1. Default Prevention Define Your Team & Develop Your Plan
Dana Kelly, Trainer
Nelnet Partner Solutions

2. How do you get a handle on default?
You need a plan!
Success is achieved when solid plans are developed and executed.
A plan pulls together people and resources toward a common goal.
The plan provides for consistency and allows for data to steer participants toward beneficial outcomes.

3. Define Your Team The job of your Default Prevention team is to:
Determine the source of your default risk
Decide what steps your school will take to reduce default risk
Represent all parts of the institution (including management and students), which will contribute to risk reduction activities
Allocate school resources to default reduction activities
Assess the effectiveness of default reduction activities over time (Are they working?)

4. Team Members Members of the Default Prevention team may include:
Senior school officials
Representatives from various offices
Student Affairs
Academics
Enrollment Management/Admission
Other
Student representatives

5. Define the Rules Have regularly scheduled meetings
Distribute agenda/minutes, discuss agreed upon assignments
Provide training about default and prevention
Assign specific responsibilities in conjunction with your plan
Evaluate progress and adjust the plan
Celebrate and promote your successes

6. Getting into the Game Conduct a risk analysis first. Why?
Creates understanding of who is defaulting and why
Allows for an increase in effectiveness of default prevention efforts
Reduces waste of time/resources
Provides the right target populations to engage

7. The Data Use data to create a picture of borrowers at-risk of default
Who is not enough.
Why will require input of academic, student affairs, and other professionals.
 Knowing why is necessary to create targeted, useful, and measureable interventions.

8. Examples of Who Never contacted Developmental studies Late admits
Early withdrawal
Gradated
License exam
No exit counseling
Unsatisfactory SAP
Excessive debt
Academic preparedness
Academic probation
No job in profession
Certain majors
Attendance issues
Student employment
Late majors

9. Examples of Why Poor study habits Finances/need Basic skill deficits
Language barriers
Feel unwelcome, no campus connection
First generation, no role models or family support
Transition difficulties
Finances/need
Relationship issues
Physical & mental health challenges
Dependent-care
Transportation
Housing

10. Your Results Your who will be unique.
Your why will also be unique and is vital to understanding your at -risk population.
The team you create will translate the who and why into core strategies that work to promote student success and reduce default.

11. Possible Intervention Opportunities
Enhanced entrance and exit counseling
Financial literacy education
Collect more useful contact information
Early-stage (repayment) assistance
Late-stage (repayment) assistance

12. Borrower Education is Fundamental
Instill in borrowers that loan servicers are available to assist them.
Who is their servicer?
What does their servicer do?
When should they contact their servicer?
Where can they find out more about what their servicer offers?
How to determine if they have multiple servicers (FFEL/ED Owned)?

13. Consider When it Makes Sense to Intervene
Borrower education about repayment
Financial literacy
Gain additional or updated contact information
Engage borrowers through social media for increased exposure

14. Consider When it Makes Sense to Intervene
Use social media to promote good loan repayment
Ask borrowers to contact you if they have questions
Reiterate the importance of communicating with their servicer(s)
Validate contact information
Re-enrollment or transfer assistance
Employment counseling and search assistance
Job placement assistance

15. Consider When it Makes Sense to Intervene
Contact borrowers in early-stage delinquency ( days) directly
Contact those in late-stage delinquency (210+ days)
By phone, if possible
Review servicer information and urge servicer contact
Borrower engagement is a key factor in successful default prevention!

16. Leverage Points
Identify your campus leverage points. Use these to gain active borrower participation.
 Admissions
 Entrance and exit counseling
 Probation/SAP
 Registration

17. Tips for In-Repayment Engagement
Make phone calls (most effective)
Use a light touch. You are calling to help, not to collect.
Mail handwritten notes
Send letters and/or s
Hand-address regular envelopes
Use a stamp, not a postage meter
Consider colored envelopes or paper
Personalize the letter and sign it
Postcards can also be effective

18. Student Success Model
Focus on helping borrowers develop a healthy relationship with their education
Increase program completion rates
Decrease program completion time
Help non-completers find a job
Successful students = successful borrowers
Leverage efforts to increase retention, graduation, and employment
This model establishes cooperation campus-wide
Goal is to ensure borrower completion
Targets students at risk of unofficial or official withdrawal

19. Accountability Use what your data tells you.
Identify your at-risk populations
Reach out immediately with targeted campaigns
Help them remain in school
If they’ve already left, help them return
May involve help to overcome obstacles
If they will not return, help them understand their repayment obligations
Some think they do not owe anything because they left
Learn about their experiences
Use this info to help other students stay in school

20. Exercise: Evaluating Where You Are
Evaluate your default prevention readiness
What was our school’s FY ‘10 CDR? Draft ‘11? Are we likely to hit the 30% sanction level in September 2014?
What is the source of our default risk? Why is this an institutional issue?
Do we have the right team in place to develop and execute default prevention strategies? If not, who do we need to include on our team?
What general approach to default prevention strategies need to be considered in our plan to address the source of default risk? How will they work? Will they focus on measureable strategies?
How will the plan be executed, evaluated and adjusted? How/when will we communicate to management?

21. Exercise: Getting To Where You Need to Be
Clarify how you will get there
My default prevention team includes (who) because (why).
The buck stops at (executive/manager name).
Our CDR risk profile suggests (what).
Our traditional default prevention approaches include (what).
Our student-success focused default prevention approaches include (what).
Here are the elements we still need to add to our plan. (list).
Here are the steps necessary to complete our work. (list; see template in your handout)

22. Leadership Buy-in
Global default risk isn’t going away. It will get worse over the next several years.
While outside servicers can help, reducing specific borrower risk is an inside job.
School leadership must be prepared to devote internal resources (people and time) to solve this problem.

23. Questions or Discussion?
Contact Information:
Dana Kelly
Regional Director/Trainer
Nelnet Loan Servicing