Institutional Strategies

Institutional Strategies to Improve

Government Student Loan Repayment

Report Submitted to Merv Scott

Director, Student Services Branch Ministry of Advanced Education

Province of British Columbia

Jennifer Orum March 31, 2006

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Institutional Strategies to Improve Government Student Loan Repayment

Table of Contents

Page Introduction 2 Part 1: Factors That Play a Role in Government Student Loan Defaults 3 Part 2: Improving Government Student Loan Repayment School-based Default Prevention Strategies: US Context 10 Improving Government Loan Repayments: Canadian Context

• British Columbia Post-secondary Institutions 22 • Selected Canadian Post-secondary Institutions 41 • Provincial/Territorial Governments 51

Institutional Strategies & Practices for improving Loan Repayment

• Before post-secondary 62 • Early stages of Enrolment 64 • In-school & Late Stages of Enrolment 67 • After student leaves school 74

Appendices: A. Preventing Government Loan Defaults: Selected References 76 Additional web-based default behavior resources for Financial Aid Administrators 94 B. Selected ‘Tools’ for Use in Post-secondary Institutions 97

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Institutional Strategies to Improve Government Student Loan Repayment

Introduction Given the growing emphasis on default prevention, particularly within the context of the pan-Canadian Designation Policy Framework approved by the Council of Ministers of Education in April 2003, all partners in the student loan process are paying increased attention to loan repayment rates. The federal and provincial governments, as well as service providers, all play key roles in the loan process and have a responsibility and interest in maintaining the integrity of the student loan system. Our post-secondary institutions also play an important role in this system and clearly have an interest in improving the loan repayment rates of their students. Research in student government loan defaults over the past decade has suggested that successful completion of a student’s post-secondary program has a direct relationship to loan repayment behavior, as does income once the student leaves school. Thus, ‘student success’, both in the student’s program, and when they leave post-secondary for the workforce, are being seen as key variables in limiting defaults on government student loans. This report endeavours to identify strategies and practices being used in colleges, universities and institutes to directly or indirectly increase the government loan repayment rates of their students, including practices intended to increase student retention and completion rates. The purpose has been to create an inventory of default prevention and related ‘student success’ practices, as a useful resource for post-secondary financial aid administrators. After summarizing the recent research into factors related to loan repayment behavior, information is provided on the American context and the many system-wide initiatives directed at increasing loan repayment rates in the United States. Current strategies and practices in place at British Columbia institutions as well as selected ones across Canada are then described, followed by a summary of developments at the provincial/territorial government level. A final summary is given of institutional approaches, categorized into (a) prior to post-secondary; (b) early stages of enrolment; (c) in-school and late stages of enrolment; and (d) after students leave school. Two appendices are included: A - Selected References Re: Preventing Government Loan Defaults and Additional Web-based Default Prevention Resources for Financial Aid Administrators. Then B - Examples of Selected ‘Tools’ for Use in Post-secondary Institutions.

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Factors That Play A Role in Government

Student Loan Defaults Introduction The purpose of this review is to identify factors that play a role in government student loan defaults. It will attempt to identify those behaviors or conditions that appear to precede (or are concurrent with) borrowers not following through with their obligations to repay. This understanding will provide helpful background to formulating strategies that might increase the repayment rates on government student loans. Cause & Effect Versus Correlations Traditional cause and effect research generally involves making a prediction or hypothesis about behavior and then testing out that hypothesis. It usually has an experimental design that involves manipulating variables in specific ways to isolate causal relationships. Often such studies have a ‘control group’ for comparison purposes to assist in isolating what is actually a cause for a particular result. This is a method of controlling all variables except the ones of interest. Correlation research endeavors to determine how much of a relationship exists between variables. It can’t establish whether or not there is a cause and effect relationship, that ‘X’ caused ‘Y”, rather it can identify that ‘Y’ occurs at the same time or following ‘X’. Knowing that ‘X’ occurs can therefore help predict if ‘Y’ will happen, even if we don’t know that ‘X’ causes ‘Y’. Most of the studies into government student loan default behavior are correlation rather than cause and effect research. Researchers have attempted to determine what factors appear to occur at the same time or preceding the occurrence of loan defaults. Rarely does the experimental design allow one to conclude that ‘X’ condition or behavior or characteristic definitely causes ‘Y’ (default). They endeavor to establish that certain conditions ‘X’ and ‘Y’ appear to occur either before or during default behavior. This still provides very useful information, since being able to identify antecedent conditions for defaults can assist in predicting when they are likely to occur, even when a causal relationship cannot be established directly. Actions can then be taken to target specific groups of students or situations, with the objective of hopefully making default less likely to occur.

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Factors Which May Play A Role in Defaults The categories chosen are, for the most part, those summarized in the comprehensive literature review on default by Robin McMillion (2005, Texas Student Loan Corporation), but organized in a slightly different way. References to research within these categories include both studies identified by McMillion, plus others. A fuller description of research referred to in this section can be found in Appendix A by researcher/author name. 1. Borrower characteristics These refer to characteristics students have when they enter post-secondary education. 1.2 Gender Gender has been found in some studies to relate to default behavior, with men generally more likely to default on their student loans than women. (Flint 1996) Three studies have found default not related to gender. (Christman 2000; Lochner & Monge-Marango 2003; Harrast 2004) 1.3 Age Several studies have indicated that older students are more likely than younger students to default. (Flint, 1996; Christman 2000; Harrast, 2004) 1.4 Ethnicity While some studies have shown that students from certain ethnic backgrounds may be more likely to default (Volkwein & Szelest 1994; Dynarski 1994; Flint, 1996; Christman 2000; Harrast 2004), others have concluded that borrowers from various ethnic groups with similar educational attainments, marital status and family size have similar repayment behaviors. 1.5 Family Background & Income It has generally been found that students from low income families are more likely to default, as are those from families with limited education. (Dynarski 1994; Christman 2000) One study did not find any relationship between family income and education levels and default. (Flint 1996).

