Default Prevention Best Practices
Lender Services to Schools
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• Entrance Counseling Support
• Customer Service
• Borrower Communication to Support Schools
• Exceeding Minimal Due Diligence Requirements
• Institution-Specific Loan Statistics
• Exit Counseling Support
• Demonstrated Security of Borrower Information
The information provided in these pages doesn't represent an exhaustive list of requirements. It's designed to enhance communication with students and maximize the effectiveness of default prevention efforts. Complete lists of required and suggested counseling elements can be found in our Entrance Counseling Checklist (PDF) and Exit Counseling Checklist (PDF).
Entrance Counseling Support
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Customer Service
Busy financial aid professionals appreciate quick and easy channels for interaction with lender and guarantor partners, which allow financial aid staff to spend more time assisting students.
- Offer online access to a borrower's current and cumulative debt, as well as estimated repayment information
- Provide a toll-free number for handling inquiries and adequate staffing to minimize time on hold
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Borrower Communication to Support Schools
When and what we say to borrowers can impact their repayment success. Well-informed borrowers know that there are a variety of ways to avoid default, and more importantly, that we're all here to help them.
- Train employees in financial literacy and default management principles
- Ensure employees understand loan management and default prevention elements
- Use a variety of communication methods
- Standard mail and phone calls
- Multimedia materials (e.g. PowerPoint presentations, videos, flash animation, TV spots) designed to educate borrowers
- Creative techniques to grab borrowers' attention (e.g. e-mails, podcasts and e-cards)
- Target the message to students' specific needs for deferment and forbearance
- Partner with Oklahoma Money Matters (OKMM), OGSLP's financial literacy initiative, to help financial aid offices offer personal finance workshops during freshman orientation, student organization meetings or classes
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Exceeding Minimal Due Diligence Requirements
At OGSLP, going the extra mile to prevent defaults is a priority. Oklahoma's recent declining default rates have demonstrated that the extra efforts of schools, lenders and OGSLP are paying off. Consider ways you can enhance your borrower servicing program. How can we help?
- Target high risk borrowers
- Work with OGSLP's Early Assistance Department
- Provides help and support months prior to a possible delinquency
- Contacts borrowers within 30 days of first payment
- Clarifies the loan repayment process and identifies the borrower's servicers
- Explains graduated repayment, income-sensitive repayment, deferment and forbearance options
- Prioritizes call campaigns to focus on borrowers who may be at higher risk for delinquency, such as freshmen and students who withdraw from school prior to the completion of their program of study
- Develop late-stage delinquency campaigns
- Specialized and dedicated call, letter and flyer campaigns can reach borrowers for whom a loan claim has been filed
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Institution-Specific Loan Statistics
Providing schools with institution-specific data empowers them to tailor their programs to target audiences that may need more attention.
- Default rates
- Assist schools by providing required average loan indebtedness statistics for borrower counseling
- Samples of monthly repayment amounts based on:
- A range of student indebtedness levels for
- Borrowers of subsidized or unsubsidized Stafford loans
- Graduate borrowers of unsubsidized Stafford or Grad PLUS loans
-- OR --
- The average indebtedness of Stafford loan borrowers at the same school or in the same program of study at the same school
- Average anticipated monthly repayment amount based on the combination of different loan types if the borrower has a combination of Stafford and Graduate PLUS loans
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Exit Counseling Support
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Demonstrated Security of Borrower Information
- Avoid use of a borrower's Social Security number in correspondence and other open forums
- Ensure Web site encryption to protect borrower data
- Offer your privacy policy for review
- Offer your data exchange security policies for review
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Contact OGSLP's Early Assistance/Default Prevention team at 405.234.4328 or 800.833.4973
(toll-free) or OKMM team at 405.234.4457 or 800.970.6566 (toll-free) to learn about all available default prevention and financial literacy tools. We're here to help!
