USA Funds Debt Manager Helps University of Hawaii-Hilo Reach Its Lowest Default Rate

When Jeff Scofield learned his school’s 2005 cohort-default rate was 2.8 percent — the lowest in University of Hawaii-Hilo history — he was ecstatic. The rate represents a 40-percent drop from the school’s previous cohort-default rate.

Scofield, University of Hawaii-Hilo’s financial-aid director, attributes the default-rate success to a variety of factors — including the school’s use of USA Funds Debt Manager^®.

“USA Funds Debt Manager has given us the tools to communicate with our students effectively and timely and without a lot of effort,” he says. “We do not have a comprehensive debt-management plan, but we are an example of how you can get very good results by doing some things.”

USA Funds Debt Manager is a Web-based communication tool that helps financial-aid administrators connect with borrowers and prevent student-loan defaults.

Scofield says he began regularly using USA Funds Debt Manager about a year ago. The school starts sending letters to students when they are 60 days delinquent. University of Hawaii-Hilo sends letters again at 121 days of delinquency and 181 days of delinquency. When students reach 200 days of delinquency, they also receive phone calls, which the school makes using USA Funds Debt Manager’s call-queue feature.

“It’s very easy to get letters to students,” Scofield says, noting the school sends out about 50 letters each month. “We have two or three different versions, but our basic message is, ‘Please contact us so we can help you.’ We’re a friendly name they remember from the financial-aid office.”

Reaction from students has been positive, he says, noting that sometimes students just need a lender phone number or address or a proper form. Based on the school’s success, Scofield says he is planning to start using USA Funds Debt Manager’s e-mail function to regularly communicate with students through e-mail.
 
“USA Funds Debt Manager has allowed us to have an impact without having a staff member dedicated to debt management and default prevention,” he says.

Little effort, big results
Of the seven staff members in the school’s financial-aid office, one person does all the work associated with the federal-loan program — including default-prevention activities. In the last five years federal student-loan volume has doubled to $6 million a year from about $3 million a year.

Scofield’s office spends about two hours a month communicating and following up with borrowers. “If a school thinks it doesn’t have enough staff or time to build a really good debt-management program, then USA Funds Debt Manager is the perfect tool. You can put in a little bit of effort and get very good results,” he says.

He says the best feature of USA Funds Debt Manager is its ease of use. “All the information is in one place. It’s updated regularly. It’s so easy to run reports rather than getting a 100-page document to sort through,” Scofield says, noting that users can choose categories for generating reports, such as a specific number of days delinquent or type of loan. “It really allows you to focus on the students at issue.”

The financial-aid office was able to implement the program and get USA Funds Debt Manager up and running without computer-programming help or assistance from other school departments.

“We just put it in place and started using it,” he says. “This is a really good tool to use to start building a debt-management and default-prevention program.”