How High is Too High? Focusing Your Limited Resources to Effectively Reduce your Rising Cohort Default Rate Dave Macoubrie Vice President of Repayment Solutions

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 © 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.3

Repayment Success © 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.4

What are our challenges? 5 © 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia. Persistently high unemploymentHigh student loan delinquency ratesMore students are borrowing more moneyDecreased state fundingTransition from 2-year to 3-year CDR calculation

Trends in National Default Rates © 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.6

Default Rates# of Schools% of Total Below 15% 3,32164% 15%–20% 82016% 21%–29.9%75014% 30% and above 2936% year Cohort Default Rates © 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.7

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.8

UNDERSTANDING THE COHORT DEFAULT RATE CALCULATION

Cohort Repayment (Denominator) © 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia. 10 Cohort year is the same as Federal Fiscal Year Based on borrowers not number of loans or dollarsBased on when the borrower enters repayment

Cohort Default (Numerator) © 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia. 11 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 October 1, 2010September 30, 2011 September 30, 2012September 30, 2013 Track Default Status FY year CDR © 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia. 12

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

Where can I make a difference? 14 © 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.

3-Year Cohort Default Rate Schedule © 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia. 15

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.16 Training (In-School)

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.17 Training (In-School) Entrance and Exit Counseling Campus-wide team support Financial Education Extenuating circumstances Data Analysis & At-Risk students

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.18 Example Kick-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.

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.19 Race Day (Grace)

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.20 Race Day (Grace) Send s Make Telephone Calls Offer Financial Education Use the NSLDS Early Stage Delinquency Assistance report

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.21 Riding the Repayment Race NSLDS DELQ01 Report

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.22 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 cant default by then end of the year, what efforts do I provide?

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.23 How do I help? Send s Protect Personally Identifiable Information Use multiple addresses when possible Allow them to op-out if they choose Include a telephone number they can call back to Include self-help websites if you have them

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.24 How do I help? Send letters Can 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 possible Try different types of enveloped and colors to entice them to open.

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.25 How do I help? Make Telephone Calls Verify identity before providing any information Have the servicer name and telephone number quickly available Call at different times of day and days of week. Provide a call back number when you leave messages Have forms ready to be ed Conference call student with servicer when possible

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.26 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?

© 2013 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.27 Crossing the finish line

QUESTIONS?

Contact Information Dave Macoubrie Vice President of Repayment Solutions Inceptia.org Follow us on Twitter

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