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1.6 Academic Preparedness A number of studies have shown that students who have higher achievement prior to entering post-secondary have lower default rates, and alternatively, those with lower achievement have higher default rates. (Dynarski 1994; Christman 2000). Locher and Monge-Marango (2003) found an interesting U-shaped relationship between SAT/ACT test scores and default - with default rates highest for the most able students (quartile 4), the rate for the least able (quartile 1) being quite close to that for quartile 4. Students in the middle quartile 3 had the lowest default rates. 1.7 Borrower Attitude One study of loans to law school students found that default is related to borrower willingness to pay and ability to pay, not to borrower characteristics or school characteristics and practices. (Monteverde 2000) 2. Post-secondary Experience Variables 2.1 Institution Variables Woo’s (1992) research analysis revealed that vocational schools, particularly privately-owned ones, are more likely to have students who default. Dynaski (1994) found that students from proprietary schools and two-year colleges were higher default risks, while Volkwein & Szelest (1995) commented that over half the defaulters in their study were those who attended proprietary schools. Human Resources and Skills Development Canada, in their 1997 evaluation of the Canada Student Loans Program, indicated that borrowers from colleges, especially private ones, are more likely to default than university students. Kapsalis (2006), in his StatsCan analysis of 128,000 Canada Student Loan borrowers who consolidated their loans in 1994/95, found that the average default rate within the first three years after consolidation for students from universities (graduate programs) was 12%, universities (undergraduate programs) 20%, colleges 30% and private institutions 43%. While default data has often been taken as evidence that type of school effects default behavior, much recent commentary suggests there is little evidence school characteristics actually impact default directly. The alternate analysis emphasizes that it is the characteristics of individual borrowers that can be the most effective predictor of defaults - that is, it is a function of the types of students who enroll in programs that relate to defaults, not factors related to the schools themselves. (Volkwein & Szelest 1994, 1995; Volkwein & Others 1995; HRSD 1997; Monteverde 2000).

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2.2 Major/Field of Study Volkwein & Szelest (1994) as well as Harrast (2004) and Rodgers (2004) found that students in certain majors/programs may have lower default rates than those in other programs. Volkwein & Szelest (1995) report that majoring in a scientific or technological discipline significantly increases the likelihood of repayment. Lochner & Monge-Marango (2003) found that the differences in default behavior and major disappear when debt and earnings are taken into account. Flint (1996) concluded there was no relationship between major chosen and default, but that the greater the congruency between a student’s college major and their post-school employment, the higher the likelihood of repayment. Data from Kapsalis’ StatsCan research (2006) indicates that field of study wasn’t a significant factor in default rates for college and private institution students, but did appear to be a factor for university undergraduate students. For example, he found that average default rates in the three years after loan consolidation for Arts students was 28%, while the rates for professional program students (Medicine/Dentistry, Health Sciences and Law) were in the range of 5% to 8%. 2.3 Duration of Attendance Factors Borrower default rates have been shown to decrease as the length of time in post-secondary education increases, and vice versa. (Christman 2000; Harrast 2004). McMillion (2004) reports that when students extend their attendance in an undergraduate program beyond five years, this has a negative impact on repayment rates. 2.4 Student Employment Volkwein & Szelest (1998), in their analysis of the National Post-secondary Student Aid Study, found that working while in college lowers default 7 ½% for non-white borrowers (with no impact on white borrowers). McMillion (2004) points out that this study did not look at the default implications of working a small number of hours versus a large number of hours. 2.5 Counselling Lein & Others (1993) concluded that counselling has large and beneficial effects, particularly when it ensures students are aware of their loan obligations. Flint (1996) found that, controlling for student background, school choice, academic and other characteristics, no apparent differences in repayment were related to whether loan counseling was done before, during or after enrolment by either the schools or the lenders. Howell & Deike’s (2004) research at Pennsylvania State University suggested that entrance and exit counselling have no effect on loan defaults.

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3. Post-secondary Success Variables 3.1 Completion Based on a large number of studies that have indicated students who do not complete their post-secondary program, either through failure or withdrawal, have a higher rate of loan defaults, many have concluded that ‘completion’ (or non-completion) is a key to predicting repayment and default behavior. (Woo 1992; Volkwein & Others 1995: Rodgers (2004); Rorie & Pierson 2005). This is borne out by recent statistics from the U.S. Direct Loan portfolio, which indicates that 71% of defaulters withdrew without completing studies. (Hildebrand & Walsh, 2006). Based on his comprehensive review of default literature, McMillion (2004) concludes that, whereas much of the early research on student default looked at the association between borrower or institutional characteristics and default behavior, the general conclusion of most researchers today is that success in post-secondary education plays a larger role in predicting who will default than does either the borrower’s background or the type of institution they attend. 3.2 Grade Point Average Many studies have shown that students with higher GPA’s have lower default rates, and conversely, students with low GPA’s have higher default rates, while some have found that students with failed courses are more likely to default. (Volkwein & Szelest 1994; Flint 1996; Christman 2004; Harrast 2004). Volkwein & Others (1995) found GPA to be a strong predictor of default behavior for Caucasian students, but not for minority students. 3.3 Continuous Enrolment Podgursky & Others (2002) report on a study following students from 1992 to 1999 to determine who defaults on their loans. They found that students who are continuously enrolled or who complete their program are far less likely to default than are students who drop out during the same period. Rodgers (2004) describes a joint study by the Colorado Student Loan Program and the Colorado Commission on Higher Education that found students who drop out, re-enrol and then drop out again have lower default rates than students who withdraw and don’t return.

