USA Funds Debt Manager Simplifies Default-Prevention Work for Hawaii Pacific University

Carol Hutaff says parents of prospective Hawaii Pacific University students ask what the school’s cohort-default rate is, and they are pleased when they learn that the current rate is 2.5 percent.

“They feel we care, that we help our students along,” says Hutaff, director of loans for the university. “If a school has a high default rate, some parents think their students might not get the attention they need.”

In the two-and-one-half years since the school started using USA Funds Debt Manager^®, providing assistance to students has become much simpler for Hutaff.

“USA Funds Debt Manager is a gift, a great tool,” she says, noting she used to have to wade through different lists of borrowers. “It really helps me maximize my results.”

Now, every Tuesday Hutaff gets a report of student-borrowers who are delinquent on their student loans. The report shows how many days delinquent each borrower is and when the borrower will go into default.

“I can see who is falling into which category — I don’t miss anyone,” she says.

Hutaff says she contacts students who are closest to default first. She sends 12-to-14 letters each week, and she stamps “urgent” on the envelopes to make sure students open them. Then she follows up with phone calls.

Fostering communication
“Talking to students on the phone helps you find out the reason for the delinquency, and you can answer their questions,” she says.

“The biggest fear students have is communicating with their lenders. They look at the total amount they owe instead of the monthly payment, and they feel there’s no way they can repay that much.

“We help to dissolve the fear and open the communication lines to the lender. I tell them I’m here to help them,” she says. Hutaff also sends deferment or forbearance forms to students, and tells them where to find these forms on the Internet.

“Most students want to repay their loans, and when they understand the amount of their monthly payment, their fear dissolves,” she says.

About 9,000 students are enrolled in Hawaii Pacific University. The school’s main campus is in downtown Honolulu, with a residential campus nearby in Kaneohe and campuses on seven military bases on Oahu. Most students are right out of high school, and about one-third receive some kind of financial aid. Students hail from every state in the nation and from more than 100 countries.

Lowering the default rate
The school’s cohort-default rate hovered around 10 percent in the late ’90s and was between 3 and 4 percent when Hutaff started using USA Funds Debt Manager. The 2004 final cohort-default rate was 2.5 percent, and Hutaff says she is working to get the rate even lower.

“USA Funds Debt Manager gives you a system that allows you to focus on those students who really need help before they default,” she says. “And it’s so user-friendly. Anyone can use it.”

Default-prevention activities make up only a portion of Hutaff’s duties, so she says she’s thankful USA Funds Debt Manager has given her more time to work with students.

“I’ve been able to spend much more time counseling students and encouraging them to return to school to finish their degrees,” she says.