Rising default rates are a concern for many schools. It is important that schools work hard and prioritize keeping their students on track with their loan repayment. Default prevention can take many forms, whether you fully outsource your default prevention, or if you do it manually in-house, each face their own issues.
Life Without DPS
Some schools take the outsourced approach that gives the school an entirely hands-off approach to tackling default. This method gives the Default system provider all the power in reaching out to your students and helping them decide the right repayment plan. Outsourcing can have a real impact on your CDR’s and since default prevention takes a tremendous amount of time and effort schools must decide if outsourcing is the right decision.
Schools must consider the quality and level of customer service your students will receive. In-house staff provides better and more personal service at a lower cost. No one knows the student population better than the in-house staff. Often times third party service providers hire call center representatives that may not fully understand the industry. Borrower outreach specialists who do not truly understand the industry coupled with lack of knowledge on the borrower can cause confusion and can often mislead students into the incorrect repayment plans.
Using an internal staff for student outreach has multiple benefits. Not only does your staff know the student population better, but they also have a grasp on students who did not finish their degrees which is a strong indicator of future default. With this knowledge, coupled with the personal touch of a sense of responsibility to the students, the inhouse representatives have a unique opportunity to discuss possible options besides a typical repayment plan. They can offer a return to school approach that is a win-win situation for all involved. Offering a way back to the school not only lowers the student’s chances of default by pausing payments until after graduation, but it also increases the chances of graduation and offers a possible career path and adequate income level to pay the debt.
In-House (no system)
Some schools take the completely inhouse approach using spreadsheets and department of education resources in order to tackle default. This method poses its own issues and difficulties. Not only is the conversion of department and servicer files extremely difficult, but it also requires input from the school’s IT team. Data from the department and servicers comes in a string of Commonline data that is hard to decipher. Someone with the appropriate knowledge must sift through the report and parse out the data that the school can use. This is an extremely manual and arduous process. It is not efficient or accurate. Data from the department can change weekly making this already long process into a recurring task.
Once the data has been figured out, the school will then need to either use an existing spreadsheet to analyze the data or create one. Some of the examples of spreadsheets on the department of education website have around 155 columns to “organize” the data.
Then comes the outreach. Once a school has all the data organized in a spreadsheet a manual process of filtering and spreadsheet manipulation will need to ensue in order to get it down to a list of students that need attention. The in-house crew will make the calls, manually document notes and resolutions, and update the borrower within the spreadsheet. All of these manual processes are prone to human error and risk offering outdated information to the student possibly hindering the best outcome for either party.
Schools need to identify and consider if they have the resources to dedicate the effort needed to effectively reduce and manage default for their borrower portfolio. A school must also consider that in order to support the in-house effort, the school will need to continue to provide training and career opportunities to their staff as well.
Life with DPS
Often schools believe that the above are their only two options. At PTI we marry the two concepts. PTI offers a Default Prevention System that takes care of the human error and messy spreadsheets. DPS offers automated outreach efforts, reports, and the analytics needed to reduce and manage a school’s default, while also understanding the importance of a school owning the borrower outreach. We provide the tools, and the school provides the people. A match made in default prevention heaven.
A member of the PTI team will schedule the initial meeting to get the system rolling for the school. We work with the default and IT team to make this process quick and efficient. PTI will train your staff and share FAQ’s, use case scenarios, and access to video walkthroughs of the most common areas of the system. Once the system is live it gathers and analyzes the data from multiple sources giving your CDR managers insight into the cohorts to establish automated campaigns to reach borrowers. NO MORE MESSY SPREADSHEETS. Borrower outreach counselors walk borrowers through a resolution to their delinquency, then document and track that until there is a full resolution at the servicer level. ALL IN ONE PAGE OF THE SYSTEM. CDR managers can analyze borrower statuses, cures, and defaults to understand the conditions of a particular cohort and then run predictive scenarios based on cure rates and other factors.
Working with PTI and integrating DPS into your school’s in-house default prevention strategy removes the chaos and time it takes to create, maintain, and work a faulty spreadsheet that is prone to human error. Utilizing DPS with your school’s outreach team combines the features of the system with your talented staff to allow for a direct, calculated, and personal approach to default prevention. School and Executive stakeholders are kept in the loop through automated and manual reports to share analytics on students being worked and cured. Dashboards powered by Jasper provide a visual on both the current state of a set of cohorts and historical snapshots for every past month, as well as how many borrowers are being reached and how successful your contact attempts are. The CDR Dashboard provides monthly delinquency total and goal projections and breaks down delinquencies in 30/60/90-day buckets. The Workforce dashboard displays performance metrics by employee, school, cohort, campaign type, and time of day.