Once on the brink of sanctions for high cohort default rates, Rust College and Ozarka College now are enjoying default prevention success, thanks to borrower outreach and financial literacy education.
Suprena Duncan of Rust College and Laura Lawrence of Ozarka College reported on their schools’ approaches to default prevention during a USA Funds® webcast last week.
Duncan told the webcast participants that, as her school worked to lower its cohort default rate, it struggled to efficiently analyze borrower data and educate students about money management and repayment. To address those issues, Rust College implemented USA Funds Borrower Connect™ in October 2011 and USA Funds Life Skills® in September 2012.
The result? Rust College’s 2010 three-year cohort default rate was 32 percent. Its draft 2011 rate is down to 24 percent.
“USA Funds Life Skills and USA Funds Borrower Connect are helping to drive our default rate down,” said Duncan, associate financial aid director at Rust College, a historically black college in Holly Springs, Miss.
USA Funds Borrower Connect is a borrower communication tool. And USA Funds Borrower Connect InTouchSM representatives work on behalf of Rust College to contact and individually counsel borrowers about their options for repaying their education loans.
USA Funds Life Skills is an online financial literacy and student success program that equips institutions to teach students to manage their time and money wisely while they are on campus and after graduation.
Students in Rust College’s first-year experience class take all USA Funds Life Skills courses, and graduating seniors also receive USA Funds Life Skills training. USA Funds Borrower Connect provides the school with a streamlined approach to tracking loan data and reaching out to borrowers.
And Rust College connects with borrowers on Facebook to help ensure successful repayment — a tactic that Ozarka College also employs.
Based in Melbourne, Ark., Ozarka College has four financial aid staff members who are responsible for students at four campuses. Those staff members juggle duties that once included tracking borrower information through cumbersome methods and visiting classes to provide financial literacy information.
As a result, said Lawrence, Ozarka College financial aid director, the school wasn’t reaching all of its students with a consistent financial literacy and student success message. And financial aid staff struggled to get control of borrower information and counsel borrowers about repayment.
Ozarka College began using USA Funds Borrower Connect in November 2012, and also relies on USA Funds Borrower Connect InTouch to counsel the school’s borrowers about repayment.
“I cannot say enough good things about USA Funds Borrower Connect,” Lawrence said. “It’s revolutionized the way we contact our delinquent borrowers.”
The school then began offering USA Funds Life Skills in August 2013, reaching students in counseling, in a college success course, and in a college capstone class.
Ozarka College’s 2010 three-year cohort default rate was 42 percent. Its draft three-year rate for 2011 has tumbled to 24.6 percent.
View the entire June 11 webcast, “Innovative Approaches to Borrower Communication and Financial Literacy Education,” by downloading it from the USA Funds Resource Library. Contact USA Funds to learn more about preventing student loan default and about USA Funds’ tools and solutions.