default management new challenges in changing times
TRANSCRIPT
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Default Management
New Challenges in Changing Times
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To Be Covered
What’s Happening
New CDR Formula
Where did the PUTS put my loans
What can be done
Current Tools
Best Strategies
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What’s Happening
Default rates are climbing across all sectors
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What's Happening
“Informational” 3 year rates are being published
For public institutions in New York State the 2008 cohort two and three year cumulative rates :
Two year rate: 5522 Defaults/90780 in repayment CDR=6%
Three year rate: 10033 Defaults/90618 in repayment CDR=11%
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What’s Happening
Students are struggling with multiple servicers
Colleges are finding that default management efforts need to be modified
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New CDR Formula
Old Calculation: Borrowers who entered repayment and defaulted during a two year periodBorrowers who entered repayment during the cohort year
For example: Two year 2010 CDR 10/1/09 – 9/30/1110/1/09 – 9/30/10
New Calculation:Borrowers who entered repayment and defaulted during a three year periodBorrowers who entered repayment during the cohort year
For example: Three year 2010 CDR 10/1/09 – 9/30/1210/1/09 – 9/30/10
It is important to remember that the date a student enters repayment is generally six months after they leave school. Students who leave school in April 2009 will impact your 2010 CDR that will be published in 2012 and 2013.
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New CDR Formula
Sanctions and benefits have changed as well
Raised the threshold percentage that triggers sanctions from 25% to 30%, effective in the 2012 FY
Single disbursement benefit threshold raised to 15 percent for three years
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Where Have My Loans Been PUT?
PUT Loan program was authorized in ECASLA in 2008
Allowed for the purchase of eligible FFEL loans by the Department
HESC had over 400,000 loan transferred under the PUT program
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Where Have My Loans Been PUT?
PUT loans create numerous problems for students and schools
Students may have several servicers because of PUT
Schools can no longer rely on GA for default management assistance on PUT loans
Also creates delinquency notification issues for schools
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What can be done
New avenues of information gathering need to be developed
Student borrowers need to be made MORE aware of DM efforts
Need buy in from leadership (defaults are an institutional issue)
What about retention???
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Current Tools
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Current Tools
NSLDS Date Entered Repayment Report
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Current Tools
Default Manager
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Strategies
Realize that Default Management is a “contact” sport
Get as much upfront contact information as possible
Concentrate on withdrawals
Use electronic communication whenever possible
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Strategies
Facebook page for former students with repayment questions
Palm Cards
Electronic copies of deferment / forbearance forms/IBR
Work with your Alumni Association
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Questions?