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4. Post-college Variables 4.1 Level of indebtedness Several studies found that students with high indebtedness have lower default rates than students with lower student debts. It is suggested this reflects the fact that, for the most part, students with higher debt have continued longer in school and reached higher levels of educational attainment and thus higher earning power. One study found default rates increase with amount of educational debt (Lochner & Monge-Marango 2003), while another concluded there was no relationship between amount borrowed and default. (Flint, 1996). Kapsalis (2006) reports that high Canada Student Loan debt levels (defined as over $20,000) are related to higher default rates. 4.2 Unemployment Several studies have identified unemployment as one of the most significant variables associated with loan defaults. (Woo 1992) 4.3 Income Several studies have found a strong relationship of post-school income to default, (Woo 1992; Flint, 1996 & 2004). Kapsalis (2006) concludes that borrowers’ ability to repay their loans depends primarily on their income after leaving school. Based on a review of an extensive body of research literature and his own studies on loan default, Mortimer (2006) concludes that student success in the labour market (income and employment) is the primary determinant of loan repayment. 4.4 Personal and Family Status Variables such as being separated, divorced, widowed and having dependent children have been found to relate to higher default rates. (Volkwein & Others 1995). Flint (1996) found no relationship between post-college marital status and default. 4.5 Loan Repayment Behavior One study has shown that borrowers who have been in deferment or forbearance are less likely to default, while those who went into delinquency more than once were more likely to default. Monteverde (2000) found that an individual’s credit bureau score (presumably reflecting the borrower’s history of paying off debt) was an effective predictor of the probability of default.

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4.6 Knowledge of Repayment Obligations & Options Ryan (1993) concluded that for California State University students, loan repayment is positively associated with borrowers’ understanding of loan obligations and knowing the rights and responsibilities under loan terms. Lein & Others (1993) found that default is positively associated with lack of awareness of loan deferment provisions. Volkwein & Others (1998) concluded that lacking knowledge of repayment is not a significant factor in default. 4.7 Loan Servicing Factors Two studies have revealed that students dealing with multiple lenders have higher default rates. (Flint 1996/1997; Woo 2002) It has also been suggested (HRSD 1997) that default rates are significantly higher for borrowers dealing with some financial institutions compared with others. Statistics from the U.S. Direct Loan portfolio indicated that 56% of defaulters had incorrect telephone numbers on record, making it very difficult to contact them during the 360-day collection effort during delinquency. (Hildebrand & Walsh, 2006). Summary of Factors That Play A Role in Government Loan Defaults A relationship can be found between many factors and student loan default/repayment behavior, ones that relate to student characteristics (gender, age, ethnicity, family background and income, academic preparedness and borrower attitude); post-secondary experience variables (characteristics of institution, student major, attendance duration, employment during school, and loan program counselling); post-secondary success variables (completion, continuous enrolment and grade point average); and post-college variables (debt level, employment, income, personal and family status, loan repayment behavior and knowledge, as well as loan servicing factors.) While default rates for students who attend private career schools appear to be higher overall than students who attend public institutions, a number of researchers believe that the characteristics of individual borrowers may in fact be more important than characteristics of schools themselves in predicting defaults. At the same time, post-secondary success variables (specifically program completion and graduation) appear to be seen as key factors in loan repayment behavior, as are employment and income after graduation/leaving school. There seems to be a lack of research in certain areas, particularly the role that the government loan programs themselves, including their policies and processes, may play in impacting loan repayment rates. Future directions for research could include an investigation into whether the increasing number and complexity of federal and provincial government student aid programs may in fact be negatively impacting student loan repayment and default behavior.

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School-based Default Prevention Strategies: the U.S. Context

Introduction This chapter describes strategies, practices and tools used either directly or indirectly to improve the student loan repayment rates at the post-secondary institutional level in the United States. Given concern for government student loan defaults has been a significant educational, fiscal and political issue in the U.S. for considerably longer than it has in Canada, it appears reasonable to learn from the American experience. The following discussion focuses on ‘school-based’ government student loan default prevention strategies, referring to other practices and tools that can be used to supplement institutional approaches. School-based Default Prevention Approaches It is clear that there are many points where post-secondary institutions can interact with government loan borrowers in such a way that risk of defaults is decreased. In USA Funds’ Debt-Management Best Practices Manual, debt management and default prevention activities are categorized in four stages: Stage 1: Application and Loan Origination; Stage 2; In-School Period; Stage 3: Grace Period; Stage 4: Repayment Period. It also refers to strategies that occur pre-college, during college orientation of students and parents, when students are applying for their government loans, while students are attending the college, and at withdrawal or graduation. The manual can be located at http://usafunds/financial_aid/debt_management/best_practices/index.html USA Funds also provides a sample default management plan for post-secondary institutions, which has sections relating to pre-college, enrolment and application efforts, plus in-school and graduation/withdrawal efforts. It can be located at http://www.usafunds.org/financial_aid/debt_management/best_practices/keys_to_success/develop_plan/sample_plan/index.htm In Ensuring Student Loan Repayment: A National Handbook of Best Practices (http://ifap.ed.gov/eannouncements/attachments/0118nhbook1web.pdf) default prevention strategies are broken down into pre-college, in-school and grace period & repayment. The U.S. Department of Education, Federal Student Aid group’s Sample Default Prevention and Management Plan (http://.ifap.ed.gov/dpcletters/GEN0514.html) classifies activities into: (1) early stages of enrolment; (2) late stages of enrolment; and (3) after students leave school. Both in their Default Prevention & Management Plan and in their Tools for Schools: Default Management (see http://www.ifap.ed.gov/qamodule/DefaultManagement/DefaultManagement.html)

