USA Funds Debt Manager Slashes Ivy Tech Bloomington’s Default Rate

Financial Aid Director Sue Allmon credits USA Funds^® Debt Manager^® with helping her to cut by more than half the cohort-default rate at Ivy Tech Community College in Bloomington, Ind.

She started using the program two years ago to contact students who were delinquent in repaying their student loans. At the time, the school’s cohort-default rate was 16.6 percent. Ivy Tech Bloomington’s 2004 draft cohort-default rate is 6.2 percent. If this figure represents the school’s final rate for that cohort, it will be a substantial drop from the 2003 cohort rate of 13 percent.

“I was ecstatic when our default rate dropped by so much this year,” Allmon says. “It just wasn’t that hard for us to do.”

USA Funds Debt Manager is a comprehensive Web-based communication tool that makes it easy for postsecondary institutions to stay in contact with student-loan borrowers to promote successful loan repayment and prevent past-due loans and defaults.

Allmon’s success has led some of the other 22 Ivy Tech campuses in Indiana to begin using USA Funds Debt Manager. She helped the Fort Wayne and Terre Haute campuses get up and running on USA Funds Debt Manager and has offered training to other campuses.

Ivy Tech Bloomington has about 4,000 students and has experienced double-digit enrollment increases during the past couple of years. Many students complete their associate degree and continue their studies at neighboring Indiana University to obtain their bachelor’s degrees.

Further success expected
About 80 percent of students use some sort of financial aid. For the upcoming academic year, Allmon expects to see an increase in the number of student loans taken out because the college plans to begin including student loans with its financial-aid-award packages. USA Funds Debt Manager, she says, could have a bigger impact in years to come if Ivy Tech Bloomington students take on more student-loan debt.

Allmon, who sends out 50-to-75 letters a week to delinquent student-loan borrowers and makes daily phone calls, plans to add e-mail communication and additional letters to her efforts in the coming year.

Currently she mails letters to borrowers who are 60-to-120-days delinquent, 121-to-180-days delinquent and 181-to-270-days delinquent on their loan payments. “We’re adding letters for students who are almost 30 days delinquent because that is when their loans are sent to credit bureaus,” she says. “We’re also adding letters notifying students when forbearances and deferments are set to expire.”

Borrowers appreciate efforts
Allmon says her students appreciate the assistance her office can offer them. “They remember us as being helpful, and they’re impressed we’re contacting them,” she says. “I tell them I’m their bulldog. I become their middle man and help them get their paperwork filed.”

Allmon says lowering the cohort-default rate at Ivy Tech Bloomington is a group effort with responsibilities shared throughout the financial-aid office. She spends about two hours a day on the effort, and a colleague handles all the communication with borrowers who are nearing the end of their six-month, post-school grace period.

The best feature of the tool, according to Allmon, is the call queue. “This feature automatically tracks the communication history we’ve had with students and whether we’ve been successful,” she says. “When I sign on to the computer in the morning, USA Funds Debt Manager shows me who to call that day, what letters to send and what reports to generate.

“I consider USA Funds Debt Manager to be another staff person in our office.”