USA Funds to Offer New Student-Loan Exit-Counseling Support
USA Funds® will offer a new value-added service to its customers beginning in February. Schools stretched for time and resources will be able to call on active or retired members of the financial-aid community to conduct group student-loan exit-counseling sessions for graduating students. With solid backgrounds in financial aid and expertise in Title IV programs, these USA Funds consultants are qualified to conduct the exit-counseling sessions according to federal regulations. Individual advising also will be available after group presentations.
USA Funds conducted a pilot of the exit-counseling program with seven schools at the end of 2003. Fred Stennis, director of financial aid, Oakwood College, was pleased with the results. "It was very beneficial to our students as well as my department. The presenter personalized the information with real experiences to make it relevant for the students. Their response was really positive. And, the program allowed me to free up my staff for other priorities," Stennis said.
Stennis hopes the program will help his institution's default rate continue its recent decrease. "With the help of USA Funds, the default rate has dropped over the last three years," Stennis reported. "As students apply the information they receive through the exit-counseling program, we're expecting a positive impact to the default rate."
The exit-counseling program focuses on five areas:
- Helping students determine where they can find information about how much they have borrowed from various loan programs.
- Informing students of borrower rights as required by the U.S. Department of Education. This includes information about the grace period, various repayment options, deferments and forbearances, borrower benefits, loan consolidation, access to the student-loan ombudsman, and tax benefits.
- Outlining borrower responsibilities as required by the Department. This section includes advice about keeping lenders and servicers informed of changes. Students also will learn how to make student-loan payments and understand the consequences of defaulting on a student loan.
- Assisting student-borrowers in the management of their personal finances. This section helps students determine what they can reasonably afford to pay each month, including their student-loan payment, based on estimated income. Students also will learn about the importance of reviewing credit reports and cautions in using credit cards, as well as sound financial principles and practices, such as developing a realistic budget, keeping accurate records, paying bills on time, and assessing wants versus their needs.
- Offering helpful Web sites related to jobs and student loans.
Exit-counseling materials
Students will receive a packet of information that includes the following USA Funds materials:
Students also will receive a copy of Quicken® 2004 New User Edition for Windows, personal-finance software that reinforces the sound financial principles and practices discussed in the exit-counseling session. This software also assists students in determining financial goals, setting up personalized budgets, tracking income and expenses, and managing their checkbooks and monthly bills.
This new exit-counseling program will be available to postsecondary institutions that use USA Funds as their primary guarantor. For more information, contact your USA Funds Services account executive.
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