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Explore data findings and interpretation regarding student loan topics and money management, including solutions and resources for effective borrower counseling and assistance.
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Best Practices in Supporting Student and Parent Borrowers Betsy Mayotte, The Institute of Student Loan Advisors Cathy Mueller, Mapping Your Future Steve Queisser, Student Connections
Methodology and Data • Data Collection • Include all three hashtags: • #college • #money • #studentloans • Be relevant to the hashtags • Was not a repeat of the same tweet (actual retweets were included)
Findings and Interpretation • Profile of Tweeters • Companies • Organizations • Financial Professionals • Financial Bloggers • Engagement • Obvious engagement low • Account analytics may reveal more engagement but not available for research • High engagement indicates interest and agreement or disagreement
Findings and Interpretation • Topics • Student loan savings, refinancing, repayment • Money management • Value of higher education • Money for college • Other
Findings • Many companies and bloggers are addressing the issue of student loan debt and money management issues and offering solutions. • The value of higher education is being questioned. Students with money management skills won’t take on too much student loan debt and won’t question the value of higher education.
Supporting Student and Parent Borrowers By: Betsy Mayotte The Institute of Student Loan Advisors www.freestudentloanadvice.org betsy@freestudentloanadvice.org ™
Facts About Student Loan Counseling. • 40% of students don’t recall ever having received exist counseling • 1/3 had no idea what their interest rate or loan term was • 40% of borrowers go to social media for student loan advice • The six month grace period degrades the effectiveness of exit counseling • Borrowers who entered repayment in 2011-12, 9% of those who completed their programs and 24% of those who did not defaulted on their student loans within two years. • Better, more targeted student loan counseling is effective in improving financial outcomes: https://www.americanactionforum.org/research/student-loan-counseling-federal-mandate-give-borrowers-necessary-financial-skills/
Borrower Satisfaction Survey What were you contacting your loan servicer about?
Borrower Satisfaction Survey Have you ever sought student loan help or advice from an entity other than your loan holder?
Let’s Talk About Parent PLUS Loans • Budget estimates show almost 1 million new Parent PLUS borrowers in the next year • Lifetime default rates anticipated to be 9.60%
Solutions • The goal should be ensuring they know where to find the information they need, when they need it • Case study based counseling • Age appropriate outreach and resources • Put the information where they are looking for it
Solutions • The new goal should be to ensure they know where to find the information – not make them remember the information. • Make entrance counseling part of the FAFSA • Include average monthly payment amounts as well as average loan balances • Include parents in the counseling • Get rid of the MPN • Move exit counseling to right before the start of repayment, use an interest rate discount as an incentive that can be applied at any time • ChangeED/Chipper • AI Bots • Understand that they don’t know what they don’t know • Information tag push rather than pull • They aren’t going to come to your site every day • Create partnerships with 3rd party student loan assistance programs and Employee Assistance Programs (EAP).
Resources and Data • Experiential learning – use case study questions rather than true false. https://www.npr.org/sections/ed/2016/04/13/473561841/not-all-financial-education-is-effective-here-are-4-ideas-that-work • Impact of mandated personal finance courses http://www.hbs.edu/faculty/Publication%20Files/13-064_c7b52fa0-1242-4420-b9b6-73d32c639826.pdf • Federal student loan counseling best practices https://www.insidearm.com/news/00041323-study-highlights-federal-student-loan-cou/ • Student loan repayment assistance programs https://files.consumerfinance.gov/f/documents/cfpb_innovation-highlights_emerging-student-loan-repayment-assistance-programs.pdf • TISLA borrower satisfaction full survey available on request
Stephen A. Queisser Vice President of Strategic Partnerships Best Practices in Supporting Student & Parent Borrowers Impact of Delinquency and Default
Who I am: Steve Queisser Vice President of Student Connections Formerly USA Funds Over 15 Years in Higher Education including FFELP Loan Origination & Servicing Over 10 years at Edamerica / Edfinancial as VP of Midwest Region Almost 2 years at National Sales Manager and VP of Strategic Partnerships Philosophy: "It is not as important as to where we stand, but instead the direction that we are moving. Sometimes we sail with the wind; sometimes against the wind...But we must always sail and never Drift nor lye anchor." Oliver Wendell Holmes, Chief Justice of the United States Supreme Court.
