Default Management System promotes successful repayment, lower default rates

USA Funds helps colleges maintain contact with student-loan borrowers

INDIANAPOLIS — As graduates leave campus this spring, USA Funds^®, the nation's leading education-loan guarantor, is offering their colleges software to help them stay in contact with student-loan borrowers and promote successful loan repayment. Default Management System, a PC-based software application, tracks borrower and loan information permitting colleges to carry out customized letter, e-mail or calling campaigns to their borrowers.

"Financial-aid professionals agree that contact with borrowers, while they are on campus and following graduation, is key to successful loan repayment," said Carl C. Dalstrom, USA Funds president and CEO. "DMS provides financial-aid administrators with another tool to help combat loan defaults."

With DMS, schools receive data from the CLASS loan-servicing system every month via e-mail. Schools also can import files from other service providers and systems, such as the EAGLE loan-guarantee system, as long as the file matches one of the formats that DMS recognizes. After importing the file, schools can use the data to generate letters, mailing labels, call lists and reports.

Using DMS, schools can design their own strategies for contacting borrowers by selecting which borrower groups to contact and when and how to contact them. This targeted communication strategy helps schools achieve maximum impact with their borrower contacts.

"DMS has made it so much easier to track our borrowers who are delinquent in their loan payments," said Roxann Bedia, director of financial aid at Hawaii Business College in Honolulu. "With DMS, we get the added benefit of receiving the most current addresses and telephone numbers for our borrowers."

Hawaii Business College uses DMS as part of a comprehensive default-prevention program that has significantly reduced the college's cohort default rate during the past two years.

USA Funds provides DMS free of charge to postsecondary institutions that meet any of the following criteria:

• Use USA Funds as their primary guarantor.
  
• Are designated as a minority-serving institution by the U.S. Department of Education.
  
• Are located in one of the states that USA Funds serves as the designated guarantor. Those states are Arizona, Hawaii, Indiana, Kansas, Maryland, Mississippi, Nevada and Wyoming.