Presentation on theme: "Default Prevention Define Your Team & Develop Your Plan"— Presentation transcript:
1 Default Prevention Define Your Team & Develop Your Plan Dana Kelly, TrainerNelnet 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 riskDecide what steps your school will take to reduce default riskRepresent all parts of the institution (including management and students), which will contribute to risk reduction activitiesAllocate school resources to default reduction activitiesAssess the effectiveness of default reduction activities over time (Are they working?)
4 Team Members Members of the Default Prevention team may include: Senior school officialsRepresentatives from various officesStudent AffairsAcademicsEnrollment Management/AdmissionOtherStudent representatives
5 Define the Rules Have regularly scheduled meetings Distribute agenda/minutes, discuss agreed upon assignmentsProvide training about default and preventionAssign specific responsibilities in conjunction with your planEvaluate progress and adjust the planCelebrate and promote your successes
6 Getting into the Game Conduct a risk analysis first. Why? Creates understanding of who is defaulting and whyAllows for an increase in effectiveness of default prevention effortsReduces waste of time/resourcesProvides 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 withdrawalGradatedLicense examNo exit counselingUnsatisfactory SAPExcessive debtAcademic preparednessAcademic probationNo job in professionCertain majorsAttendance issuesStudent employmentLate majors
9 Examples of Why Poor study habits Finances/need Basic skill deficits Language barriersFeel unwelcome, no campus connectionFirst generation, no role models or family supportTransition difficultiesFinances/needRelationship issuesPhysical & mental health challengesDependent-careTransportationHousing
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 counselingFinancial literacy educationCollect more useful contact informationEarly-stage (repayment) assistanceLate-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 repaymentFinancial literacyGain additional or updated contact informationEngage borrowers through social media for increased exposure
14 Consider When it Makes Sense to Intervene Use social media to promote good loan repaymentAsk borrowers to contact you if they have questionsReiterate the importance of communicating with their servicer(s)Validate contact informationRe-enrollment or transfer assistanceEmployment counseling and search assistanceJob placement assistance
15 Consider When it Makes Sense to Intervene Contact borrowers in early-stage delinquency ( days) directlyContact those in late-stage delinquency (210+ days)By phone, if possibleReview servicer information and urge servicer contactBorrower engagement is a key factor in successful default prevention!
16 Leverage PointsIdentify 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 notesSend letters and/or sHand-address regular envelopesUse a stamp, not a postage meterConsider colored envelopes or paperPersonalize the letter and sign itPostcards can also be effective
18 Student Success ModelFocus on helping borrowers develop a healthy relationship with their educationIncrease program completion ratesDecrease program completion timeHelp non-completers find a jobSuccessful students = successful borrowersLeverage efforts to increase retention, graduation, and employmentThis model establishes cooperation campus-wideGoal is to ensure borrower completionTargets students at risk of unofficial or official withdrawal
19 Accountability Use what your data tells you. Identify your at-risk populationsReach out immediately with targeted campaignsHelp them remain in schoolIf they’ve already left, help them returnMay involve help to overcome obstaclesIf they will not return, help them understand their repayment obligationsSome think they do not owe anything because they leftLearn about their experiencesUse this info to help other students stay in school
20 Exercise: Evaluating Where You Are Evaluate your default prevention readinessWhat 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 thereMy 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-inGlobal 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 KellyRegional Director/TrainerNelnet Loan Servicing