Nation’s leading guarantor enhances default-prevention services

USA Funds Records Reduction in Loan-Default Rate

INDIANAPOLIS — USA Funds^®, the nation’s leading education-loan guarantor, has recorded a decline in its most-recent student-loan default rate. According to final cohort-default-rate figures released by the U.S. Department of Education, USA Funds’ default rate fell to 4 percent of the borrowers who entered repayment during fiscal 2005, a decline from the 4.8-percent rate that USA Funds recorded for the previous cohort of borrowers.

USA Funds' final 2005 cohort-default rate is well below the average of 4.8 percent for all guarantors.

Cohort-default rates measure the percentage of all Federal Stafford-loan borrowers entering repayment in a given federal fiscal year who default on their loans by the end of the following fiscal year.

“Although we are pleased with these results, USA Funds continues to develop additional services to promote successful student-loan repayment,” said Carl C. Dalstrom, USA Funds president and CEO.

During the coming months, USA Funds will introduce the following new services:

• USA Funds Retention and Repayment Success^SM is a suite of services, currently being tested by a select group of schools, that will help postsecondary institutions enhance their student-retention and graduation rates, educate students about sound time- and money-management practices, help schools stay in touch with their borrowers, and deliver convenient loan-counseling services. USA Funds’ team of debt-management consultants will recommend components of the suite of services based on a consultation with staff of each school.

• USA Funds Life Skills^®, the financial-literacy program for college students, will be offered online and in Spanish-language formats. The online format will permit schools to customize the curriculum to the needs of specific student groups; more easily assess the effectiveness of the presentation; and permit students to access the information on their own and at their convenience, in classroom settings or in a combination of self-directed and classroom-assisted sessions. USA Funds developed the Spanish-language materials to address special cultural issues of Latino students and their families.

• USA Funds Loan Counselor^SM, USA Funds’ suite of custom online borrower-counseling services, is being enhanced with new entrance- and exit-counseling materials designed for graduate and professional students.

• Solving the Retention Puzzle, USA Funds’ online toolkit of best practices in student retention, is being upgraded to provide postsecondary institutions with an interactive resource they can use to develop plans for and evaluate their progress in promoting student success.

“As part of our nonprofit mission to enhance postsecondary-education preparedness, access and success, USA Funds will continue to invest heavily in services that spare borrowers and taxpayers the additional costs of loan default,” Dalstrom said.