Career Point Institute is a private career college with an enrollment of 1,100 in San Antonio, Texas. The school faces a number of default-prevention challenges:

• The typical Career Point Institute student has a background that suggests the likelihood of future difficulty in repaying a student loan. From unemployment to a lack of focus on financial responsibility, the challenges facing many students require Career Point to provide special programs to help keep the students on track to successful repayment.
• Draft figures indicate that the Career Point Institute’s draft default rate had risen to nearly 25 percent for the 2004 cohort.
• The institution’s enrollment is skyrocketing, to 1,150 students for fiscal 2005 from 430 the previous year. Retention and placement for this increasing student population are important.

Programs
Career Point Institute tackles its debt-management challenges through the following initiatives:

• Offering a “support-group” representative who attends financial-aid appointments prior to a student’s acceptance at the school and serves as a source of encouragement throughout the student’s time at Career Point.
• Refunding tuition and most fees in the event that a student leaves school within three weeks of beginning classes, as many of the school’s borrowers who default are those who did not complete their academic programs.
• Bolstering placement efforts and providing instructors, deans and division directors with bonuses for successful retention efforts.
• Asking for additional references from students during entrance and exit counseling and other counseling.
• Including USA Funds^® Debt Manager^® in efforts to contact borrowers. USA Funds Debt Manager is a Web-based communication tool that helps postsecondary institutions stay in contact with student-loan borrowers to promote successful loan repayment and prevent past-due loans and defaults. The school contacts borrowers 30 days prior to the end of their grace periods, with increased contact as borrowers advance in delinquency. The school also hired two full-time skip-tracers to help locate delinquent borrowers.
• Using USA Funds Debt Manager to help track default rates. Vice President Barry Berkovich constantly monitors the performance of the school’s default-prevention department. The school’s president tracks the school’s default-rate performance.
• Incorporating the USA Funds Life Skills^® financial-literacy program into two classes.

Results
The default rate for the 2005 cohort stood at 6.8 percent through April 2006, with an overall 2005 cohort-default rate anticipated to be below 10 percent based on calculations of data provided by USA Funds Debt Manager. Faculty, staff and students communicate more openly now about the responsibilities of repaying education loans. Survey feedback indicates that students now clearly understand these responsibilities, and faculty and staff note that they understand the role that default-prevention success plays in Career Point Institute’s mission.