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Connecting action to your cohort default rates
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Connecting Action to Your Draft Cohort Default Rate An Action Plan for Student Loan Repayment Success
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Transcript of Connecting action to your cohort default rates
Connecting Action to Your Draft Cohort
Default RateAn Action Plan for Student Loan Repayment Success
Introduction
George R. Covino– Vice President, USA Funds
Phone: (866) 329-7673, Ext. 0177
Email:
LinkedIn:
https://www.linkedin.com/in/georg
ercovino
Twitter: @GeorgeRCovino
Default Prevention Forum:
http://defaultpreventionforum.org/
2
The Basics
3
Agenda
Why Cohort Default Rates Matter
Action Items:
– File challenges and appeals.
– Analyze your defaulters.
– Review your NSLDS reporting process.
– Sync up your default prevention and retention plans.
– Commit to money management education.
– Create or revise your student success plans.
– Consider outsourcing borrower communication to USA Funds.
4
Why Cohort Default Rates Matter
High CDRs can lead to added administrative burden and
sanctions against schools.
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Why Cohort Default Rates Matter
Schools with a three-year CDR of 30 percent or greater
must submit a Default Prevention Plan.
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Year 1:
– Identify significant factors.
– Determine steps to reduce CDR.
– Explain how school will promote successful loan repayment.
Year 2:
– Submit revised plan to ED.
Year 3:
– Lose eligibility to participate in Direct loan and Pell grant programs.
Year 3:
To appeal or not to appeal
Action Item: File Challenges and Appeals
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Draft Rates:
Incorrect Data Challenge.
Participation Rate Index
Challenge.
Helpful Links:• ED Cohort Default Rate Guide• ED eCDR Appeals System
To appeal or not to appeal
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Official Rates:
Uncorrected Data Adjustment.
New Data Adjustment.
Erroneous Data Appeal.
Loan Servicing Appeal.
Economically Disadvantaged Appeal.
Participation Rate Index Appeal.
From Big Data To Actionable Insights
Finding patterns and deriving
insights.
Advantages:
– Data-driven decision-making.
– Strategic use of limited
resources.
– Improved efficiency.
– Improved effectiveness.
Challenge:
– Need strong operational (IT)
support.
Action Item: Analyze your defaulters
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From Big Data To Actionable Insights
Example: Iowa’s Community Colleges
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Prediction What The Data Revealed
Students who default
borrowed large
amounts.
Of those who defaulted:
– 43% owed less than $5,000.
– 75% owed less than $10,000.
Defaulted borrowers
finished, but couldn’t
afford to repay.
Of those who defaulted:
– 60% earned 15 or fewer credit hours.
– 69% did not complete a credential.
Defaulted borrowers
simply stopped
making payments.
Of those who defaulted:
– Two-thirds never made a loan payment.
– Most defaults occurred in the first year.
Transfer students are
at higher risk.
Non-completers who subsequently
used in-school deferment defaulted at
a lower rate than other groups.
Source: “A Closer Look at the Trillion: Borrowing, Repayment, and Default at Iowa’s Community Colleges” by Colleen
Campbell and Dr. Nicholas Hillman. The Association of Community College Trustees, September 2015.
From Big Data To Actionable Insights
What Story Does the Data Tell?
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0
5
10
15
20
25
30
35
40
45
50
0 100-3000 3001-6000 6001-12000 12001-45140
Defaulted Borrowers
EFC Range
Factor: Expected Family Contribution
From Big Data To Actionable Insights
What Story Does the Data Tell?
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0
10
20
30
40
50
60
70
80
90
100
Remedial Courses Suspended in FinalSemester
Withdrawn in FinalSemester
Graduated
Factor: Coursework Completion
Yes No
Defaulted Borrowers
0
5
10
15
20
25
30
35
40
45
50
$0-$5000 $5001-$10000 $10001-$20000 $20001-$30000 $30001-$43091
Defaulted Borrowers
Loan Balance
Factor: Loan Balances
From Big Data To Actionable Insights
What Story Does the Data Tell?
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0
5
10
15
20
25
30
35
40
45
50
0-0.99 1-1.99 2-2.99 3-4.00
Defaulted Borrowers
GPA Range
Factor: Grade Point Average
From Big Data To Actionable Insights
What Story Does the Data Tell?
