Palomar College Default Prevention Plan This plan is being created pursuant to the requirements in the three year cohort default rate regulations at 34 C.F.R. 668.217 (regulation). Palomar College had an official cohort of 33.1% for the FY 10 three-year calculation. Note: Our cohort default rate projections suggest that we will also be at or above 30% for FY 11, and that we need to take aggressive steps to be below 30% for both FY 12 and FY 13. As a result, we will be implementing this default prevention plan in January 2014 aware that we will likely be submitting another required default prevention plan to FSA for the FY 11 three year CDR cycle. Additionally, we will be taking steps to address remaining delinquency in both FY 12 and FY 13, employing both a third party servicer and initiating schoolbased default aversion activities, both of which will be described in further detail below. The structure of the Palomar College Default Prevention Plan will follow the requirements in the regulations as follows: Part 1: Description of our Default Prevention Task Force Part 2: Analysis of Data Part 3: Steps/Interventions to Reduce Default Risk and Default Rates Part 4: Measuring the Effectiveness of Interventions Part 5: Monitoring Plan Implementation We have also added several non-regulatory sections to complete our institution-wide plan: Part 6: Utilizing Resources of Federal Servicers Part 7: Other Default Prevention Activities Part 1: Palomar College Default Prevention Task Force Palomar College has created a default prevention task force as required by the regulation at 34 CFR 668.217. The task force is responsible for overseeing the entire default prevention effort, performing an executive and management function for the life of the project. Make-up of Our Default Prevention Task Force: Palomar College understands that the task force is required by regulation at 34 CFR 668.217. Given that student loan default risk arises, in part, from many aspects of institutional operation, a task force has been created that represents all parts of the Palomar College community. Here are the members of our task force and the area of institutional operation each represents: Jamie Moss Michael Large Enrollment Services Supervisor Institutional Research Analyst 1
Jose Ramirez Rosie Antoneicchia Assessment Office Coordinator Career Center Coordinator (Faculty Counselor) Unfortunately, we were not able to get a faculty member to participate on the committee at this time. Our Default Prevention Plan will include establishing the task force as an official permanent shared governance committee for the college. This will ensure faculty representation Role of Our Default Prevention Task Force As mentioned above, out task force will perform an executive and management function in the default prevention process, from creating the default prevention plan to monitoring results and making changes as necessary in the future. Here are the responsibilities of our task force: The task force has conducted an analysis to determine who is defaulting, and why. The task force has created, from this analysis, a set of measureable interventions/steps that address the results of the foregoing analysis (i.e., risk that comes from poor educational outcomes, poor employment outcomes and/or poor repayment outcomes) The task force has created a set of strategies to execute these steps, assigning responsibility for carrying out these steps; establishing a set of measures to determine the effectiveness of these efforts; establishing deadlines for reporting results; The task force will monitor and measure the results of these steps and where necessary, make adjustments so that our goals will be achieved; and The task force will, as it deems necessary, take other general steps to reduce both default rates and default risk among Palomar College student borrowers. Part 2: Analysis of data This section will identify those borrowers who, based upon the analysis of data by the task force, appear to have a higher risk of loan default, and why. The task force analyzes the 78 defaulting borrowers for the FY 10 cohort. We believe that these defaulters more closely represent those current and future borrowers we hope to influence through the interventions described in this plan. The following represents the results of our analysis and identifies students who enroll in Palomar College and who, we believe, are at greatest risk of student loan default in the future, and why: Students with zero units and are 1 st time borrowers Students were identified on financial aid warning status after the 1 st semester enrolled. Students whose assessment test reflected basic skills level (i.e., remedial level) Our identified default risk appears to be initially related to poor educational outcomes for our student borrowers, as well as later poor repayment outcomes. The steps we will describe below, in Part 3 of this plan, 2
will describe the steps we will take to address both the impact of poor educational outcomes for our student borrowers, and steps we will take to improve the overall likelihood of loan repayment of all student borrowers. Part 3: Steps/Interventions to Reduce Default Rates and Default Risk and Assignment of Responsibility: Default risk arises, in general, from poor educational outcomes, poor employment outcomes and/or poor repayment outcomes. This was certainly the case at Palomar College. As we articulated in Part 2 above, Palomar College s default risk is being driven by, in most cases, a combination of these factors. Our interventions will include steps which are designed to address the nature of the risk identified. As you will see, poor educational and repayment outcomes were the primary driver of default risk among student borrowers at Palomar College. Our corresponding interventions include both student success and student repayment components. Below we have described the interventions that will become the core of the Palomar College default prevention plan, together