Yavapai College Lowers Default Rate With Help of USA Funds Debt Manager

Once a month Yavapai College student-loan borrowers who are delinquent repaying their loans receive letters from Debbie Beck, the school’s assistant financial-aid director. Some students also get phone calls.

In her contact with these borrowers, Beck says she tries to determine each student’s situation and ways that she might be able to help the student get back on track with repaying the loans.

“A lot of the time we get a response, and students tell us they are so glad we contacted them,” Beck says. “They are surprised at how much help we can give them.”

Beck coordinates this communication with students by using USA Funds^® Debt Manager^®. She credits USA Funds Debt Manager with helping the college reduce its cohort-default rate by nearly 30 percent to 9.1 percent for 2004. In 2003 the cohort rate was 12.8 percent.

“We are thrilled our rate is now under 10 percent,” Beck says.

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.

Yavapai College has six campuses throughout Arizona and about 8,800 students pursuing associate-degree and certificate programs as well as preparing to transfer to four-year universities. The college enrolls a range of students, including those just out of high school as well as nontraditional adult students.

USA Funds Debt Manager simplifies communication with borrowers, Beck says. “Once you get it set up, you don’t have to put a lot of work into it,” she says. “I’m thankful it’s a workable product that I can fit into my overall job.”

Beck uses different strategies for different groups of borrowers. Each Tuesday she sends out a batch of letters. USA Funds Debt Manager keeps track of who gets each letter and when it was sent, and also tracks whether she has called the borrower.

She starts sending letters to borrowers when they are 60 days delinquent on their education loans and continues monthly communication until she gets a response. As borrowers get closer to default, the language in the letters indicates the increasing urgency for them to take action.

“Most of the students I reach are completely lost about what to do about their loans,” Beck says. “They aren’t working or there’s some other problem.” 

Beck takes an active role in helping these borrowers figure out their options. She determines whether they are eligible for deferment or forbearance. She obtains the forms for students and sends completed forms to borrowers’ lenders or servicers. Additionally, she follows up to make sure the forms are processed.

“As a school we can take a little bit different approach with students because we don’t collect the money,” Beck says. “I always ask students about their situations and how I can help them with their repayment options.”

Beck also uses USA Funds Debt Manager to call all student-loan borrowers who are nearing the end of their post-school, six-month grace period to make sure they are ready to begin repaying their loans.

Beck says she is excited about USA Funds Debt Manager’s newest option — e-mail communication. “All of the schools were asking for an e-mail format, and USA Funds listened to them,” she says. “It is live now, and it gives us a whole other strategy to use with delinquent borrowers.”