“Attainment,” “persistence,” “retention” – these are the buzzwords in the higher education community today. President Obama’s administration has set its sights squarely on improving the nation’s graduation rates. Today, a disturbingly low 18 out of every 100 students who enroll in a certificate or degree program will actually manage to attain that degree. Among industrialized nations, the United States ranks 15th in college completion. Worst of all, these withdrawn borrowers are 10 times more likely to default on their student loans.

The plight of withdrawn borrowers looms large for many schools. Not only do financial aid officers worry about those students who leave school without attaining degrees to better their lives, but these professionals also know that high student loan cohort default rates can jeopardize their school’s ability to participate in any federal aid programs.

Fortunately, guarantors can help schools develop and successfully implement programs to aid withdrawn students and positively impact default rates. Here are some top strategies.

• Focus on early detection. Guarantors can do much to help withdrawn borrowers—once they’ve been identified. But a natural lag time exists in the reporting process between servicers and guarantors. Don’t depend on that process as your first line of notification. Find out about withdrawals as quickly as possible though close coordination between the registrar and the financial aid office. And use well-trained peer debt counselors as a resource—not only are fellow borrowers receptive to their message, but a peer debt counselor might learn of a student’s withdrawal weeks before the school does. It’s vital to collect and communicate early signs of withdrawal wherever they originate.
• Capture contact information at every opportunity. You can’t help a withdrawn student if you can’t reach him or her. In addition to the references on borrowers’ loan applications, collect references during Entrance and Exit interviews, during peer debt counseling, and at any points of contact with borrowers.
• Greet borrowers with a name they know. It’s vital to introduce borrowers to their guarantor and servicer early in the borrowing process. Borrowers should know who these entities are and understand the role each company plays in the student loan repayment process. That way, contacts via phone, mail, or email from their guarantor or servicer will be welcome during times of need.
• Provide solid debt management advice during withdrawal—and from day one. Work closely with your guarantor to provide financial literacy guidance such as budgeting advice and thorough debt management education throughout students’ school experience. Guarantors provide handouts, on-campus trainings for both students and financial aid professionals, Web resources, and one-on-one guidance for borrowers throughout the life of the loan.

Guarantors can play a key role in both supporting school’s efforts to lower cohort default rates, and providing counseling and proactive, positive outreach to withdrawn borrowers toward successful debt repayment. But services like these are in jeopardy of being eliminated by Congress this fall. American Student Assistance believes all student loan borrowers, regardless of how their federal loan is originated, should be entitled to free support services from a guarantor.

Eliminating the FFELP shouldn’t mean eliminating our commitment to higher education borrowers and their families. It’s not about the status quo, it’s about the students.

For more information, visit www.borrowersrights.org.