with the person/entity responsible for carrying them out: 1) We plan on requesting that the Default Prevention Task Force be an official operational committee under the Student Services Planning Council. Specifically Palomar College Strategic Planning Council, is the principal participatory governance body of the College, creates the processes for recommending College policies and governance committee structures. The governance structure provides for representation from seven recognized constituencies at Palomar College; students, Faculty Senate, bargaining unit faculty, bargaining unit classified staff, Administrative Association members, Confidential and Supervisory employees, and senior and executive administration. This will ensure representation from faculty, staff and students to participate and be granted release time. In addition, the committee will also have the ability to present recommendations for actions to be approved and implemented and viewed as a college position and not solely a financial aid matter. Furthermore, this will create awareness within the college community of the negative consequences to the college, current and potential students about student loan defaults. The Director of Financial Aid will continue to Chair the task force. 2) The California Community College Chancellor s Office (CCCO) has begun a system-wide effort to increase both student persistence and student success among students who enroll in community colleges. The Task Force will be monitoring these efforts, and meeting periodically with the Parker Pierson College school-level student success team, to discuss those areas in which the teams can work collaboratively to both increase student success and reduce default risk among current and future students. The Director of Financial Aid will be the responsible for ensuring communication with CCCO. Because we have so few student borrowers, PC will focus its default prevention efforts on all student borrowers, in general, although providing additional and specific attention on the three groups of high risk populations described above as they come to the attention of the Task Force. While not all student borrowers will receive, for example, support to increase educational outcomes, all student borrowers will receive supplemental support to improve repayment outcomes. Please note the follow steps we will take to address default risk associated with both poor educational outcomes and default risk associated with poor repayment outcomes: 3
Actions to improve educational outcomes 1) We plan to work in partnership with Palomar College s Student Success Task Force as they implement SB1456 signed into law in September 2012 to require the following for all students. a. Take an assessment/placement test to determine English and Math placement which will identify students who would need Basic Skills courses. b. Complete a college orientation (required for priority registration status) c. Meet with an academic counselor and develop an educational plan the list all courses required for a student to complete their program of study in a timely manner. Enrollment Services and Counseling Services is responsible for complying with the law for all students enrolled at Palomar College. 2) We plan on establishing a Pilot Program to contact all currently enrolled student loan borrowers who are either 1 st year at Palomar College or who are identified by the Financial Aid Satisfactory Academic Warning report for the following activities. a. Contact student identified twice a semester to check how they are doing in class and refer them to appropriate support services such as tutorial, counseling and disability resources b. 1 st year students English as a Second Language (ESL) students to meet with the Assessment Office to discuss their assessment results and selection of program major and course enrollment c. Require currently enrolled loan borrowers to complete a career/program major questionnaire and meet with representatives from the Career Center to discuss job market for career selected to determine if program of study will provide them the job and salary that will result in their ability to repay their student loans. d. Students on warning status will meet with an Academic Counselor to discuss the following: i. What were the reasons for not making progress the previous terms ii. Identify interventions to ensure that progress is made iii. Referrals to other support services such as Tutorial and Disability Resources Center e. All loan borrowers who have either indicated they are having problems in completing their courses during the semesters or have been identified on warning status will be required to provide three (3) additional references. 3) We will request faculty to notify counseling department as well as refer students on financial aid who are struggling in class to meet with an academic counselor, tutorial services or Disability Resources Center for intervention. It is our hope that this collaborative effort to identify students and refer them to support services will reduce complete withdrawals from the college. The Director of Financial Aid will work with the Vice President of Student Services and Instructions to conduct various faculty presentations and send email reminders each semester. 4
