How High is Too High? Focusing Your Limited Resources to Effectively Reduce your Rising Cohort...

How High is Too High? Focusing Your Limited Resources to Effectively Reduce your Rising Cohort Default Rate

Dave Macoubrie

Vice President of Repayment Solutions

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1. Understand the 3-year default rate calculation.

2. Goal and expectation alignment.

3. Planning for action

4. Activities while students are in school.

5. Grace period transition.

6. Successful repayment assistance techniques.

7. Evaluating success.

Objectives

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Repayment Success

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What are our challenges?

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Persistently high unemployment

High student loan delinquency rates

More students are borrowing more money

Decreased state funding

Transition from 2-year to 3-year CDR calculation


Trends in National Default Rates

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1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100.0%

5.0%

10.0%

15.0%

20.0%

25.0%

17.6%

17.2%

21.4%

22.4%

17.8%

15.0%

11.6%

10.7%

10.4%

9.6%

8.8%

6.9%

5.6%

5.9%

5.4%

5.2%

4.5%

5.1%

4.6%

5.2%

6.7%

7.0%

8.8% 9.1%

National 2-Year Official Student Loan Cohort Default Rates

Cohort Year

Co

ho

rt D

efa

ult

Ra

te


Default Rates # of Schools % of Total

Below 15% 3,321 64%

15%–20% 820 16%

21%–29.9% 750 14%

30% and above 293 6%

2009 3-year Cohort Default Rates

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UNDERSTANDING THE COHORT DEFAULT RATE

CALCULATION

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Cohort Repayment (Denominator)

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Cohort year is the same as Federal Fiscal Year

Based on borrowers not number of loans or dollars

Based on when the borrower enters repayment


Cohort Default (Numerator)

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Borrower must have entered repayment as calculated on the previous slide

Defaulted within the prescribed time period

Borrower has not been rehabilitated prior to end of cohort year calculation


3-year Rate Formula

Enter Repayment

Track Default Status

Oct

ober

1,

2010

Sep

tem

ber

30,

2011

Sep

tem

ber

30,

2012

Sep

tem

ber

30,

2013



FY 2011 3-year CDR

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13Confidential. Do not copy or redistribute without expressed written permission from Inceptia.© 2013 Inceptia

Goal Alignment


Where can I make a difference?

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2011 2013

2012


3-Year Cohort Default Rate Schedule

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Training (In-School)


Training (In-School)

Entrance and Exit Counseling

Campus-wide team support

Financial Education

Extenuating circumstances

Data Analysis & At-Risk students


ExampleKick-off Event: Oct. 3, noon. Meet peer financial counselors, get information on how to manage student loans, and enjoy games, free food and prizes. Goal and expectation alignment.

Ice Cream Social: Oct. 12, noon. Learn about loan repayment options.

Lunch and Learn: Oct. 19, noon to 1 p.m. Have a free lunch with loan repayment experts from the Financial Aid Office. Learn about student loan repayment strategies, including Income Base Repayment and Public Loan Forgiveness.

Wonderful Wednesday: Oct. 24, 11 a.m. to 2 p.m. Meet financial counselors and enter a drawing.

Information Session: Oct. 31, noon to 2 p.m. Peer financial counselors will discuss money basics; a money management slideshow will be provided.


Race Day (Grace)


Race Day (Grace)

Send E-mailsMake Telephone CallsOffer Financial EducationUse the NSLDS Early Stage Delinquency

Assistance report


Riding the Repayment Race

NSLDS DELQ01 Report


Who can I help?

• Do I work with all delinquent borrowers or only those that are in active cohort years?

• How many days of delinquency do I allow to pass before I start helping?

• What efforts do I give to PLUS and PLUS Grad borrowers?

• If this borrower is in the cohort denominator and is delinquent, but can’t default by then end of the year, what efforts do I provide?


How do I help?

Send E-mailsProtect Personally Identifiable Information Use multiple addresses when possibleAllow them to “op-out” if they choose Include a telephone number they can call back to Include self-help websites if you have them


How do I help?

Send lettersCan include Personally Identifiable Information Include the servicer name and telephone number for

them to call directly if they choose Include a telephone number they can call back to Include self-help websites if you have them Include a personalized signature line if possibleTry different types of enveloped and colors to entice

them to open.


How do I help?

Make Telephone CallsVerify identity before providing any information Have the servicer name and telephone number

quickly availableCall at different times of day and days of week.Provide a call back number when you leave

messagesHave forms ready to be e-mailedConference call student with servicer when possible


Final thoughts?

• How will you track efforts?• How do you measure success?• Do you have the right number of staff and the

optimal hours of Operation?• How will you train staff initially and ongoing?• Do you have security in place to protect your

staff?


Crossing the finish line

QUESTIONS?

Contact Information

Dave MacoubrieVice President of Repayment Solutions

402.479.6867

[email protected]

Inceptia.org

Follow us on Twitter | @Inceptia

THANK YOU

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