Connect with Students to Reduce Cohort Default Rates

1. Connect with Students to Reduce Cohort Default Rates February 14, 2014

2. Agenda • Best Practices that Reduced the Cohort Default Rate. – How did we do it? • Provide Financial Education - Importance of Being Proactive. • USA Funds Tools that have Successfully Reduce Cohort Default Rate. • USA Funds Life Skills; • USA Funds Borrower Connect; and • USA Funds Borrower Connect InTouch.

3. Successfully Reduce the CDR – How did we do it? • Educate all campus administrators and faculty on the issues and establish a task force. • Identify the factors causing the institution’s cohort default rate to exceed the threshold. Who is “at risk” on your campus? • Develop and implement a campus wide default prevention strategy that includes working with students while they are on campus and after they leave your institution. • Establish measurable objectives and identify specific actions the institution will take to reduce the default rate and improve college completion.

4. Stage 1: Application and first 90 days Communication with students after they leave the institution. Counseling and orientations The Life Cycle of a Student Stage 2: In-School Period Stage 4: Alumni Graduate and Career Counseling Financial literacy, student success andretention efforts. Stage 3: Last year and Graduation

5. What is USA Funds Life Skills? • USA Funds Life Skills teaches students to manage their finances and time wisely during school and after graduation. • The program: • Provides measurable and successful financial literacy training. • Teaches students to avoid debt problems. • Reinforces the importance of repaying student loans. • Helps students stay enrolled through graduation. • Available at no cost to your institution. 9

6. Features and Benefits • Gives students money and time management advice and the tools they need to graduate on time, minimize their debt and take responsibility of their student loans. • Encourages better understanding of financial skills and promotes better repayment, which ultimately lowers cohort default rates. • Customizable curriculum: • Provides flexible delivery to fit existing processes. • You decide which courses you want student groups to take. • Courses can be assigned to specific student segments. • You decide which students or groups of students you want to target. • Students can complete courses on their own, in a classroom setting or using a combination of both.

7. USA Funds Life Skills • Topics are presented as part of a curriculum of more than 30 online courses, including: • Financial aid and paying for college. • Applying for financial aid. • Managing student loans while in school. • Repaying student loans. • School and personal life management. • Setting and achieving goals. • Managing time while in school. • Living on a budget. • Credit and money management. • Managing credit cards and debt. • Understanding credit reports and credit scores. • Setting savings goals.

8. USA Funds Life Skills • Graduating students. • Establishing career goals. • Estimating expected income and take-home pay. • Preparing for an interview. • Graduate students and adult learners. • Paying for a graduate degree. • Managing debt and controlling spending while in school. • Budgeting while pursuing a graduate degree. • Couples in school. • Having a life with little money. • Coping with school and a relationship. • Managing money while in school.

9. Best Practices • Link financial education to other on-campus events, programs and student organizations. • Make it part of the process of being a student (academics). • Don’t be afraid to make it mandatory. • “They don’t know that they don’t know!” • “They think they already know!” • Start small and build from there.

10. USA Funds Borrower ConnectTM • Web-based tool that helps schools connect with borrowers to improve cohort default rates and promote successful student loan repayment. • Automates borrower communication through telephone, letter and email campaigns. • Aggregates data schools upload from loan servicers, National Student Loan Data System and other sources. • Creates communication campaigns that can be targeted to address borrowers in various stages of repayment. • Communications encourage borrowers to remain current on loan payments or seek assistance from lenders or servicers to restore loans to good standing. • Stock letters and email templates are provided, and can be personalized with school-specific information and logos.

11. USA Funds Borrower Connect InTouchSM • Staffing solution that provides the benefits of borrower counseling – without the work. • Dedicated, focused resource for individually counseling borrowers about their options for repaying their loans. • Communication efforts: • Remind borrowers of their loan obligations and responsibilities. • Discuss available options and help establish an achievable and affordable repayment plan. • Ensure borrower contact information is up to date. • Promote long-term repayment success.

12. USA Funds Borrower Connect InTouch • Communication campaigns at different stages: • During borrower’s grace periods. • At various stages of delinquency. • Contact campaign activities include: • Both phone and email contact. • Multiple attempts to contact borrowers by phone. • Three-way calls with borrower and servicer. • Access to real-time monitoring through USA Funds Borrower Connect. • All completed and ongoing campaign activities. • Reported success measures include: • Number of borrowers contacted. • Number of successful counseling sessions. • Number of grace period borrowers who make payments within first 30 days of entering repayment.