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the U.S. Department of Education refers to Late Stage Delinquency Assistance (LSDA) just prior to a loan being defaulted. This chapter categorizes school-based default prevention approaches, practices and strategies into: (1) before post-secondary; (2) early stages of enrolment; (3) in-school and late stages of enrolment; and 4) after students leave school. Default-Prevention Approaches: Before Post-secondary The focus of this stage is to help students and their families learn about the financial realities of post-secondary and the opportunities to access various types of repayable and non-repayment assistance, including the nature and implications of student loans. Some have recognized the importance of ensuring parents are informed early of the need to start thinking about financially planning for post-secondary. The State of Nebraska’s Educational Planning Centre has arranged for such information to be included in packets going home with parents of newborns from the hospital. The award-winning FinAid website www.finaid.com has sections to help students and parents plan (and understand that student loans must be repaid), with a section on parental information aimed at parents of newborns. The Fin Aid website also includes a very helpful “Student’s Financial Aid Checklist” which has a check-off list for important ‘to do’s’ starting with the junior year of high school and continuing until the student completes their post-secondary education. (www.finaid.com/students/checklist.phtml ) It would be interesting to develop a Canadian version of this checklist, one that includes specific reference to the existence of repayable student loans and non-repayable forms of assistance. The National Association of Student Financial Aid Administrators (NASFAA) has developed materials for financial aid administrators and high school counsellors to put on a ‘Financial Aid Night’. Resource materials available on the NASFAA website include: Guide to Planning and Conducting a Financial Aid Night, and Financing Education Beyond Highschool, a financial aid presentation script and PowerPoint slide show providing basic information students and parents need to know when applying for financial aid. A similar presentation script and/or slide show could be developed for the Canadian environment, with expanded reference to the student loan repayment requirement and the implications for student loan borrowers. The website can be located at http://www.nasfaaa.org/subhomes/financialaidnight/faidnight.asp Mapping Your Future is a national collaborative, public service project of the financial aid industry in the United States. It brings together the expertise of the industry to provide free college, career, financial aid, and financial literacy information and services for students, families, high schools and post-secondary

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institutions. The early awareness section of the Mapping Your Future website includes sections aimed as middle and high school students, parents, and counsellors, as well as post-secondary students and financial aid administrators. Downloadable PowerPoint presentations for both middle and high school students and families (http://mapping-your-future.org/mhsc/) can be used by both middle and high school counsellors as well as financial aid counsellors from post-secondary institutions involved in early awareness programs intended to provide information about repayable and non-repayable student aid. The sections on student loans could be expanded to emphasize the repayment obligation more fully. On March 31, 2006, Mapping Your Future announced a new on-line financial literacy educational tool Show Me the Future - an interactive financial literacy and life skills game, The game is designed to assist 12 to 20 year olds prepare for their futures by helping players understand: the cost of living, budgeting, the difference between wants and needs, the importance of financial planning, the need to set career goals and the value of higher education. The game can be found at: http://showmethefuture.org/game/index.cfm USA Funds introduced Unlock your Future in 2003, an early-awareness program for middle-school students and their families. It includes a 45-minute Student Track that informs students of their career and education options and encourages them to plan for their future. The 30-minute Family Track is a presentation for family members that complements the student presentation and encourages adults to play an active role in their child’s future. It covers the value of higher education for their children, 21st century career options and financial aid eligibility. Information on Unlock Your Future can be found at http://www.usafunds.org/financial_aid/resources/unlock_the_future.htm The College Board has a ‘Pay for College’s section of their website: http://www.collegeboard.com/student/pay/index.html It includes a Financial Aid EasyPlanner, information on applying for a government loan, a Scholarship Search database, and college financing calculators. A Financial Aid Calendar outlines, step-by-step, what should be done to plan financially and apply for government assistance, from the summer before senior high school year to the start of classes in September. Default Prevention Approaches: Early Stages of Enrolment The U.S. Department of Education has published a September 2005 update of its Sample Default Prevention and Management Plan, first issued in 2001 for schools that have students obtaining federal student loans. It includes sections on early stages of enrolment, late stages of enrolment and after students leave school, covering activities, techniques and tools to promote student and school

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success and reduce student loan defaults in the Federal Family Education Loan (FFEL) and national Direct Loan programs. It can be found at (http://.ifap.ed.gov/dpcletters/GEN0514.html U.S. Federal regulations require that schools provide entrance counselling to first time FFEL and Direct Loan borrowers, individually or in a group with other borrowers, or electronically. The counselling must explain how promissory notes work, emphasize the importance of repaying loans, describe the consequences of default, stress that repayment is required, regardless of educational outcome or subsequent employability, and show borrowers sample monthly repayment amounts based on their program of study. (2005-06 Federal Student Assistance Handbook). Schools are encouraged to enhance their entrance counselling to include:

• a review of terms and conditions of the loans and repayment options; • managing of expenses (budgeting); • reinforcement of the importance of communicating change of status to the

lender; • a review of borrower’s rights and responsibilities; • a review of deferments, forbearance and cancellation options; • a reminder of refund and other policies affecting withdrawals; • a reinforcement of the importance of keeping loan records; • a reminder about the requirement for exit counselling.

