson
Matt,
Bringing together Placement and Default Management is a great strategy. Speaking for a default prevention company, we cannot overemphasize the need for all departments to understand the relationship between the school and its third-party partner. It is discouraging and counterproductive when students mention our communication attempts to FA or Career Services, only to have the staff member reply “we have no idea who that isâ€. This makes students suspicious and limits our ability to assist them.
Also, Placement may be able to provide updated information on students so that the default prevention team has less need for intensive skip tracing efforts. Many students who no longer wish to speak to FA may still seek out the services of Career Services/Placement.
Kellee Gunderson
We have had the placement department sit in on training sessions with our default management company so they are aware of the terminology and able to steer them in a better direction as they are connecting with the students throughout job search.
Henry,
In the years that I have been working for a third-party default prevention company, I have seen too many students address loan payment checks to our office or to their schools because they have no idea where the payments should actually be sent. Taking time to introduce students to NSLDS and to the servicer’s website(s) is definitely a critical part of exit counseling.
This is especially true for students who also have loans from previous schools – some students have a confusing mess of old and new loans, consolidations, rehabilitated defaults, and private or parent PLUS loans. It can be very difficult for them to make sense of this information, but after we teach them how to use NSLDS and studentloans.gov they are in a better position to handle repayment.
Also, in taking the time to meet with them we have demonstrated our willingness to be helpful and available so they are more likely to come to us later with questions.
Kellee Gunderson
The exit counseling is a critical part for each student on understanding what debt needs to be paid off and to what lenders. Most student have no idea who to pay or when to pay because the lack of the school responsibility to take the time with each student and go the NSLDS and lenders information. It only takes 5-10 min for a student to meet with the FA and talk about repayment options.
Troy,
Do you find that students are open to learning about deferment and payment options? The new repayment plans that were introduced over the past few years can seem complicated, but we can definitely help students with the application process. Hopefully we can make confusing options more clear so that students make good decisions instead of giving up and allowing loans to default.
Kellee Gunderson