UNCF ICB ACCREDITATION AND STUDENT LOAN DEBT MANAGEMENT INSTITUTE

D E F A U L T P R E V E N T I O N B E S T P R A C T I C E S P R E S E N T E D B Y A N T O N I O H O L L O W A Y ( H U S T O N - T I L L O T S O N ) A N D V A L E N T I N O B R Y A N T ( S H A W U N I V E R S I T Y )

What is Default?

 Failure to repay a loan according to the terms and conditions agreed upon when the borrower signed the Master Promissory Note.

 Default occurs when the borrower becomes 360 days delinquent with payments  The consequences to the borrower and the institution are severe.

Consequences of Default for Schools

High Cohort Default Rates can     Negatively reflect school quality Result in Provisional Certification Result in loss of Title IV eligibility Minimize access to Private Loans

Seven Reasons Students Default

       Entered Military Service Low Wages / Income Trouble With Personal Relationships Unemployed High Medical Bills Married Someone With High Student Loan Debt Lack of Knowledge

What Huston-Tillotson University Have Implemented to Lower Default Rates

(In-School Efforts)

Enhanced Entrance Counseling  Provide Financial Literacy and Scholarship Workshops  Complete in-school deferment forms for prior loans  Explain Satisfactory Academic Progress (SAP)  Encourage students to pay accrued interest while in school  Require Financial Literacy for all freshmen and transfers  In-person exit interview for official withdrawals

Withdrawn Students Efforts

  Encourage student to re-enroll Implement a withdrawal process where student must see a retention officer    In-person exit interview for official withdrawals Mail exit package to unofficial withdrawals Use servicer to mail grace letters  Use servicer to contact borrowers that withdraw and become delinquent on loans

Grad Student Efforts

   Require in-person exit counseling for graduates Require financial literacy for graduates Use servicer to mail grace letters   Use servicer to contact graduates that become delinquent on student loans Provide institution contact information to all graduates

Partner With External Agencies

  Collaborate with outside agency on writing a default prevention plan (TG assist Huston-Tillotson) Seek grant opportunities to help defray the costs for equipment, workshops, and additional employees, etc. (Huston-Tillotson received $100,000.00 from USA Funds)

What Shaw University Have Implemented to Lower Default Rates 2009: 30.2% 2010: 19%

Three Phase Approach

“Where Are We?” and “How Did We Get Here?” Creation of Default Prevention / Retention Committee Strategic Implementation Operation Default Rate Reduction

“Where Are We?” and “How Did We Get Here?”   We worked with the Office of Strategic Planning Institutional Research & Effectiveness (OSPIRE)  Based on 2009 2 year Draft Rate (23.1%)  233 Student Defaulted  183 Withdrawals  49% Freshmen; 29% Sophomore; 13% Junior; 14% Seniors and 1% Grad Students Low Retention Rate = High Default Rate and High Retention Rate = Low Default Rate

Creation of Default Prevention/Retention Committee Vice President of Student and Academic Affairs Financial Aid Default Prevention Academic Success OSPIRE Admission First Year Program Ensures default prevention goals and plans are met Creates across-the institution “BUY-IN” Helps justify additional resources if needed Analyze data, resources and current practices

Strategic Implementation Operation Default Rate Reduction: Phase I

Stopping the Monument

    Adjusted two staff members work hours Monthly phone Blitz (one night a month all FA counselors stay late to make calls to delinquent borrowers) Mass mailing via USPS and emails Social Media

Strategic Implementation; Phase II: Financial Literacy/Awareness

Student Outreach

      New Student Orientation  Breakout sessions for parents and incoming freshmen Early Alert System  During Freshmen Orientation, students complete an online survey, which allows the university to identify potential At-Risk Students Monthly Newsletters Financial Literacy Workshops Implementation of USA Funds Life Skills Development of Student Peer Financial Literacy Mentors

Faculty/Staff Outreach

   Monthly Newsletters Attend Faculty Meetings once per semester  To promote Default Awareness Partnered with some faculty members who allowed us to participate in their class discussions about Financial Literacy

Contact Information

Valentino Bryant Shaw University Default Prevention Administrator 919-546-8434 [email protected]

Antonio Holloway Huston-Tillotson University Director Financial Aid 512-505-3031 [email protected]