Nation’s leading guarantor delivers comprehensive default-prevention solutions

USA Funds posts another record-low student-loan-default rate

INDIANAPOLIS — USA Funds^®, the nation’s leading education-loan guarantor, has achieved another record-low student-loan-default rate. The U.S. Department of Education reports that USA Funds’ most-recent two-year cohort-default rate fell to 4 percent, down from a rate of 4.4 percent for the previous year.

Compared with the previous two-year cohort period, nearly 1,200 fewer borrowers who entered repayment on Federal Stafford loans guaranteed by USA Funds during fiscal 2003 had defaulted by the end of fiscal 2004.

USA Funds has reduced its default rate by nearly 29 percent during the past five cohort periods and by more than 65 percent during the most-recent 10-year period.

“USA Funds makes student-loan-default prevention a top priority,” said Carl C. Dalstrom, USA Funds president and CEO. “We offer a comprehensive array of default-prevention services to support efforts by our school- and lender-partners, as well as by student- and parent-borrowers to curb loan defaults.”

Among USA Funds’ default-prevention services are the following:

• Investment in default prevention — USA Funds invests in a team of 200 full-time professionals, backed by the latest technology and a sophisticated predictive model, to help borrowers avoid default. This team annually resolves more than 1 million seriously past-due student-loan accounts, preventing nearly $12 billion in loan defaults.
• USA Funds Debt Manager^SM — USA Funds recently introduced this free Web-based application, which permits schools to easily tailor communications to their student-loan borrowers to ensure borrowers stay on the path toward successful loan repayment.
• USA Funds Life Skills^® — This flexible program equips postsecondary institutions to educate their students about time- and money-management issues while they are on campus and following graduation. New USA Funds Life Skills materials address the special needs of graduate and professional students and other adult learners.
• Debt-management consultants — Experienced debt-management consultants review and assess campus debt-management activities and suggest improvements. These consultants also can help financial-aid administrators develop default-management plans and identify other action items to strengthen campus default-prevention efforts.
• Online best-practices manual — USA Funds offers a free online resource that provides financial-aid professionals ideas, tools and activities for enhancing their campus debt-management activities.
• Online student-loan counseling — USA Funds supports the leading online entrance- and exit-counseling services, with special options for annual Master Promissory Note counseling, graduate exit counseling and Perkins-loan counseling, as well as the MEDLOANS Online Loan Portfolio for medical students.
• Web resources for borrowers with loan-payment problems — By visiting www.loanpaymentsolutions.org/ on the Web, borrowers whose payments are 60 days or more past due can access their account information online, learn about the options for resolving their payment problems and take action to avoid additional costs.
• School reports — USA Funds offers financial-aid administrators reports that can help them track borrowers with payment problems to combat loan defaults.
• Borrower Debt Management Information Service — Using this service, schools can arrange for correspondence to be sent to their borrowers to advise them of their repayment options.
• Promoting student retention. USA Funds provides postsecondary institutions with an online best-practices manual and workshops to improve rates of student retention.

“Consistent with our mission as the leading education-loan guarantor, we will continue to invest in products and services that help prevent loan defaults,” Dalstrom said.