Transcript Define Your Team & Develop Your Plan

Default Prevention
Define Your Team &
Develop Your Plan
Dana Kelly, Trainer
Nelnet Partner Solutions
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.
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?)
Team Members
Members of the Default Prevention team may include:
• Senior school officials
• Representatives from various offices
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Student Affairs
Academics
Enrollment Management/Admission
Other
• Student representatives
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
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
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.
Examples of Who
• Never contacted
• Excessive debt
• Developmental
studies
• Academic
preparedness
• Late admits
• Academic probation
• Early withdrawal
• No job in profession
• Gradated
• Certain majors
• License exam
• Attendance issues
• No exit counseling
• Student employment
• Unsatisfactory SAP
• Late majors
Examples of Why
• Finances/need
• Poor study habits
• Relationship
issues
• Basic skill deficits
• Physical & mental
health challenges
• Feel unwelcome, no
campus connection
• Dependent-care
• First generation, no
role models or family
support
• Transportation
• Housing
• Language barriers
• Transition difficulties
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.
Possible Intervention Opportunities
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Enhanced entrance and exit counseling
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Financial literacy education
• Collect more useful contact information
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Early-stage (repayment) assistance
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Late-stage (repayment) assistance
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)?
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
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
Consider When it Makes Sense to Intervene
• Contact borrowers in early-stage delinquency (30-90
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!
Leverage Points
Identify your campus leverage points. Use these to
gain active borrower participation.
• Admissions
• Entrance and exit counseling
• Probation/SAP
• Registration
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 e-mails
– 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
Student Success Model
• Focus on helping borrowers develop a healthy
relationship with their education
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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
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
Exercise: Evaluating Where You Are
Evaluate your default prevention readiness
1. What was our school’s FY ‘10 CDR? Draft ‘11? Are we likely to hit
the 30% sanction level in September 2014?
2. What is the source of our default risk? Why is this an institutional
issue?
3. 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?
4. 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?
5. How will the plan be executed, evaluated and adjusted? How/when
will we communicate to management?
Exercise: Getting To Where You Need to Be
Clarify how you will get there
1. My default prevention team includes (who) because (why).
2. The buck stops at (executive/manager name).
3. Our CDR risk profile suggests (what).
4. Our traditional default prevention approaches include (what).
5. Our student-success focused default prevention approaches
include (what).
6. Here are the elements we still need to add to our plan. (list).
7. Here are the steps necessary to complete our work. (list; see
template in your handout)
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.
Questions or Discussion?
Contact Information:
Dana Kelly
Regional Director/Trainer
Nelnet Loan Servicing
[email protected]
336.848.6441