USA Funds Default-Prevention Council Member Profile: Tim Lehmann

Tim Lehmann believes that financial-aid professionals need to focus on more than just helping students determine how to pay for college. Financial-aid professionals, he says, need to become “trusted financial advisers” who can help students and alumni manage their education-loan debt over the long term.

Lehmann, who is the financial-aid director at Capella University in Minneapolis, has been helping students find ways to afford college for more than 20 years. During that time, he says he’s seen the nature of financial-aid packages change. The majority of aid in those packages generally used to be in the form of grants, while now aid packages include more loans.

“That much debt comes with consequences,” Lehmann says. “It’s important to help borrowers look at their education as an investment and help them manage the debt so it’s not a burden.”

Lehmann and his staff of 25 work daily helping Capella’s 16,000 students handle their education-loan debt. All of Capella’s students are adults taking classes online, and 84 percent of them are seeking either master’s or doctoral degrees.

“Our learners see higher education as an opportunity to advance their careers, and their approach to education is utilitarian — they are seeking solutions,” he says. Most already have loans for homes, undergraduate education and cars to repay. Three-fourths of students receive additional financial aid, including loans, to pay for their studies at Capella.

“We help our learners work up a budget and determine how to pay for their education whether they live in Manhattan, Kansas, or Manhattan, New York,” he says. All of this work is done by phone or through e-mail. Lehmann says it’s an efficient process, but sometimes it’s hard to confirm that the students are hearing his message.

New tools to help students
Lehmann says he’s always on the lookout for online tools and services that can help his students. He offers training from the USA Funds Life Skills^® financial-literacy program at brown-bag lunch sessions when doctoral students are required to meet with faculty. He plans to participate in the pilot of an online version of USA Funds Life Skills later this year.

He’s been a member of the USA Funds^® Default-Prevention Council for one-and-one-half years and says he has benefited from the best practices developed by the council. “The council has designed a strategic approach to default prevention and debt management,” he says.

Even though Capella’s cohort default rate is low, Lehmann says he is starting to see more students who are becoming delinquent in their payments, and he wants to stay ahead of that trend. He plans to begin using USA Funds Debt Manager^® soon by integrating the Web-based product into Capella’s existing debt-management process.

A test of financial aid
Shortly after Lehmann arrived at Capella six years ago he decided to take an online course through the school and take out a student loan to pay for the course. He wanted to test the Capella-learner experience.

Based on what he learned through that test, Lehmann adjusted the financial-aid section of the Capella Web site. He expanded the use of frequently asked questions, more-clearly identified links, reduced the use of confusing acronyms, and prominently placed a telephone number that people could call for more information or to get help with a particular part of the financial-aid process.

He continued his studies and, in 2004, earned a master’s degree in business administration. Like many of his students, he’s still repaying his student loans. And, he says, there’s still much more information he’d like to be able to share with students about repayment options.

“There’s more and more emphasis on debt management,” he says. “We need to take on the role of trusted adviser and help students manage their loan debt that will be with them in many cases for the next 25 or 30 years.”