is a private, four-year nonprofit institution located in Raleigh, N.C. The university has an enrollment of approximately 2,500 students. Many of these students are the first in their families to attend college, and a significant number come from economically disadvantaged backgrounds. In 2010-2011, approximately 93 percent of students received some form of financial aid. Approximately 68 percent were eligible for Federal Pell Grants and 85 percent qualified for subsidized student loans.
Based on its research, the university concluded that by increasing student retention, it also could lower its student loan default rate. In response, Shaw University established a default prevention and retention committee, including representatives of the faculty, staff and administration.
One of the committee’s first initiatives was to conduct a survey during freshman orientation to identify students who were at risk of dropping out of school and in need of academic or social intervention. Based on the survey results, the institution launched a pilot mentoring program. In conjunction with that program, and in partnership with its First Year Programs office, it presents financial literacy programs. During the 2011-2012 academic year, 625 students participated in 27 financial literacy and financial aid workshops, covering topics that included anticipated salary information based on field of study, loan repayment options, budgeting, and good debt versus bad debt.
Shaw University conducts face-to-face exit counseling sessions for graduating seniors. Students receive information about their lenders, various repayment options and information about the amount of debt that they have incurred while in school. Students also have the option of completing exit counseling online.
Following graduation, Shaw University takes an aggressive approach to reach out to borrowers who have fallen behind in the repayment of their student loans. Financial aid staff make phone calls and send emails to reach out to delinquent borrowers, beginning when a former student is more than 30 days past due on a student loan payment. Two dedicated staff members work modified work schedules that allow them to make phone calls to delinquent borrowers during the evening hours twice a week. In addition, the financial aid office conducts a monthly phone “blitz,” in which all six financial aid counselors make evening telephone calls to borrowers whose loan payments are more than 180 days past due.
Shaw University reports that its 2010 draft two-year cohort default rate fell to 13.2 percent, down from its official rate of 22.6 percent for 2009. The university also notes that its students are better informed on personal finance topics, such as student loans, budgeting, credit cards and the importance of making better choices about how they spend their money.