Monitor Your School’s Default Rate With USA Funds Debt Manager

Schools that use USA Funds Debt Manager^® can easily monitor their projected cohort-default rates. Although USA Funds Debt Manager does not project official cohort-default rates, its reports permit campus staff to estimate a range of potential default rates based on the data available to USA Funds Debt Manager.

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.

Enhancements to USA Funds Debt Manager now permit users to create a Delinquency Aging Report, using the following steps:

1. Select Strategies.
2. Select Report Strategies.
3. Select Create Report Strategy.
4. Select Report Strategy Type as Delinquency Aging. See screen print below of various report options, including:
   • Report Audience. Identifies the loan type that will be included in the report.
   • Frequency. Either a predetermined time frame or On Demand. On Demand will allow the user to execute the report at any time and receive the output just after the top of the hour.
   • Additional Data Rules for Report Type. Users enter the repayment year. If a user enters 2005, the report will include borrowers who entered repayment between Oct. 1, 2004, and Sept. 30, 2005, and will highlight those who defaulted or could default between Oct. 1, 2004, and Sept. 30, 2006.
5. Select Save. Users receive a message at the bottom of the screen indicating that the report was created successfully. Note: The report will run at the frequency that the user set. If the user selected On Demand, the user must manually execute the report through the On Demand screens.

Once created, the report will provide a count of the number of borrowers within the given cohort year, sorted by the number of days that their accounts are past due. The report also provides a Default Risk Threshold. This figure represents the number of days that a borrower’s account must be past due in order for that borrower to have the potential to default within the given cohort period. Using this Default Risk Threshold, the report also projects best- and worst-case scenarios for the school’s default rate. The Best Case Scenario projects the cohort-default rate assuming that no additional borrowers for that school will default before the end of the cohort period. The Worst Case Scenario assumes that all borrowers with the potential to default within the cohort period will, in fact, default.

Using the Delinquency Aging Report and the other reports available in USA Funds Debt Manager, financial-aid professionals can develop communication strategies to optimize their default-prevention success.

For additional information about USA Funds Debt Manager, contact your USA Funds debt-management consultant.