Real-Time Data Plus Regular Contact Equals Default Prevention Success

Real-Time Data Plus Regular Contact Equals Default Prevention SuccessThe use of real-time data to stay in regular contact with borrowers is helping two schools realize default prevention success.

Tara Zydor of YTI Career Institute and Chuck Schoppert of Star Career Academy shared their default prevention strategies during a USA Funds® webcast last week.

YTI Career Institute serves more than 1,700 students in south-central Pennsylvania and northern Maryland. Its default prevention goal, Zydor said, is to counsel as many students as possible while those students are still in attendance, to ensure that borrowers are prepared to repay their loans.

“The more they see you and the more comfortable they are with you, the more they will come to you in the future” for student loan repayment assistance, said Zydor, YTI’s default management coordinator.

YTI has included USA Funds Borrower ConnectTM in the school’s default prevention efforts for two years. The Web-based borrower communication tool provides real-time data as well as communication campaign reports that Zydor says are critical in ensuring borrowers receive repayment messages that are appropriate and timely.

For Star Career Academy, the data that USA Funds Borrower Connect provides helps staff track which students most need default prevention assistance. The school, which has used USA Funds Borrower Connect for a year, also relies on the tool’s reports to help keep loan information up to date for each cohort of borrowers.

Schoppert is corporate director of default prevention for Star Career Academy, which has campuses in New Jersey, Pennsylvania and New York. He says the institution’s regular use of the real-time information that USA Funds Borrower Connect provides led to results that were “almost immediate.”

The school, he said, was on the verge of federal sanctions, with a cohort default rate of more than 30 percent that appeared to be headed to 40 percent. Now the school’s draft cohort default rate has dropped to 25 percent.

YTI Career Institute and Star Career Academy begin their default prevention efforts early in students’ careers at their schools, with online and in-person counseling, classroom presentations, and other campus and community financial literacy events.

The schools continue their contact with borrowers after they leave school, relying on USA Funds Borrower Connect’s phone, email and mail campaigns.

Those campaigns to borrowers in repayment yield better results, Zydor and Schoppert said, because default prevention staff educate students about money management and build relationships with them throughout their academic careers.

“When I started in default prevention some years back, I was the one doing all the dialing” in calls with student loan borrowers, said Schoppert. “Now I can honestly say that we get a lot of incoming calls, and it’s because of the time that we put in while we have those students in our classes.”

View a recording of the April 16, 2014, webcast, “Default Prevention Strategies: Early Contact is Key,” in the USA Funds Resource Library. Contact USA Funds to learn more about debt management planning and USA Funds’ default prevention tools and solutions.