Prevent defaults and encourage debt management on campus

Prevent defaults and encourage debt management on campus

Financial aid professionals are in an ideal position to help at-risk borrowers understand the importance of repaying student loan and consumer debt. You can increase student retention and reduce student loan delinquency and default through a variety of techniques.

Collaborate with business partners

Communicate with students

  • Set up an orientation session or course for new students, covering topics such as study skills, how to be a successful student, time management, and resources on campus
  • Require students on academic probation and re-entering students to complete a course which includes study skills and time management
  • Hire a dedicated default prevention staff member: borrowers need personal contact
  • Work with borrowers after they leave school (make phone calls or send letters/e-mail to borrowers who are in grace or who already are delinquent)
  • Monitor potential withdrawals and advise these students about their options
  • Provide a calendar to students exiting your school - after you've marked their repayment start date on it
  • Review your portfolio to identify students at high risk for default (if resources are limited, focus efforts on at-risk students)
  • Start a peer counseling group on campus

Counsel students often and in a variety of ways

Implement financial literacy programs

  • Get financial aid and money management on the curriculum for classes that have a financial component - even if only for one hour each term
  • Adopt a financial literacy program that addresses debt management issues beyond student loans including budgetinghandling credit cards, and choosing insurance
  • Use interactive tools, such as Mapping Your Future's educational games, to reinforce students' knowledge about student loan borrowing and financial literacy
  • Use Mapping Your Future's calculators to help borrowers estimate their payments, create a budget, etc.
  • Use EX$EL’s Financial Education course to educate your current students

Use technology in creative ways

  • Allow students to keep their school e-mail addresses after the leave or graduate so you have an easy way to reach them to offer assistance
  • Use EX$EL to engage your students through a Financial Education or Repayment Success course

Leverage training and tools to help you

  • Attend default aversion and financial literacy workshops when offered
  • View the webinars on demand, which include past default prevention webinars
  • Consider using the money management flyer that includes tips for managing student loan debt
  • Subscribe to the Mapping Your Future Higher Ed News to receive updated information and ideas about default prevention and other higher education related topics
  • Share your successes with your peers