Expanding the Value of Guarantor Services
As the U.S. Congress considers student loan reform legislation, the nation’s guarantors, including USA Funds®, are proposing to expand the services they deliver to assist borrowers in the William D. Ford Direct Loan Program. Examples of the services guarantors are proposing to provide, and descriptions of relevant USA Funds services, follow:
Financial Literacy for College Students
Basic personal finance skills — for example, budgeting, the wise use of credit, managing time and money, setting educational and career goals, establishing and following an academic plan, and finding employment — help college students minimize the debt they incur to pay college expenses and equip them to repay the student loans that helped finance their education. USA Funds Life Skills® is a comprehensive financial literacy curriculum that USA Funds has provided free of charge since 2002 to postsecondary institutions to serve their students. Originally a paper-based curriculum with nine modules for undergraduates, graduate and professional students and adult learners, the program now is offered online. Nationwide more than 500 postsecondary institutions have implemented the program. Last year, more than 310 schools nationwide received 163,000 copies of USA Funds Life Skills materials.
Loan Counseling
Federal regulations require that, before first-time student loan borrowers receive federal student loan funds, and again before students leave campus following graduation, they receive counseling on the terms and conditions of their loans and borrower rights and responsibilities.
To help postsecondary institutions more effectively deliver this counseling, USA Funds Loan Counselor® provides a free suite of online borrower counseling programs, including separate modules for entrance and exit counseling for undergraduates and graduate students. Using engaging graphics, life-story videos and a host of resources, these programs offer guidance to discourage excessive borrowing by students and to help departing students develop a plan for repaying their student loans. Included is an interim counseling program that permits colleges to provide refresher counseling to student loan borrowers between entrance and exit counseling. Although not required by federal regulations, USA Funds Loan Counselor also provides counseling on the terms of Federal PLUS loans for parent-borrowers. Last year more than 230,600 borrower counseling programs nationwide were conducted on USA Funds loan counseling programs.
Through USA Funds Connection® Web portal for financial aid professionals, USA Funds also offers schools free resources to conduct in-person group borrower counseling sessions.
In addition to formal borrower counseling, USA Funds provides an array of print and Web resources to address borrower issues in applying for student loans and managing those loans while in school, during the post-school grace period and in repayment, as well as special resources to help borrowers resolve student loan payment problems. Last year USA Funds distributed some 1.7 million copies of these consumer publications for borrowers nationwide, and its Web site received nearly 1 million visits, including 45,000 visits to USA Funds Loan SolutionsSM, a special online resource for borrowers with past-due loans or loans in default.
Debt Management Services
USA Funds employs experienced debt management consultants who work with colleges, universities and private career schools to assess and strengthen campus-based initiatives to prevent student loan defaults and to promote student retention and degree completion. Last year, USA Funds debt management consultants assisted 501 schools and conducted workshops for more than 1,500 participants.
In addition, USA Funds Debt Manager® equips schools with a free online tool that helps them communicate regularly by e-mail, mail or phone with their student-borrowers, while they are in school and following graduation. Ongoing communication is an effective method of promoting successful student loan repayment. This tool also allows schools to focus on borrowers who are at the highest risk of defaulting on their student loans. More than 860 schools use USA Funds Debt Manager.
Default Prevention
USA Funds supports a team of 250 full-time employees who contact and counsel federal student loan borrowers whose loan payments are 60 days or more past due. Last year these default prevention efforts successfully averted default on nearly 93 percent of these seriously past-due student loan accounts, helping to prevent $20.7 billion in loan defaults on more than 1.3 million federal student loans. USA Funds has adjusted its default aversion activities in light of the economic recession.
Training and Loan Policy Resources for Financial Aid Administrators
To promote school compliance with the regulations that govern the student loan program, and thereby protect taxpayer interests in the program, USA Funds supports a comprehensive array of free training services for financial aid professionals. USA Funds conducts twice-yearly financial aid workshops at more than 60 locations nationwide. These workshops provide updates on legislative and regulatory changes affecting the administration of federal student loans, as well as training on important student aid administration topics. Last year USA Funds conducted 126 workshops for nearly 3,600 participants. USA Funds supplements its in-person training with a comprehensive online financial aid administration curriculum as well as periodic webcast training sessions. USA Funds' online training courses recorded 14,500 learner sessions and served staff at 449 schools, and nearly 5,000 participants took part in 105 training webcasts provided by USA Funds.
USA Funds loan policy analysts also offer an e-mail resource to quickly address specific student loan policy questions they receive from campus financial aid staff. Last year USA Funds responded to 1,032 inquiries through this resource. Questions are researched, and answers are provided typically within one business day, although more complicated questions may take longer to research. USA Funds also provides a list of frequently asked loan policy questions and answers on its Web site for financial aid administrators.
Program Compliance Reviews
USA Funds’ compliance and investigations staff review the administration of the federal student loan program by individual schools, lenders, loan servicers and collection agencies to ensure compliance with federal program guidelines. Last year USA Funds staff conducted a total of 108 reviews.
In addition, USA Funds’ compliance and investigations staff process default rate appeals from schools, handle borrower requests for discharge of loan obligations due to false certification of loan requests and unpaid school refunds, research Social Security number discrepancies, and investigate allegations of student loan fraud or forgery.
These activities help to combat fraud, waste and abuse in the student loan program.
Ombudsman
USA Funds employs a dedicated ombudsman who works to resolve student loan borrower disputes with lenders, servicers, guarantors and the Department of Education. Last year USA Funds’ ombudsman worked to resolve more than 200 borrower complaints dealing with a wide range of issues, including disputes about loan balances, repayment plans, collection practices, and loan discharge and cancellation requests.