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 2
$1 TRILLION in student loan debt! 3
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%
2010 3 YR CDR National Landscape 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
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?
Little help and power for schools 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
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?
New Student Orientation Learning Support College Experience My Learning Plan Financial Literacy and Default Prevention 2014 Career Advising Early Alert System
2 Financial Literacy Counseling NOTE: Exit Counseling does not include Manage Your Spending While in School. Available on studentloans.gov 12
6 Servicer Role Default Prevention Examples of activities servicers are doing: In-School/ Grace Repayment Early Stage Delinquency Late Stage Delinquency Critical Stage Campaigns about repayment Payment Reminders Payment Reminders Targeted mail strategies Targeted mail strategies Communications about auto debit Notification of Repayment Plan Options Campaigns describing repayment options Account placement with specialist Account placement with specialist Engage borrowers through social media Targeted campaigns of expiring deferment status Engage borrowers through social media Unique outbound messaging Unique outbound messaging Reminders of impact of delinquency Skip trace review 13
What schools are doing 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
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 15
Business Partners Ceannate Corporation Nelnet Champion College Services, Inc. North Star ECMC Solution Services SALT (ASA) EdFinancial Services Inceptia Organization (NSLP) TG USA Funds McKenzie Financial, Inc. WISS (Wright International Student Services) 16
Florida Initiative 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
Tampa Bay Student Loan Consortium 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 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 2 nd meeting in-depth look at the upcoming USF Bull 2 Bull Ambassador program 3 rd meeting CDR, Default Management, Clearinghouse, and enrollment concerns 4 th meeting outbound calls, Shopping Sheet, and tour of USF Bull 2 Bull facility 5 th meeting Tour of National Aviation Academy default management area, review of their year one results 6 th meeting University of Tampa successes, training of support staff discussion, FSA Sessions, It s My Future!
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 21
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
Student Loan Debt @ SPC 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 $150,000,000 $100,000,000 $50,000,000 $0 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 FY 09 FY 11 FY 09 FY 10 FY 11 FY 12
SPC Cohort Default Rate 25 20.9% 20 17.5% 15 10 2 YR CDR 3 YR CDR 5 0 2006 2007 2008 2009 2010 2011
3 Year Cohort Default Rate 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 9 th highest 3 year default rate among Florida s 28 community colleges and 4 th highest in the number of defaults
CDR Analysis - Grades Students attended on average between three and six terms with a number of unsuccessful grades (W & F) Source: ProEducation Solutions, St. Petersburg College Cohort Default Rate (CDR) Review, Oct 2012
CDR Analysis Delinquency & Consolidation 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 Source: ProEducation Solutions, St. Petersburg College Cohort Default Rate (CDR) Review, Oct 2012
5 Examples of Who and Why 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 Do the leg-work, let your data lead the way. 29
5 Examples of Who and Why More Food For Thought 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 30
Default Prevention Manager 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
SPC SALT Success so far 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!
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
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%
University Scholarships & Financial Aid Services 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
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
What Are We Doing? 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? Required online course for all new freshmen Budgeting Credit & credit card use Financial aid basics 98% completion rate 40
What Are We Doing? 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 41
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 42
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 43
Did I Mention Money?! 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. 44
Where Do We Go From Here? Data, data, data Evaluate progress so far Expand program services 45
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 46
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