2/9/2014

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Tampa Bay

Student Loan Consortium

Michael J. Bennett

Wayne Kruger

Dameion Lovett

Agenda

• Discuss the “Student Loan Bubble” and the

current loan landscape

• What is the Tampa Bay Student Loan

Consortium?

• What some of the TBSLC members are doing

and why – St. Petersburg College

– University of South Florida

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$1 TRILLION in student loan debt!

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2010 3 YR CDR on a national level • Three year rate rose from 13.4 to 14.7%

o Public: 13.0%

o Private not-for-profit: 8.2%

o For-profit: 21.8%

o Community College: 20.9%

• Two year average rate rose from 9.1 to 10% o Public: 9.6%

o Private not-for-profit: 5.2%

o For-profit: 13.6%

o Community College: 15%

• For this cohort, approximately 4.1 million borrowers attending 5,951 schools entered into repayment during this time and 600,545 borrowers defaulted

• Much of this continues to support the concept that we have a “repayment crisis” (as opposed to a debt crisis) when it comes to student loans

2010 3 YR CDR – National

Landscape

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Lack of funding for default aversion

initiatives on campuses

• USDE has earned $50 Billion in Loan Profit

this year!

• Will USDE invest some of the interest rate

profits in default prevention, default aversion or

a Loan Call Center?

• Financial Aid professionals are unable to adjust or deny student loans to groups of students

• As long as the school’s cost of attendance allows, schools are required to let students borrow up to their maximum and cannot put additional steps in place beyond the Master Promissory Note and Entrance Counseling

• To keep debt down and to be able to follow the guidance within Gainful Employment, FA administrators need the ability to be proactive with how much a student borrows, not “chasing after the horse when it is out of the barn”

Little help and power for schools

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Over the past three years SPC has done an extensive review of student loan debt, delinquency, and default. Our findings seem to match with national data for community colleges, but paint a very different picture than the news media

• We don’t have a loan debt problem - we have an academic advising and completion problem

• The “amount of student loan debt” is not the number one indicator of potential student default

• Community College “Access” must include an expectation of student success?

College Experience

New Student

Orientation

My Learning

Plan

Early Alert System

Career Advising

Learning Support

Financial

Literacy

and

Default

Prevention

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NOTE: Exit Counseling does not include “Manage Your Spending While in School.”

Available on studentloans.gov

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Financial Literacy – Counseling 2

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Examples of activities servicers are doing:

Servicer Role – Default Prevention 6

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In-School/ Grace

Campaigns about repayment

Communications about auto debit

Engage borrowers

through social media

Repayment

Payment Reminders

Notification of Repayment Plan

Options

Targeted campaigns of

expiring deferment status

Early Stage Delinquency

Payment Reminders

Campaigns describing repayment

options

Engage borrowers

through social media

Reminders of impact of

delinquency

Late Stage Delinquency

Targeted mail strategies

Account placement with

specialist

Unique outbound messaging

Skip trace review

Critical Stage

Targeted mail strategies

Account placement with

specialist

Unique outbound messaging

Lack of financial resources for most schools means having to be creative in solutions

• Free and/or low cost options don’t often show significant results but are often our only option

• Changes to the industry have left few choices for schools

• Few schools have their own default aversion programs

Most school administrators, specifically senior level management, have yet to see this as a real institutional problem

• Until default rate hits the 30% mark there are no school sanctions

• Since students who go into default are no longer students at your institution, it’s hard to get assistance for them

What schools are doing

Default Prevention Choices

• Create a Default Prevention Center with a

defined area and staffing

• Outsource Default Prevention with business

partners

• Embrace a “Hybrid Model” using the

appropriate mix of campus and business

partner resources

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Business Partners

Ceannate Corporation Nelnet

Champion College Services, Inc. North Star

ECMC Solution Services SALT (ASA)

EdFinancial Services TG

Inceptia Organization (NSLP) USA Funds

McKenzie Financial, Inc. WISS (Wright International Student

Services)

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Pilot of the Tampa Bay Student Loan Consortium • On November 19, 2012, an invitation was sent to a group of

institutions in the Tampa Bay area to share strategies, best practices, training, forms & resources in the areas of debt management, financial literacy and default prevention

• Group discussions allow a collective exploration of solutions to common problems. We become more informed about others who provide services that assist staff and students, especially as we are often working with the same students

• It also facilitates networking opportunities for staff who perform similar duties. Meeting locations rotate to member institutions, with the host institution being the main presenter, followed by other presenters on pertinent topics

