Checklist Assists in Default-Prevention Efforts
Submitted by: Linda Athearn, USA Funds Services, (866) 497-8723, Ext. 8014

Contact with students throughout their college experience plays a critical role in proactively preventing defaults. The financial-aid office is an important part of this process. By making frequent contact with students and involving other campus offices and resources, aid administrators can make a difference. Students who leave college with a better understanding of their responsibilities and options are less likely to default than those who do not have this exposure.

USA Funds®’ online Best Practices in Debt Management Manual offers the following checklist to help financial-aid administrators assess their in-school-period default-prevention efforts:

___We have established a procedure to get debt-management information to students early in their college experience.

___Entrance- and exit-counseling procedures have been expanded beyond the minimum regulatory requirements.

___We have established a diverse communication process using various types of communication tools.

___We have developed or acquired the necessary communication tools.

___We frequently communicate with our students regarding debt-management issues.

___We target our debt-management messages to the specific needs of our students, with special attention to high-risk groups.

___We offer workshops and/or classes to educate students about budgeting, borrowing and other financial-management topics.

___We review our financial-aid-packaging policy to minimize student borrowing as much as possible.

___Our private-loan policies minimize student borrowing.

___We evaluate on-campus credit-card use and solicitation to discourage student application and use.

___We have developed procedures and programs to help borrowers stay in school.

___We review average student indebtedness by program to ensure that the starting salaries students can expect to receive following graduation are sufficient to permit our graduates to manage these average levels of education debt.

___We examine our program offerings to ensure that there is a demand for our graduates in the job market.

___We evaluate our job-placement services and potential enhancements to assist our graduates in gaining employment.

More suggestions and tools for helping students manage debt throughout the life cycle of their loans is available in the newly updated Best Practices in Debt Management Manual. To access the manual, go to www.usafunds.org/debt_management/best_practices_manual.htm on the USA Funds Web site.