4) We will partner with Palomar College s First Year Experience (FYE) program to help student borrowers succeed their first year at the college. First-Year Experience (FYE) is a year-long college program focused on providing first-year students with the resources and support needed to transition successfully to college. The program encourages academic achievement, social integration, and personal success with the assistance of a strong support network of peers, staff, and faculty. Students participate in an orientation and receive individual college planning and financial aid application assistance, referrals to college resources, mentoring, and tutoring support; they participate in academic enrichment, career, and social activities throughout the year as well. The Financial Aid Advisor assigned as the Loan Program Coordinator will be responsible for communicating with FYE representatives on the status of the student borrowers in the program. Actions to improve student loan repayment 1) With the assistance of an outside consultant, Parker, Pierson and Associates, and the CCCCO, the school has identified a third party servicer, i3group which will provide supplemental servicing support for our FY 12 and FY 13 delinquent borrowers. The effort will be monitored by both the school and our consultants on a monthly basis to insure that the contractor is meeting the objectives of this short-term contract. The task Force will be monitoring these results and providing school leadership with monthly reports about the status of delinquent borrows and our projected cohort default rates for these two open years. The Director of Financial Aid is the contact with i3group. 2) We plan on providing in person group Direct Loan Entrance Counseling. For over 10 years, we have required borrowers for each school year, new and continuing students to complete the U.S. Department of Education Direct Loan Entrance Counseling online prior to submitting a loan application. With the start of the 2014-2015 school year, entrance counseling will be conducted in person group sessions. 3) We will continue to require students to complete an online Financial Literacy workshop. The Financial Aid Advisor assigned as the Loan Program Coordinator will continue performing this task and 4) We plan on providing individual in person loan counseling with to students who have an aggregate $12,000 or more. 5
5) We will continue to require online Exit Counseling prior to the disbursement of the student s second loan disbursement during the loan period and still email students informational links after the semester has ended. However, we plan to expand further efforts to students who have completely withdrawn based on no units completed at the last semester enrolled and not enrolled for the following semester. These students will be contacted immediately by phone and mail about repayment and options to avoid going into default. 6) We will continue to adhere to the federal requirement of providing timely and accurate enrollment reporting throughout the academic year by means of the Student Status Confirmation Report (SSCR) The Financial Aid Systems Specialist will continue to ensure this is completed. 7) We will require student borrows to establish an on-line account with their Federal loan servicer. 8) We will require that student borrowers who are part of any of the three high risk groups provide fresh contact information to the Financial Aid office during the course of each term of enrollment. Part 4: Measuring the Effectiveness of Our Interventions The results of this implementation process will be reported back to, and measured and monitored by, the PC Default Prevention Task Force. Here is how the Task Force will measure the effectiveness of the steps to be taken in our default prevention plan: Actions to improve educational outcomes 1) We plan to work in partnership with Palomar College s Student Success Task Force as they implement SB1456 signed into law in September 2012 to require the following for all students. a. Take an assessment/placement test to determine English and Math placement which will identify students who would need Basic Skills courses. b. Complete a college orientation (required for priority registration status) 6
c. Meet with an academic counselor and develop an educational plan the list all courses required for a student to complete their program of study in a timely manner. Enrollment Services and Counseling Services is responsible for complying with the law for all students enrolled at Palomar College. The Financial Aid Systems person will input student borrowers in a Student Group in PeopleSoft database so that a report can be obtained to reflect if and when the student borrowers completed an assessment test, college orientation and have an educational plan developed with a counselor. The information will be reported to the Default Prevention Task Force monthly. 2) We plan on establishing a Pilot Program to contact all currently enrolled student loan borrowers who are either 1 st year at Palomar College or who are identified by the Financial Aid Satisfactory Academic Warning report for the following activities. a. Contact students identified twice a semester to check how they are doing in class and refer them to appropriate support services such as tutorial, counseling and disability resources b. 1 st year students English as a Second Language (ESL) students to meet with the Assessment Office to discuss their assessment results and selection of program major and course enrollment c. Require currently enrolled loan borrowers to complete a career/program major questionnaire and meet with representatives from the Career Center to discuss job market for career selected to determine if program of study will provide them the job and salary that will result in their ability to repay their student loans. d. Students on warning status will meet with an Academic Counselor to discuss the following: i. What were the reasons for not making progress the previous terms ii. Identify interventions to ensure that progress is made iii. Referrals to other support services such as Tutorial and Disability Resources Center e. All loan borrowers who have either indicated they are having problems in completing their courses during the semesters or have been identified on warning status will be required to provide three (3) additional references. A report on the status report of all loan borrowers identified in this Pilot Program indicating the activities identified above has been performed and completed by the student. The report will be submitted to the Default Prevention Task Force monthly. 3) We will request faculty to notify counseling department as well as refer students on financial aid who are struggling in class to meet with an academic counselor, tutorial services or Disability Resources 7
