Nation’s leading education-loan guarantor sets new default-prevention records
USA Funds prevents more than $14 billion in loan defaults
INDIANAPOLIS — USA Funds®, the nation’s leading education-loan guarantor, reports that its default-prevention efforts averted nearly $14.4 billion in potential loan defaults during the fiscal year ending Sept. 30, 2005. USA Funds supports a team of 200 full-time professionals who work with student- and parent-borrowers whose payments are 60 days or more past due to help them avoid default.
“Our default-prevention success helped thousands of borrowers avoid additional costs and serious, long-term damage to their credit, while saving federal taxpayers billions of dollars in potential costs,” said Carl C. Dalstrom, USA Funds president and CEO. “Our efforts also helped postsecondary institutions maintain low cohort-default rates and minimized the financial losses to education lenders from loan defaults.”
During fiscal 2005, USA Funds’ default-prevention efforts resolved more than 1.1 million past-due education-loan accounts, successfully averting default on more than 93 cents of every dollar of past-due loans on which lenders had requested USA Funds’ default-aversion assistance.
USA Funds also introduced several new products and services designed to curb loan defaults. These new services include the following items:
Promoting ongoing contact with student-loan borrowers. USA Funds introduced a new Web-based program that helps postsecondary institutions stay in touch with current and former students to promote successful loan repayment. USA Funds Debt ManagerSM gives schools easy access to their borrowers’ information and permits them to design their own strategies for contacting borrowers by mail or telephone.
Loan-payment solutions for borrowers. USA Funds enhanced the Web site, www.loanpaymentsolutions.org, that steps borrowers through the process of requesting relief from loan-payment problems.
Financial literacy for graduate and professional students. USA Funds introduced new components of its award-winning financial-literacy program, USA Funds Life Skills®, to help married students and medical students address their unique challenges and to encourage graduate students and other adult learners to follow realistic financial plans while they pursue their studies.
Loan counseling for medical students. To equip medical schools to more easily and effectively help their students manage their education debt, USA Funds developed MEDLOANS Online Loan Portfolio, an online exit-counseling program that displays each borrower’s individual education-loan information.
“As the leading guarantor in the Federal Family Education Loan Program, we’re committed to delivering the most-effective default-prevention services available,” Dalstrom said. “We look forward to announcing during 2006 several exciting additions to our comprehensive array of default-prevention and debt-management services.”