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From Big Data To Actionable Insights
Given the data shared on the previous slides, what other
ideas would you suggest for action items?
What have you learned from an analysis of your own
defaulters and what action did you take?
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Data Matters
Enrollment Reporting is required for all schools
participating in Title IV aid programs.– Protects the rights of borrowers by ensuring that loan interest
subsidies are based on accurate enrollment data.
– Ensures loan repayment dates are accurately based on the last
date of attendance.
– Allows in-school deferments to be granted automatically using
NSLDS enrollment data.
– Provides vast amounts of critical data about the effectiveness of
Title IV aid programs, including completion data
Helpful Links:– ED NSLDS Enrollment Reporting Guide – Updated October, 2015
– ED NSLDS Professional Access
Action item: Review your NSLDS Reporting Process
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Influencing Cohort Default Rates
Managing CDRs must be a proactive exercise.
Action Item: Manage Multiple Cohorts
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Influencing Cohort Default Rates
Action Item: Manage Multiple Cohorts
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COHORT CLOSED
869
504
139
226
591
956
CY 2013
CY 2014
CY 2015
CY 2016
DAYS REMAINING TO END OF COHORT AS OF 02/17/2016
Days Past Days Remaining
Managing Multiple Cohorts
Action Item: Manage Multiple Cohorts
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Cohort Focus Actions
2013Check data and set goals
for future cohorts.
Review data used in CDR calculation.
Challenge or appeal.
Analyze defaulters.
2014Focus on late stage
delinquency.
Review borrower records.
Communicate options urgently.
Connect borrowers with servicers.
2015Communicate efficiently,
effectively and often.
Schedule regular communication.
Encourage borrower participation.
Target your efforts using risk analysis.
2016Counsel, educate and
ensure complete records.
Create educated consumers.
Explain options and resources.
Encourage active participation.
Retention Is A Default Prevention Strategy
Look at your data!
Consider:
– Combining retention and default
prevention committees, strategies and
plans.
– Review the impact of financial aid
policies on student retention.
– Check out Complete College
America’s game changers:
Corequisite remediation.
Full-Time is Fifteen.
Structured Schedules.
Guided Pathways to Success.
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Action Item: Sync up your default prevention and retention plans
Financial Literacy is a Retention Tool
Students do not know how to be
successful in school.
– Orientation.
– First-year experience.
– Advisors and mentors.
Students (and families) do not
know how to manage their
finances in order to be
successful in school.
– Optional workshops.
– Once and done.
– Limited to Financial Aid Office efforts.
Action Item: Commit to money management education
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Financial Literacy is a Retention Tool
Create educated consumers.– Loan counseling.
– Money management education.
– Orientation and FYE courses.
– Career counseling.
– Advising.
Encourage active participation
before and during repayment.
Helpful Links:– USA Funds Teachable Moments for
Personal Finance Education.
– ED Loan Counseling Requirements
and Flexibilities.
Action Item: Commit to financial education
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Plan Your Work and Work Your Plan
Create a student success plan for default prevention and
retention or revise and combine if you already have one.
Establish a CDR goal and measures for all activities.
Review based on data and outcomes.
Helpful Links:
– US Department of Education Student Success Plan Template
Action Item: Create or revise your student success plans
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USA Funds School Services
USA Funds Borrower Connect Cohort Management
Solutions.
– Complete default prevention solution that includes award-winning,
patent-pending software; analytics; contact and counseling; robust
reporting and tracking.
USA Funds Default Prevention Forum Blog.
– http://defaultpreventionforum.org
Request for Proposal Tools
– www.usafunds.org/RFP
Action Item: Consider outsourcing borrower communication to USA Funds
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Connecting Action to Your Draft Cohort
Default Rate
Action Items:
–File challenges and appeals.
–Analyze your defaulters.
–Review your NSLDS reporting process.
–Sync up your default prevention and retention
plans.
–Commit to money managment education.
–Create or revise your student success plans.
–Consider outsourcing borrower
communication to USA Funds.
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A nonprofit corporation, USA Funds® works to enhance
postsecondary education preparedness, access and success
by providing and supporting financial and other valued services.
