Early and regular communication with borrowers who have become delinquent on their student loans is a critical step in preventing default.
- Early in delinquency: Start efforts to contact delinquent borrowers in the 60 to 90 days past due range. Don’t wait until later in the delinquency period to begin outreach, when a delay may negatively affect your cohort default rate.
- Continued communication: Communicate at planned intervals of delinquency with progressively more forceful language about the consequences of default.
- Borrowers in early and late stages of delinquency respond to different approaches.
- Don’t be afraid to try a variety of ways to communicate with students in different stages of delinquency.
- Preventing future problems: Track students in deferment and forbearance to communicate with them, in order to prevent a recurrence of delinquency.
USA Funds Borrower ConnectTM
can help in your efforts to reach out to borrowers. A Web-based tool, USA Funds Borrower Connect automates borrower communication through telephone, letter and email campaigns and ultimately helps you improve your cohort default rate.
Communications encourage borrowers to seek assistance from lenders or servicers to restore their loans to good standing. USA Funds Borrower Connect provides letter and email templates that you can personalize with school-specific information and images.
USA Funds Borrower Connect also allows you to create on-demand reports by servicer or for an entire cohort of borrowers. For example, a Delinquency Aging Report provides borrower loan delinquency information and forecasts best- and worst-case default rates.