Center for intervention. It is our hope that this collaborative effort to identify students and refer them to support services will reduce complete withdrawals from the college. The Director of Financial Aid will work with the Vice President of Student Services and Instructions to conduct various faculty presentations and send email reminders each semester. The Financial Aid Systems person will input student borrowers in a Student Group in PeopleSoft database so that a report can be obtained to reflect if and when the student borrowers were referred to tutorial services, meet with an Academic Counselor or seek services at the Disability Resources Center. The Financial Aid Advisor assigned as the Loan Program Coordinator report status to the Default Prevention Task Force monthly. 4) We will partner with Palomar College s First Year Experience (FYE) program to help student borrowers succeed their first year at the college. First-Year Experience (FYE) is a year-long college program focused on providing first-year students with the resources and support needed to transition successfully to college. The program encourages academic achievement, social integration, and personal success with the assistance of a strong support network of peers, staff, and faculty. Students participate in an orientation and receive individual college planning and financial aid application assistance, referrals to college resources, mentoring, and tutoring support; they participate in academic enrichment, career, and social activities throughout the year as well. The Financial Aid Systems person will input student borrowers in a Student Group in PeopleSoft database so that a report that will cross-check students in the FYE Student Group. The Financial Aid Advisor assigned as the Loan Program Coordinator will be responsible for communicating with FYE representatives on the status of the student borrowers in the program and will report the information to the Default Prevention Task Force monthly. Actions to improve student loan repayment 1) With the assistance of an outside consultant, Parker, Pierson and Associates, and the CCCCO, the school has identified a third party servicer, i3group which will provide supplemental servicing support for our FY 12 and FY 13 delinquent borrowers. The effort will be monitored by both the school and our consultants on a monthly basis to insure that the contractor is meeting the objectives of this short-term contract. The task Force will be monitoring these results and providing school leadership with monthly reports about the status of delinquent borrows and our projected cohort default rates for these two open years. 8
The Director of Financial Aid is the contact with i3group. The Financial Aid Systems person will upload fresh NSLDS data to our consultant s website. Consultants will produce a monitoring report, which the FA Director will share with both the Task Force and management on a monthly basis to assess effectiveness at meeting our cure rate goals for FY 12 and FY 13. 2) We plan on providing in person group Direct Loan Entrance Counseling. For over 10 years, we have required borrowers for each school year, new and continuing students to complete the U.S. Department of Education Direct Loan Entrance Counseling online prior to submitting a loan application. With the start of the 2014-2015 school year, entrance counseling will be conducted in person group sessions. The Loan Coordinator will provide the Default Prevention Task Force a monthly report on student borrowers attending the group session. 3) We will continue to require students to complete an online Financial Literacy workshop. The Financial Aid Advisor assigned as the Loan Program Coordinator will continue performing this task and The Loan Coordinator will provide the Default Prevention Task Force a monthly report on student borrowers completing the online workshop. 4) We plan on providing individual in person loan counseling to students who have an aggregate $12,000 or more. The Loan Coordinator will provide the Default Prevention Task Force a monthly report on student borrowers who have an aggregate of $12,000 and have completed the individual in person loan counseling. 9
5) We will continue to require online Exit Counseling prior to the disbursement of the student s second loan disbursement during the loan period and still email students informational links after the semester has ended. However, we plan to expand further efforts to students who have completely withdrawn based on no units completed at the last semester enrolled and not enrolled for the following semester. These students will be contacted immediately by phone and mail about repayment and options to avoid going into default. The Loan Coordinator will provide the Default Prevention Task Force a monthly report on student borrowers who have completed the online Exit Counseling as well as student borrowers who did not return the following semester and was contacted by phone and mailed information on repayment options. 6) We will continue to adhere to the federal requirement of providing timely and accurate enrollment reporting throughout the academic year by means of the Student Status Confirmation Report (SSCR) The Financial Aid Systems Specialist will continue to ensure this is completed. The Financial Aid Systems Specialist will provide the Default Prevention Task Force a monthly report of enrollment reporting completed by means of the Student Status Confirmation Report (SSCR). 7) We will require student borrows to establish an on-line account with their Federal loan servicer. The Loan Coordinator will provide the Default Prevention Task Force a monthly report on student borrowers who have established an on-line account with their Federal Loan servicer. 8) We will require that student borrowers who are part of any of the three high risk groups provide fresh contact information to the Financial Aid office during the course of each term of enrollment. 10