Schools are also encouraged to include financial literacy information such as the income potential of occupations relevant to their course of study and tools to manage debt. The U.S. Department of Education’s Ensuring Student Loan Repayment: A National Handbook of Best Practices (2001) recommends that parents be included in entrance counselling if borrowers are dependent students. The Mapping Your Future website includes on-line student loan counselling (OLSC) modules that meet the U.S. Department of Education’s federal loan counselling requirements and help students understand education loan obligations. This is a free public service and there are no requirements to use a specific guaranty agency or lender to participate. Details of OLSC for financial aid administrators can be found at: http://www.mapping-your-future.org/services/oslcpsindex.htm Other organizations have developed on-line counselling that meets federal requirements. One example is that made available through the American Education Services (AES), a division of the Pennsylvania Higher Education Assistance Agency. It can be accessed at: https://host208.aessuccess.org/ECounsel/Counseling/Index.do?clientid=PA&locale=en

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AES has also developed the www.YouCanDealWithIt.com website, designed to help college students, as well as recent and soon-to-be-graduates, understand the importance of financial literacy. The site includes sections on purchasing a first car, living on a budget, saving for the future, repaying their student loans, plus resources related to debt management. The component for Financial Aid Advisors includes an entertaining, downloadable video/with audio Common Cents Tour, a program that helps first year students become more financially responsible. The worksheets and exercises were developed by Dara Duguay, Executive Director of the Jump$tart Coalition for Financial Literacy and author of Please Send Money: A Financial Survival Guide for Young Adults on Their Own. The Common Cents Tour is available free of charge for use in Financial Aid offices and was designed for financial aid administrators to incorporate into the entrance counselling program. It can be established as a computer workstation for students to use or promoted for at-home use. It can be found at http://www.youcandealwithit.com/faas/default.html USA Funds has developed Life Skills, a financial literacy program designed to equip post-secondary institutions to teach their students to manage their time and money wisely while they are on campus and after graduation. Use of the Life Skills program is limited to institutions that use USA Funds as their primary guarantor or schools in states where USA Funds is the designated guarantor. While other schools cannot order and use the Life Skills materials themselves, the USA Funds website includes a helpful section that describes how schools using the Life Skills materials have integrated it into their financial literacy and/or student success programs. This section can be found at: http://www.usafunds.org/financial_aid/debt_management/usa_funds_life_skills/best_practices.html The Mapping Your Future (MYF) website includes Financial Fitness Tools: Ten Steps to Financial Fitness and a Debt/Salary Wizard. The Steps to Financial Fitness is intended to educate high school and college students about personal finance. The ten steps include: (1) understand the roles of student loan players; (2) avoid consequences of default; (3) be in control of your finances; (4) balance your cheque book; (5) establish a budget; (6) pay yourself and invest; (7) use credit wisely; (8) know your credit report; (9) clean up credit; (10) surf the web for more info. Students can determine if they are financially fit, get advice on the wise use of credit cards, learn about the consequences of default and how to avoid defaulting on their student loans and other debts, and access information on credit reports and investment options. Mapping Your Future also provides interactive calculators to help students with budgeting, balancing a cheque book, savings and loan consolidation. The Financial Fitness Tools are located at: http://www.mapping-your-future.org/features/dmtensteps.htm MYF also includes a Debt/Salary Wizard, which is an interactive calculator to help students and parents determine (a) how much salary is needed to make the

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payments on current and future student loan debt; and (b) how much can be borrowed, based on future expected earnings. The wizard can be found at: http://www.mapping-your-future.org/apps/debtwizard/ Among the additional strategies that can be used early in the enrolment period include:

• orientation sessions offered to students and parents by the post-secondary financial aid office personnel to provide information on financing education and debt-management, including information on alternatives to borrowing, appropriate borrowing, the responsibilities related to borrowing and the consequences of default.

• building first year experience sessions, programs or courses around one

of the financial literacy programs available to all institutions such as Mapping Your Future’s Financial Fitness Tools or the AES Common Cents Tour.

Default Prevention Approaches: In-school and Late Stages of Enrolment In their Sample Default Prevention and Debt Management Plan (revised version September 2005), the U.S. Department of Education emphasizes the importance of early identification and counselling of students at risk of defaulting. This includes borrowers who withdraw prematurely from their educational programs, borrowers who do not meet standards of academic progress, or both. The Department’s Ensuring Student Loan Repayment: National Handbook of Best Practices (2001) indicates that those who withdraw within the first year of enrolment are particularly at risk. The Handbook suggests institutional research departments at post-secondary institutions do research to develop a ‘profile’ of defaulters at their schools, when student-based default information is available to the institution. One example given is the Profile of a Student Loan Defaulter at the University of Illinois, Chicago, with this specific profile:

• the borrower failed to graduate • the borrower failed to provide a current address or phone number • the borrower owes less than $2,000 • the borrower faced poor job prospects • the borrower had other financial burdens besides education debt • the borrower did not perform well academically • the borrower came from a low income household • the borrower married another student with loan debt • the borrower was a single parent.

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In two presentations on Reducing Delinquency and Default, representatives from the U.S. Department of Education’s Federal Student Assistance Default Prevention and Management division proposed that institutions develop strategies for financial aid offices to quickly find out about students who leave early. They suggest that institutions should be sure that they collect sufficient contact information while the student is enrolled, so that they can immediately contact dropouts. Among the strategies proposed to deal with high-risk populations - monitor students’ ‘satisfactory academic progress’ and counsel potential ‘early leavers’. (Pierson, Schmidt & LeBorys and Rorie & Pierson: NASFAA Conference sessions, November 2004 & July 2005) The Sample Default Prevention and Debt Management Plan suggests that counselling should focus on the causes of withdrawal or unsatisfactory academic progress and solutions to resolve these matters. A further suggestion is that financial and academic counselling be integrated. The Ensuring Student Loan Repayment Handbook of Best Practices outlines five ways institutions can more effectively track dropouts:

• establish record-keeping processes and systems to alert the financial aid office when a loan recipient leaves school;

• communicate with enrolled borrowers frequently; • ask instructors to alert the registrar’s office when students in their classes

stop showing up, explaining that this will help the financial aid office assist students with their loans;

• check course drop procedures to ensure they’re designed to identify borrowers who drop all of their courses and set up a process to contact those students immediately and inform them they need to come in for academic and financial counselling;

