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
- Implement campus partnerships to identify and assist at-risk students
- Develop resources and referral list for students with financial trouble (e.g., consumer credit counseling services, Federal Trade Commission, etc.)
- Use resources on Mapping Your Future
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
- Provide debt management counseling to students (use Mapping Your Future’s Financial Literacy counseling, Grace Period Repayment counseling, or money management content to start)
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 budgeting, handling credit cards, and choosing insurance
- Use Mapping Your Future’s calculators to help borrowers estimate their payments, create a budget, etc.
- Use interactive tools to reinforce students’ knowledge about student loan borrowing and financial literacy
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
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