The Loan Coordinator will provide the Default Prevention Task Force a monthly report on student borrowers who are part of any of the three high risk groups that have provided fresh contact information during each term they are enrolled. Part 5: Monitoring Plan Implementation The PC Default Prevention task Force will meet, for the first six months, on a monthly basis to assess the implementation of the actions described above. Over the next month we will be developing a tracking mechanism which will allow the team to track actions taken, by whom, and the outcomes of these actions. If student borrowers refuses to comply with any of the above identified actions stated in the plan to reduce student loan default college services will be blocked such as enrollment for future semesters and official academic transcript. Part 6: Utilizing Resources of Federal Servicers We have reviewed the default prevention products and services of our top two Federal servicers. We have decided to adopt the following products and services as part of our default prevention plan: Sallie Mae: As part of the school-based outreach effort, Palomar College s Financial Aid Office will use the delinquent letter templates provided by Sallie Mae to make contacts to delinquent borrowers in addition to the third party servicer and the federal servicers. All borrowers in delinquency will be sent these communications once per month. Great Lakes: As part of the school-based outreach effort, Palomar College s Financial Aid Office will use the delinquent letter templates provided by Great Lakes to make contacts to delinquent borrowers in addition to the third party servicer and the federal servicers. All borrowers in delinquency will be sent these communications once per month. Part 7: Other default prevention activities The Palomar College Default Prevention Task Force has determined that some additional broad efforts will be needed to reduce student loan default in the near and long term. In this regard, the school has initiated several efforts to reduce loan default among Fiscal Year 2012 and Fiscal Year 2013 delinquent borrows, as follows: Short Term: We are also planning to submit to the U.S. Department of Education in response to their request for ideas to test alternative approaches for the administration of the Federal Student Financial Assistance programs as part of the Department of Education s ongoing Experimental Site Initiative. The idea would be to waive restrictions to the disbursement of subsidized student loans for first time student loan borrowers to after a mid-semester academic progress review is determined. If a student is doing satisfactorily at the mid-semester and is still attending, then the loan may be disbursed before the end of the first semester. If this idea is accepted, Palomar College will be an applicant for this Experimental Site. 11
Long Term: The California Community College Chancellor s Office has begun a system-wide effort to increase both student persistence and student success among students who enroll in community colleges. The Task Force will be monitoring these efforts, and meeting periodically with the Palomar College school-level student success team, to discuss those areas in which the teams can work collaboratively to both increase student success and reduce default risk among current and future students. We plan on continuing as the Department of Education Experimental Site - Experiment 6 Direct Loan Program Limiting Unsubsidized Loan amounts for the following group of students who are considered at-risk students. Part 8: Conclusion a. 1 st time students with 24 units or less completed towards their declared program of student at Palomar College b. Students with a total aggregate loan debt of $12,500 or more (subsidized and unsubsidized) c. Students eligible for federal aid based on a probation or academic plan resulting from an approved Satisfactory Academic Progress (SAP) appeal. The Palomar College Default Prevention Task Force understands that our default prevention efforts must focus on both short term and long term efforts to reduce both default rates among students who have received loan and are already in repayment, and default risk among those students who are currently enrolled or who will enroll in Palomar College in the future. We understand that this effort will combine strategies which are both targeted and general in nature. We will be monitoring the results of the efforts described in this plan and making adjustments as necessary to meet our institutional goals. We will continue to seek additional opportunities to both reduce default rates and default risk. If you have questions about any aspect of this plan or the operation of our default prevention task force, please contact Mary S. San Agustin, Director of Financial Aid, Veterans and Scholarship Services at 760-744-1150 ext. 2373 or msanagustin@palomar.edu 12
Addendum: Low Participation Ratio Palomar College for over five years has had less than 500 student loan borrowers for an enrollment of over 30,000 students each school year. This represents a participation ratio of 0.0166 which is substantially lower than the minimum of 0.06015. The college has always been diligent in educating students in minimizing debt burden. In addition, this low participation ratio is also a result of its status as a low-cost public institution. Students who are California residents and qualify for FAFSA and have at least an unmet need of at least $1104 qualify for an enrollment fee waiver (i.e., tuition cost) for the school year. Therefore, students would have approximately $24 remaining in mandatory fees to pay. They would receive their Pell Grant, FSEOG, FWS and student loans to cover indirect cost of education to attend the college which includes room and board and other expenses identified in the Standard Cost of Attendance (COA). 13