• send letters to borrowers who don’t use early registration for the next term, ask them if they’re returning and remind them of loan repayment obligations

In their Sample Default Management Plan, USA Funds suggests offering workshops several times each term on topics such as reducing living expenses, searching for outside scholarships, loan consolidation, transfer procedures, investing and budgeting. They also suggest designing a communication stream for students that includes: (1) a debt-management newsletter distributed monthly via campus mail and e-mail to provide information on student loan application issues, credit cards, issues to consider when borrowing, and money-saving tips; (2) an FYI e-mail campaign consisting of brief but effective information e-mails to students on debt management, saving, credit, repayment, and borrower benefits - information that students can put into action immediately; and (3) sponsoring a debt-management day in the middle of term(s) involving informational postings in student food service facilities, an information table, guest speakers, giveaways and food. See

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http://www.usafunds.org/financial_aid/debt_management/best_practices/keys_to_success/develop_plan/sample_plan/index.html The U.S. Department of Education requires that Perkins Loan and Direct Loan borrowers have exit counselling before they graduate or when they drop below a 50% course load. The counselling can be provided to students individually or as a member of a group, or through audio-visual materials. As is the case with entrance counselling, exit counselling is offered on the web by guarantors, lenders, and by the Direct Loan Program. The required elements of exit counselling, as outlined in the 2005-06 Federal Student Assistance Handbook are:

• review of information from entrance counselling, particularly the consequences of default, the importance of the repayment obligation, the use of the promissory note, the obligation to repay the loan even if the borrower drops out, doesn’t get a job or is otherwise dissatisfied with the quality of the school’s educational programs and services;

• providing an average anticipated monthly repayment amount; • review of repayment options; • discussion of debt management strategies; • review of forbearance, deferment and cancellation options; • notification of the availability of loan information on the National Student

Loan Data System and the availability of the FSA Ombudsman’s office; • collection and updating of personal and contact information.

It is recommended that exit counselling also include providing the student with the current name and address of the borrower’s lender, an explanation of how to complete deferment forms and prepare correspondence to the lender, emphasizing that borrowers should always keep copies of all correspondence from and to them about their loans, and stressing that a borrower must make payments on his or her loans even if they don’t receive a payment booklet or billing notice. Developed by AES, Money Matters is a program to help students and recent grads become more financially responsible. It includes sections on understanding student loans, determining financial priorities, creating a budget, managing debt, and saving money. The component on understanding student loans includes information on borrowers’ rights and responsibilities, loan repayment, the loan grace period, consequences of default and tax deductions. It includes a student loan calculator and grace period calculator. This video (with audio) presentation is available free of charge for use in financial aid offices and compliments the U.S. Department of Education-required exit counselling program. It can be established as a computer workstation for students to use or promoted for at-home use. It can be downloaded from http://www.youcandealwithit.com/faas/default.html

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AES also developed a series of entertaining posters for posting on campus related to various aspects of student loans and finances. For example, the spring and fall 2002 posters included a series “If time is money, how come I have so much of one and not the other?”, “Bad credit is like a bad nickname, it will stick with you for years”, “Do something useful during your grace period, like paying back your student loan before interest kicks in”, and “Default on your student loan and watch good credit go bad”, all with eye-catching photos. (AES Default Aversion Information Sharing Session, Indianapolis, December 2002 found at http://www.fp.ed.gov/fp/attachments/activities_whatsnew/DA1202.ppt ) Default Prevention Approaches: After Students Leave School The U.S. Department of Education’s Ensuring Student Loan Repayment: A National Handbook of Best Practices (2005) outlines a number of strategies for schools to follow once students have graduated/withdrawn from full-time studies. It suggests that the best way to help dropouts become successful repayers is to encourage them to return to school to complete their programs by contacting them as soon as possible and finding out why they left school and what it would take to get them to re-enroll. They should be informed that they can defer their loans as long as they are enrolled. Since technical defaults can occur when students transfer to another institution and don’t notify the first school, it is suggested that schools may want to track transfer students. The importance of the school making early contact with borrowers during the grace period is mentioned. It is recommended that schools:

• contact borrowers immediately after they enter the grace period and several times during the grace period, to ensure they know about consolidation and other repayment options and the deadline for starting repayment;

• let students retain their school e-mail accounts for at least six months after

they leave school to provide a constant point of contact and a vehicle for the school to communicate with borrowers;

• use the grace period to set up an electronic payment agreement with the

borrower;

• encourage students to make payments during the grace period to help them become aware of the existence of loan payments in their budgets as they leave school and find jobs, and to reduce the total interest to be paid.

The Department of Education’s Sample Default and Management Plan (2005) describes two stages in providing assistance to delinquent borrowers. Early Stage Delinquency Assistance (ESDA) begins at the time of separation or

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early in the grace period, and is a highly-focused effort by lenders, guarantors and schools to assist borrowers who are at high risk of default to prepare for entry into loan repayment. In the case of borrowers who are at least 60 days delinquent, schools are advised to refer their former students to the default aversion assistance offered by guarantors and direct loan servicers. Late Stage Delinquency Assistance (LSDA) includes a number of techniques aimed at rescuing severely delinquent borrowers. It mainly involves the school making a series of phone calls, in some cases several a month, to inform their previous students who have become delinquent borrowers that there are options and help available. It is felt that students respond well to schools. Research has revealed that the average ‘percent rescued’ for LSDA programs ranges from 25% to 70%, with the overall average for various types of institutions being 36%. (Rorie and Pierson, “Reducing Delinquency & Default: How Schools Can Help” NASFAA Conference presentation, July 2005). This presentation includes a series of LSDA ‘tips for success’ for schools which include:

• using a light touch, remembering the goal is assistance, not collection; • calling at different times of the day; • mailing hand-written notes; • using contact information from several sources; • sending out information on repayment options, deferments and

forbearance; • connecting the student with the Loan Service Center in a three-way call.

