Turn to USA Funds’ Online ‘Best Practices’ Manual for Default-Management-Plan Help

A comprehensive default-management plan is helpful in keeping default rates low. Such a plan also assists students in making more-informed decisions about higher education by preparing them academically, socially and financially for the college process. And students who leave college with a better understanding of their responsibilities and options are less likely to default.

USA Funds^® offers tools to help schools in their debt-management efforts, including the development of default-prevention plans.

Among the wide array of debt-management resources available from USA Funds is its online Best Practices in Debt Management Manual, which offers the following tips for developing a default-management plan.

Schools should keep in mind the following key components of a successful default-management plan:

• Institutional commitment and clear definition of roles and responsibilities.
• Established procedures for distributing debt-management information to students early in their college experience.
• Frequent contact before, throughout and after college to promote continual information-sharing.
• Regular assessment and evaluation to measure the consistency and effectiveness of your initiatives from term-to-term and year-to-year.

Once the commitment to develop a default-management plan has been made, an individual or team of individuals should be charged with the final responsibility of directing the default-management project. This individual or team engages school executives and enlists the support of representatives from other campus offices that represent a cross section of the school to discuss, analyze and implement the plan.

Focus on early awareness
Efforts for distributing debt-management information should include programs aimed at pre-college-age students and their families. A partnership with an early intervention program can help get the word out, particularly to the neediest students and families who may need to receive additional information. Middle- and high-school career and college fairs also are helpful in passing along important debt-management information.

Continued information sharing and education during school is crucial. Promoting financial-literacy concepts and other debt-management communications through newsletters, e-mail campaigns and workshops offers multiple opportunities for interaction and education. Representatives from other campus offices — such as career services, residence life, and counseling — and professionals not directly associated with the school — such as financial planners, members of a credit bureau, and consumer credit-counseling representatives — also can offer valuable information.

Update and evaluate
Regularly evaluate the plan to ensure its effectiveness. It may be helpful to assess plans used by other schools, review useful Web sites, and attend default-prevention conferences and workshops. Program materials also may need to be updated to take into account both school and student needs. Financial-aid packaging should encourage conservative borrowing and promote scholarships, other gift aid, and Federal Work-Study in lieu of loans.

Your USA Funds debt-management consultant also can help you develop a customized default-management plan for your school.