USA Funds Debt Manager Helping Rust College Cut Its Default Rate

When Suprena Duncan started using USA Funds Debt Manager^® last year, she had no idea she would see dramatic results in just one year.

Yet that’s just what the associate financial-aid director at Rust College experienced. The school’s draft cohort-default rate for 2005 indicates a drop of 5.5-percentage points from the 2004 rate.

Duncan, who’s worked at the small liberal-arts college in Holly Springs, Miss., since 1985, says USA Funds Debt Manager gives her a variety of information she needs in one place and saves her time.

“All I have to do is sign each letter,” Duncan says. “I used to have to go through different reports. Now everything is right there in front of me.”

Most weeks she sends 100-to-150 letters to students who are behind — many of them 180-to-270 days delinquent — in making payments on their student loans. She personally signs each letter on college letterhead. She also uses USA Funds Debt Manager with her telephone- and e-mail-communication strategies with students.

Offering repayment help
When she connects with students, Duncan helps them determine whether they are eligible for a deferment or forbearance, and then she directs them to the appropriate Web sites for the forms. She’s even helped some students complete the forms step by step and then followed up with them to ensure they mailed the forms.

“I’ve had some students ask me, ‘Miss Duncan, when are you going to stop sending me letters?’ and I say, ‘I’m not going to quit until you come off my list.’”

More than 900 students attend Rust College, which is located about 35 miles southeast of Memphis, Tenn. Duncan says about 90 percent of the students use some sort of financial aid, including student loans. Founded in 1866, the liberal-arts college is the oldest of the 11 Historically Black Colleges and Universities related to the United Methodist Church and is one of only five remaining HBCUs in the country founded before 1867.

Evaluating the problem
When the school’s 2004 cohort-default rate jumped to 23.5 percent, Duncan reviewed her files to determine the cause. She found that many of the students who were delinquent on their student loans were those who had not graduated or re-enrolled.

“One of our key indicators was that our freshmen students were not returning,” she says. “We didn’t have problems with the students who graduated from Rust College — it was the people who didn’t stay here.”

So she made a few changes to help students understand how much money they were borrowing.

Now current students who don’t register for the upcoming semester receive an exit-interview packet in the mail, and all students — not just seniors — receive yearly reports about their student-loan indebtedness. The reports show students their loan history and recommended income to pay off their loans.

Rust College’s 2005 draft cohort-default rate is 18 percent. Duncan says she’s thrilled with the decline and would like to see the school’s cohort-default rate keep going down — to under 15 percent. The school’s lowest rate ever was its 2002 cohort-default rate of 14.9 percent.

“The most important thing,” she says, “is keeping students well-informed.”