Inter-relationship of Student Retention and Loan Repayment British Columbia has some significant research experience with students who are early leavers at provincial universities and colleges. The 2000 BC University Early Leavers Survey (Conway, University Presidents’ Council of British Columbia, 2001) reported that of every 100 students who start undergraduate studies, between 30 and 50 will leave prior to degree completion. Of the early leavers, over half attend another educational institution within 24 months of their departure. 59% of the leavers were ‘true leavers’ - those whose attrition was unplanned and permanent. Reasons given by true leavers for departing university:

• poor academic performance, including, but not limited to, the student being required to withdraw;

• inadequacy of financial resources to continue study;

• the decision (arrived at sometime after the commencement of study) to

transfer to another institution:

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• changes in personal or life circumstances, including illness and family obligations;

• the search for, or commencement of, employment;

• dissatisfaction with, or unavailability of, the academic program the student

was interested in. The B.C. College and Institute Short Stay Pilot Survey collected data on the outcomes of former students who left public colleges, university colleges and institutes after completing a relatively small number of courses - between 9 and 13 credits. When asked for their main reason for leaving, 23% of short stay students said they left early because they had completed their program, or completed courses they wanted or needed, in many cases, to transfer to another program or institution; 16% said they left for employment, and 11% said their main reason for leaving had to do with finances and affordability. 46% of the early leavers took some further studies. Given the research indicating that completion of studies is a major factor in student loan defaults, there has been growing interest in the relationship of student retention, loan repayment and financial literacy. USA Funds sponsored a symposium in February 2005 - Solving the Retention Puzzle: The Link Between Retention and Financial Literacy. (Coleman & Miller, 2005). The symposium summary categorized risk factors associated with students dropping out of college before completing their program into five categories: (1) academic; (2) personal; (3) life issues; (4) social; and (5) institutional. The Student Satisfaction Inventory (SSI), a tool for campus assessment of student experience that includes a section on financial literacy, allows institutions to capture both a satisfaction score and an importance score so they can identify the strengths and challenges of their institution and compare results to national scores. It recommends using student peer counsellors in a campus financial literacy program that includes:

• presentations in courses: • tables or booths at campus fairs and new student orientations • addressing staff meetings (such as housing coordinators, resident

assistants) • newspaper articles in school or community newspapers • flyers, on buses and bulletin boards

One of the public universities using the USA Funds Life Skills program as part of their financial literacy initiatives is Ohio State University. In a December 2005 web conference Using Financial Literacy Programs as a Student Retention Tool (Academic Impressions Web Conference, December 1, 2005), Tally Hart, Ohio State’s Director of Student Financial Aid, outlined ways to build financial

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literacy into existing campus offerings (e.g. combining with freshman survey classes, including as part of comprehensive first year experience classes, adding to student loan entrance counselling). She bases much of her approach on John Gardner’s work on the first year experience, particularly the identification of financial literary as one of seven competencies for freshman success and the research indicating that the third week of a student’s first term is a crucial time to address financial literacy issues with students. References to Gardner’s research can be found at http://www.sc.edu/fye/ . A very helpful resource on student retention is the website of the Center for the Study of College Student Retention (www.cscsr.org) Alan Seidman, Executive Director of the Center, proposes a retention formula for student success: Retention = Early Identification + (early & intensive & continuous) intervention Seidman bases his theory on the work of other key contributors to the student retention field, including Astin’s belief in ‘involvement’ as the cornerstone of retention (1985) and Witt and Handal’s ‘person - environment’ fit and the impact on satisfaction (1984). In a slide show included on the Center’s website, Seidman points out the central role of the financial aid office in student retention. He relates this to factors such as:

• the financial aid office is the second, and possibility the first in many instances, contact with the student in writing, through the web, telephone and/or in-person;

• it does many mailings to students; • it assists students’ ability to attend; • compared to other parts of the institution, it may have the most contact

with the student during his/her full post-secondary career; This analysis supports the key role of financial aid administrators in the retention of students.

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Improving Government Loan Repayments: Samples from B.C. Post-secondary Institutions

British Columbia Institute of Technology 1. Financial Aid Office

• As part of an outreach program to provide prospective students information on student assistance opportunities, has a financial aid advisor and information station at the bi-annual BCIT Open House, and at ‘Big Info Sessions’, both at the main Burnaby campus and when such sessions are offered at external locations.

• Presents special information sessions on student assistance options to

targeted groups (e.g. Trades Discovery classes and selected class intakes at Aviation and Marine campuses.)

• Presents group information sessions to give an overview on repayable

and non-repayable government and institutional student assistance to BCIT staff (e.g. Program Advisors).

• Publishes a ‘Student Financial Aid & Awards’ brochure, both in hard copy

and as a downloadable PDF file on the department website, that includes information on the importance of a financial plan, full-time and part-time government and institutional assistance (both repayable and non-repayable), scholarship/award search websites, and includes a budget worksheet.

• Maintains and keeps up-to-date a very extensive series of bulletin boards

on government loan programs and other types of government assistance, BCIT bursaries, entrance awards, and transfer awards.

• The financial aid and awards department website presents information on

full-time and part-time government and institutional assistance (both repayable and non-repayable) and includes information on student loan repayment. It includes contact information on the National Student Loan Service Centre and the B.C. Student Loan Service Bureau, as well as a link to CanLearn’s Student Financial Planner and the University College of the Fraser Valley’s ‘Comprehensive Financial Planner’. It also includes downloadable forms for students to apply for BCIT assistance.

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• Two student use computers are located in the financial aid and awards reception/resource area to allow access to the web for financial assistance information, to apply for government assistance on-line and to access forms for applying for institutional assistance.

