The Missouri Department of  Higher Education promotes default prevention and debt management initiatives related to student loan borrowing and repayment. Objectives       include increasing the awareness of financing options for postsecondary education, reducing debt among postsecondary students and parents, increasing enrollment retention, reducing loan defaults, and generally increasing students’ knowledge about     their personal finances.

Implementing default prevention and student success programs on campus are:

  • Smart for schools! Successfully educating student loan   borrowers can help reduce your institution’s default rate and prevent potential   sanctions against your institution, such as losing federal program eligibility   for student loans,  Pell Grants, and other Title IV aid programs.
  • Smart for borrowers! Default prevention activities also   improve the student loan borrowers’ knowledge of their rights and responsibilities. Extending   default prevention to implementing financial   literacy and debt management programs on   your campus also contributes to the overall financial health of Missouri’s   students, parents, borrowers, and citizens.

Top Ten Best Practices in Default Prevention

Brought to you by the MDHE’s Default Prevention Grant program team.

    1. Organize a Default Prevention and/or Student Success Team. Help the team   start strong by requesting default prevention training from the MDHE and reviewing a new printed publication, The Smart Approach to Campuswide   Retention and Default Prevention Efforts. This pamphlet was created   for Missouri’s postsecondary staff and administrators to assist with developing and promoting more cohesive retention, student success and default prevention plans. Additionally, Missouri institutions may  attend the MDHE’s free Default Prevention Day offered in May.
    2. Profile your institution’s defaulted borrowers, and put programs in place to   specifically address at-risk populations at your school.
    3. Make retention part of default prevention efforts. Focus on academics as well   as providing personal or financial counseling for at-risk students.
    4. Emphasize the benefits of paying interest on   loans while still in school. Use the MDHE’s free publication Planning for Financial Success to get freshmen   borrowers off to a good financial start. To order MDHE publications, visit our online   order form.
    5. Develop a “loan reminder” presentation/counseling session for returning loan   borrowers each year. Results of a 2009 MDHE survey of delinquent and defaulted   borrowers indicated that more than 50% of borrowers borrowed more than they   expected. Help future borrowers avoid this mistake!
    6. Conduct budget and financial management workshops in classes or include it in the new student orientation process.   Seek and use outside resources, such as the MDHE, to help make these workshops   as interactive and memorable as possible. Complete our new online   speaking and event request form to arrange for a financial literacy workshop   for your students.
    7. Provide a personalized calendar during exit   counseling (mark dates such as the half-way point of the 6-month grace   period, end of grace period, and first repayment due date). Include   comprehensive student loan debt information (total amount owed, estimated   monthly payment amounts, etc.) as well as loan holder contact   information.
    8. Provide lifetime job placement assistance.
    9. Include financial aid and retention staff in student withdrawal process.
    10.   Use creative techniques to contact students and borrowers.