At a workshop last week, George Covino of USA Funds® stressed to college presidents that they play an important role in helping their schools lower their student loan default rates.
The American Association of State Colleges and Universities, in partnership with the U.S. Department of Education and USA Funds, presented the 2014 Cohort Default Rate Workshop. The event drew 60 representatives from 20 schools to Washington, D.C. Attendees included financial aid professionals and college administrators, including presidents.
In a presentation specifically for presidents, Covino, USA Funds vice president, consulting, shared five key ways that college and university presidents can promote default prevention on their campuses:
1. Understand the issue at the campus level. Know how much your students borrow, students’ overall debt burden, whether debt management issues differ by program and degree, who at your school is most likely to default, and why your students default.
2. Know the pieces and players. Familiarize yourself with who is providing debt management assistance at your school, who is responsible for your school’s default prevention plan and its results, what financial literacy training your campus offers, and what types of reports are available to guide your default prevention efforts.
3. Support the effort. Shine your presidential light on the issue of default prevention, and let those on campus know that the issue is important to you and the entire institution.
4. Ask questions — and know what the answers mean. Learn your students’ average indebtedness, how your school is contacting borrowers, and how students are learning to manage money and time. If, for example, your students have a higher-than-average debt load, they may be at greater risk of default.
5. Broadcast the message. Make the value of debt management, default prevention and financial literacy a key part of your talking points.
In sessions facilitated by AASCU, representatives from the Department, and Vernetta Fairley, USA Funds director, special programs, other school officials discussed best practices for preventing default. All participants drafted action plans to implement at their schools to lower their default rates.
“This partnership with AASCU and the Department allows us to bring together key parties in default prevention to encourage schools’ commitment to debt management and financial literacy,” says Covino.