Florida Initiative

• Clearwater Christian College

• Eckerd College

• Everest University

• Florida College

• Hillsborough CC

• Keiser University

• National Aviation Academy

• Pasco-Hernando CC

• Saint Leo University

• State College of Florida

• Stetson Law

• St. Petersburg College

• University of Phoenix

• University of South Florida

• University of South Florida – St. Pete

• University of Tampa

Tampa Bay Student Loan Consortium

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• Initial meeting – expectations of consortium, roundtable discussion of current practices and ideas in areas of excessive borrowing, debt management, financial literacy, and engaging other campus offices

• 2nd meeting – in-depth look at the upcoming USF “Bull 2 Bull” Ambassador program

• 3rd meeting – CDR, Default Management, Clearinghouse, and enrollment concerns

• 4th meeting – outbound calls, Shopping Sheet, and tour of USF “Bull 2 Bull” facility

• 5th meeting – Tour of National Aviation Academy default management area, review of their year one results

• 6th meeting – University of Tampa successes, training of support staff discussion, FSA Sessions, It’s My Future!

Tampa Bay Student Loan Consortium

Default Management Plan • It’s MY future!

• Communication

• In-school Activities

– Early, mid and late stage enrollment

• Repayment Management

• Default Risk Reduction

• Default Management Task Force

Federal Loan Servicers

Federal Loan Servicers Borrower Contact #

Aspire Resources Inc. 1-855-475-3335

CornerStone 1-800-663-1662

ESA/Edfinancial 1-855-337-6884

FedLoan Servicing (PHEAA) 1-800-699-2908

Granite State – GSMR 1-888-556-0022

Great Lakes Educational Loan Services, Inc. 1-800-236-4300

MOHELA 1-888-866-4352

Nelnet 1-888-486-4722

OSLA Servicing 1-866-264-9762

Sallie Mae 1-800-722-1300

VSAC Federal Loans 1-888-932-5626

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• Default Prevention is Everybody's Business! Default prevention is a school-wide effort and not the sole

responsibility of the financial aid office!

• You NEED DATA! In order to conduct risk analysis and identify your defaulters

you need data (otherwise “perception” is reality)

• Partner with Business Partners! Your default prevention plan should incorporate the

products and services offered by USDE and business partners

• Founded in 1927 as a Community

College

• Became state’s first College in 2002

offering both 2 and 4 year degrees

• 70% Independent Student Population

with an average age of 28

• 2012 Student Head Count of 45,914

with about 70% of the population being

part-time students

• 54% of students in 2012 received some

sort of financial assistance totaling 170

million dollars. 72% of students

receiving financial assistance received

the Pell Grant.

• 53 FAS staff, 9 campus locations

• Largest provider of Online Education in

Florida. 25% in all online programs

• Over the past 5 years, we

have seen a doubling of

student loan borrowing

• Yearly Loan Averages – Lower Division - $7,841

– Upper Division - $9,442

• Loans Disbursed – Over $102 Million disbursed!

– Almost 15,000 borrowers

Student Loan Debt @ SPC

$0

$50,000,000

$100,000,000

$150,000,000

FY09

FY11

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

FY 09 FY 10 FY 11 FY 12

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SPC Cohort Default Rate

0

5

10

15

20

25

2006 2007 2008 2009 2010 2011

2 YR CDR

3 YR CDR

17.5%

20.9%

• SPC’s FY 2010 3 year Cohort Default rate is

20.9%. There were 680 defaulters out of

3,252 students entering repayment

• The total loan amount defaulted is $7,761,968

with an average amount of $11,415 per

borrower

• 9th highest 3 year default rate among

Florida’s 28 community colleges and 4th

highest in the number of defaults

3 Year Cohort Default Rate

Students attended on average between three and six terms with a

number of unsuccessful grades (W & F)

CDR Analysis - Grades

Source:

ProEducation Solutions,

St. Petersburg College

Cohort Default Rate (CDR)

Review, Oct 2012

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• A number of students who go into delinquency status on

their loans return to SPC and enroll at least half-time

– These students are not requesting an in-school

deferment or forbearance

• There were a lot of students who consolidated after

defaulting and if contacted, may have consolidated

before being included in the CDR

– Some students paid the consolidated loan in full

CDR Analysis – Delinquency & Consolidation

Source:

ProEducation Solutions,

St. Petersburg College

Cohort Default Rate (CDR) Review, Oct 2012

Food For Thought: Typical Findings

• Never Contacted

• Developmental Courses

• Late Admits

• Did Not Graduate

• Gradated but No License

• Late Majors

• Exit Counseling

• Level of Indebtedness

• Poor Study Habits

• Academic Preparedness

• Grad with Minimum GPA

• Feel unwelcome, no “campus connection”

• No Jobs in Profession

• College Majors

• Attendance Factors

• Student Employment

• Transportation

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Do the leg-work, let your data lead the way.

Examples of ‘Who’ and ‘Why’

More Food For Thought

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5 Examples of ‘Who’ and ‘Why’

Historically, the majority of borrowers who default, withdrew without completing their academic program.