University Business Magazine * UB Provides Cutting Edge coverage of News * Academics * Facilities Management * Security Over 86,000 Subscribers * Financial Services * Policy * Profiles * Opinions Leading Publication for Higher Education Professionals
To GAin a level of concern and awareness about loan repayment challenges for students and their schools Focus Points of Research Image of the School / Institution Repayment Regulatory Actions Student Success Services Institutions are using to conduct outreach to delinquent borrowers
Demographics of survey Title/Department: * 15% President / VP * 6% Provost / VP * 10% Financial Aid * 7% Business Officer * 18% Dean / Faculty * Executive Leadership * 35% Other 438 Participants Size of Institution * 55% Under 5,000 Students * 20% 5,000-10,000 Students * 8% 10,000-15,000 Students * 17% Over 15,000 Students Type of Institution * 42% Private 4-Year * 34% Public 4-Year * 21% Public 2-Year * 3% Private 2-Year
Q1- what do you think delinquency and/or default on student loans has on the image of your institution? 73% Over All Believe It Can Damage The Image of Your Institution - 16% Believe the Impact is SUBSTANTIAL - 30% Believe the Impact is MODERATE - 27% Believe the Impact is SLIGHTLY Damaging - 27% Believe NO Impact
Impact of a strong default management plan & financial literacy program Retention Fixes Everything - CDR & Delinquency have NOTHING to do with Financial Aid. Admissions and Academics have a greater impact. - Default Management Task Force is only effective if the President is engaged. - Financial Literacy empowers students with life skills necessary to overcome non- academic barriers the prevent retention and graduation. * LifeSkills was the #1 used financial literacy platform in the nation * Over 1,000,000 lessons were completed representing over 300 Schools * 88% of students reported a positive behavioral change - WhichWay is new "Re-purposed" version of LifeSkills * Mobile App Version
What effect does delinquency/defaults have on the success of students who attended your school? 70% of all respondents believe it creates a "threat" to their success 31% Believe there is a "Substantial Threat" to student success 39% Believe there is a "Moderate Threat" to student success 17% Believe there is "No Negative Threat" to student success 13% Are "Unsure"
Retention & Completion 74.8% of All Defaulted Loans are Non-Completers Engage a 3rd party servicer to allow your Counselors and Advisors the freedom to counsel and advise. Grace Counseling!! Stop outs represent nearly 75% of all Defaults Because they "walk-away" they never participate in Exit Counseling Depending on LDA reporting they may not have been in class for several months Most providers only start outreach 10/1 of each cohort year. These students have been gone with -0- contact for as much as 1 year. A student receiving successful Grace Counseling is 2.5 x less likely to ever be delinquent vs. Students not receiving Grace Loan Counseling!!!!
Overall, How difficult is it for students who attended your school to repay their student loans? 87% of all respondents believe it is difficult for their students to repay their student loans. 20% Believe it is "Extremely Difficult" to repay their loans 67% Believe it is "Somewhat Difficult" to repay their loans 13% Believe it is "Not Difficult At All" to repay their loans The National Conversation centers on "Is College Worth the Cost?" Engage a 3rd Party Servicer to help students understand the many repayment options available in the Federal Student Loan Program.
Long Term Fixes Strada Education Network's Survey (Gallop) "From College to Life Strada / Gallop Survey * 350 people every day for 3 years surveyed. * Over 250,000 people have been surveyed to-date representing 3,000 schools. Relevance of coursework to their current careers are: * 18% More likely to be thriving * 63% more likely to Strongly Agree their education was worth the cost * 50% more likely to Strongly Agree they received a quality education * Relevance is a more powerful predictor of education than SAT/Math/Delinquency, etc * Job/Career outcomes more than double any other measure of satisfaction ***** Are we teaching to a job now?
Which of the following regulatory actions are most likely to occur within the next 2 years? Over 90% of the respondents selected a Financial Literacy option!!! - 36% - Debt Letters - 48% - Risk Share - 46% - Changes in Gainful Employment - 45% - Financial Literacy - State Required - 55% - Financial Literacy - Federally Required
Regulatory Actions Risk Sharing & financial literacy WhichWay Platform created to improve BOTH - 70% of all "stop-outs" are non-academic in nature Of this 70% population, 79% cite "financial barrier" as the reason for stop-out WhichWay offers lessons on budgeting, time-management, credit, etc.. To overcome these barriers There are 3 groups that participate in the Federal Student Loan Program - Federal Government - Originate the loan and service the loan - Student - receive the loan and pay back the loan. - Schools - Receive money! * 2 of the 3 have "skin in the game"….Congress wants all 3 to have risk. * Fines paid for CDR, Program Level Repayment, etc... If nearly 75% of all Defaulted Loans are a result of non-completion and 79% of these student cite finanical barrier as reason for stop out. There is dramatic reasons for the Federal and State Governments to make Financial Literacy education mandatory.
Which of the following factors are the greatest threat to student success and their ability to repay their loans? Over 70% Chose a "Non-Academic" Option 69% - Drop Out / Stop Out 67% - Over Borrowing 45% - Poor Money Management 41% - Lack of Financial Literacy 34% - Changing Majors These Responses showcase the need for Proactive AND Reactive approaches to Student Success Financial Literacy before there is an issue Grace Counseling to insure best LONG TERM Repayment Plan Outreach to Delinquent Borrowers to prevent default
College Access and Advising Mapping Your Future is working with the South Dakota Education Access Foundation (SDEAF) to expand access to postsecondary education. Mapping Your Future and SDEAF have similar missions to help students and families. A collaborative and participatory effort, Mapping Your Future seeks your input and ideas
Goals/Measurements Goals • Reach South Dakota high schools, students, and families • Increase knowledge - college planning & financial aid • Increase the FAFSA completion rate • Understand needs and assist high school counselors Desired program measurements include: • Numbers of participants • Increase in knowledge • Customer satisfaction 34
South Dakota Website Comprehensive website for students, parents, counselors, and other professionals at https://SouthDakota.MappingYourFuture.org
Marketing and Outreach • Working with other organizations/events • SDASFAA • DACAC • Community Foundation • Board of Regents • Surveys • Newsletters • Other communication technology
Printed materials • The Success Guide to Going to College poster • FAFSA/FSA ID bookmark • Texting bookmark • 2017-2018 Information and Resources for College-Bound Native American Students in South Dakota • 2017-2018 Estimated Costs for South Dakota Colleges and Technical Schools • Learn More, Earn More
Contact Catherine Mueller Mapping Your Future @cathylmueller cathy@mappingyourfuture.org 940-497-0741 (800) 374-4072feedback@mappingyourfuture.org MappingYourFuture.org SouthDakota.MappingYourFuture.org 39