• Did not achieve academic credential

• AA Programs

• Often have reduced earning power

• May not benefit from job placement

• Have one or more loans to repay

• May not receive exit counseling

• May not respond to communication attempts by their loan servicer

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• Develop St. Petersburg College’s It’s My Future! Debt Management/Default Prevention Plan

• Create “Movers & Shakers”, an internal SPC team dedicated to default management

• Hire a Default Prevention Manager

• Entrance/Exit counseling & Financial literacy

• Identify Business Partners for Default Prevention and curing Delinquent Accounts

• Hire 15 FAS Student Advisers (FWS funds)

• Active participation in Tampa Bay Student Loan Consortium

Default Prevention Manager

• 6800+ students have activated their accounts!

• 50+ SLS sections have it embedded in the curriculum

• 7,130 unique people saw a Facebook post about SALT tables

during Welcome Back week

• Oct 2012 – featured in SALT blog – SPC is On the Money!

SPC SALT Success so far…

University of South Florida: a Snapshot • USF Tampa: 41,000+ students

– 28,000+ enrolled full-time

– 12,000+ enrolled part-time

• USF St. Petersburg: 4,600+ students – 3,100+ enrolled full-time

– 1,400+ enrolled part-time

• USF Sarasota-Manatee: 1,900+ students – 800+ enrolled full-time

– 1,100+ enrolled part-time

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2011-2012 USF System Estimated Financial Aid

• Federal Work Study $ 2,843,235

• Tuition Waivers $38,444,776

• Scholarships $60,113,813

• Grants $95,332,044

• Loans $259,570,549

• Total $456,304,417

Student Loan Indebtedness at USF • $22,557 average for 1112 graduating cohort

– Monitor average loan debt by UG grade level

– Use to determine future intervention measures

• $17,546 average for 0506 graduating cohort

• Factors contributing to increase in borrowing: – Tuition increases

– Tuition differential fee (additional fee charged by SUS)

– Reduction in Bright Futures (state funded scholarship) funds

– Time to graduation

• 3 year CDR=10%

• One associate director

• One assistant director

• One team manager

• One admin specialist

• One graduate assistant

• Five undergraduate peer educators

• Began operation April 2013 & full service August 2013

University Scholarships & Financial Aid Services

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“Bull 2 Bull”

Peer based program • Experiential learning for peer educators

• Provides financial education to undergraduate students who are in or may be in stressful financial situations

• Outreach Based • Workshops

• Seminars

• Client Based • One on One sessions

• Online learning

Financial Education Program

We do not provide:

• Investment consultation

• Legal advice

• Referrals to financial institutions

• Tax advice

• Freshmen Orientation sessions • Interactive sessions with students

– 3 sessions per orientation

– 25 minute session

– Reach: more than 4,000 students

• Transfer Orientation Sessions – One session per orientation

– 20 minutes

– Reach: 8,000 students

• One-on-One Counseling Sessions – Budgeting

– Credit Counseling

What Are We Doing?

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What Are We Doing?

• Required online course for all new

freshmen – Budgeting

– Credit & credit card use

– Financial aid basics

• 98% completion rate

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• Group Seminars

• “Don’t Be Gulli-Bull, Save Your

Refund”—Budgeting Seminar

• “It’s Tackle-A-Bull”—Managing

Credit Seminar

• Collaborative Programs

– University Experience courses

– Wellness USF

– Housing

– Honors College

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What Are We Doing?

• Loan repayment exit

counseling sessions for

graduating seniors

• Offered as a group session or

one-on-one

• Grace period outreach

• Satisfactory Academic

Progress Financial Counseling

• High borrowing pattern

• Not on pace to graduate

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What Are We Doing?

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How Did We Get Them There?

• Marketing and Advertising

– 222 Twitter followers

– 120 Facebook fans

• Bull Market

– On campus flea market

– Every Wednesday during

the term

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Did I Mention Money?!

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Students are entered in a drawing for a $500 scholarship if they attend our

events. Graduating seniors who attend our exit seminar are entered in a

drawing to win $500 repayment of their student loan debt.

Where Do We Go From Here?

• Data, data, data

• Evaluate progress so far

• Expand program services

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Next Steps

• Approval to expand pilot to the Orlando and

Miami metro areas over the next year

• Will be presented at the state, regional, and

national Financial Aid Administrators

conferences over the next year to

showcase this initiative

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Questions?

Michael J. Bennett

Associate Vice-President

St. Petersburg College

bennett.michael@spcollege.edu – (727) 341-3012

Wayne Kruger

Director of Financial Aid Operations

St. Petersburg College kruger.wayne@spcollege.edu – (727) 302-6801

Dameion Lovett

Associate Director, Financial Education & Outreach

University of South Florida

dlovett@usf.edu – (813) 974-5462