• Communicates with students through student intranet e-mail messages,

targeted to announce important developments such as award and bursary deadlines.

• Has used the back of washroom doors to communicate award deadlines

to a captive audience.

• Offers both BCIT emergency loans and emergency bursaries to assist students survive financial crises, that in some cases might otherwise mean they may have to withdraw from courses or their program.

• Has developed system reports to identify student withdrawals on a timely

basis, with front-line team staff and/or financial aid advisors following up in selected cases to alert students to the implications of dropping their course load.

2. Other student support services

• Student Services departments (including Student Financial Aid & Awards, Apprentice Services, Counselling & Student Development, Disability Resource Centre, Aboriginal Services and Student Housing) work in a coordinated manner, using inter-departmental referrals when appropriate to assist students deal with problems impacting their studies.

• Student Services departments set up information tables at a ‘Student

Services Day’ each year in the fall.

• The Counselling & Student Development department offers ‘BCIT Preparation and Early Orientation’ courses, with topics including factors contributing to student success, study skills, time management and accessing support and assistance at BCIT. The ‘Student Financial Aid & Awards’ brochure is distributed to participants.

• The BCIT ‘Learning for Success’ program offers a student success course

that is part of the Engineering Technology Entry programs. Topics include learning styles, study skills, time management and how to access Institute resources.

Camosun College, Victoria

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1. Financial Aid Office

• Emergency Bursaries are used to retain students in financial crisis.


• Students in Associate Degree and Business Diploma programs are required to complete Personal Learning Plans (PLP’s) and meet with academic advisors to clarify their objectives. While it is planned that all university transfer students will need PLP’s, discussions are also underway to require all college students to do one.

• The focus of the college’s student service departments is to

educate students and assist them in acquiring the skills needed to be more self-reliant. A handbook is provided to new students ‘At Your Service: A Guide to Student Services for Students’, which gives a brief description of each service, hours of operation, contact information and webpage address.

• As a result of an effective system of inter-departmental referrals, a

significant number of students have been prevented from dropping out. Students reporting to Financial Aid & Awards wanting to withdraw from a class or program are frequently referred to an academic advisor, a counselor, or, if appropriate, to the Disability Resource Centre. Similarly, students who tell an academic advisor they are withdrawing for financial reasons are referred to Financial Aid & Awards. Faculty refer students to student services for a variety of reasons, including students at risk of withdrawing.

Capilano College, North Vancouver


• Proposing to develop a pop-up box such that when a student goes to withdraw on-line, the pop-up advises them to contact the financial aid office to find out about the implications of their withdrawal.

• Considering the establishment of a Banner report generated on a

daily basis, identifying those BCSAP recipients who drop below a 60% course load (40% for students with documented permanent disabilities); with planned follow-up with students to inform them of the loss of their funding eligibility, with the hope of some re-registering to maintain eligibility.

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• As a way to limit overawards (and hence prevent potential defaults in students’ graduating year) starting with the 2006/07 year, will not allow Business and University Transfer students to apply for BCSAP in an educational period that includes the fall, spring and summer terms.

College of the Rockies, Cranbrook


• While college students in general are not allowed to withdraw completely without first speaking to a Financial Assistance Advisor, BCSAP recipients require the approval of the FAO to either withdraw from courses or withdraw completely. Such students are advised of their loan repayment obligations, CSL/BCSL overawards, tuition refunds, the successful completion/withdrawal policy and debt management tools.

• As part of the financial assistance advising process, students are

able to access information and assistance regarding student loan repayment, including federal and provincial debt management tools.

• Spring financial assistance workshops are delivered to regional

high schools. • “Debt Free Graduate” books are distributed at Orientation Day • Error/omission class lists are distributed after the term’s stable

enrolment date to ensure all class lists are accurate. Students who appear on the list but are not attending are contacted and advised of the impact their non-attendance will have on their program success and eligibility for financial assistance.

• When students exit early or complete prior to the end of their

funded term, the FAO is notified to ensure any tuition refunds are distributed appropriately to CSL/BCSL service providers.


• Among college policies that have a positive effect on retention/completion rates of student loan recipients are: vocational student attendance policies; and admission requirements to ensure only qualified students/those sufficiently prepared are admitted.

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• Future initiative: Essential Skills for College Success (ESCS 100), a course designed to increase students’ academic success and enhance both the students’ college experience and future employability. Consists of five modules; basic computer use, thinking skills, writing skills, research skills and keyboarding skills.

• Future initiative: Implementation of a degree audit program to allow

students to track their education plan, monitor their own progress and allow for intervention by student services if they stray from their education plan.

Douglas College, New Westminster


• Continue to offer financial aid sessions to assist students understand the loan program, but attendance has dropped off. Historically offered in the summer and less frequently throughout the year, to help students with the application process and to provide information on (a) institutional funding (scholarships, awards, bursaries, fee deferrals, emergency loans); (b) confirmation of enrolment forms need to keep loans in good standing; (c) loan repayment when they leave full-time study; (d) the effect of default on credit rating; (e) programs available to assist them if they run into financial difficulty while in repayment; and (f) other student services available at the College.

• Two student-use computers in the financial aid office for students to

apply on-line for their student loan and to access web resources, which encourages them to ask questions if they don’t understand something.

• A financial aid website with information on program costs, financial

aid programs, awards, scholarships, bursaries and links to other resources, including CanLearn’s Loan Repayment Calculator. In the summer 2006, there are plans to add an electronic award application.

• In co-operation with the college’s Communications and Marketing

Office, has developed a brochure ‘How to pay for college and not break the bank’ and a new entrance scholarship application.

• Participates in Open House and Student Orientations.

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• Communicates with students through e-mail ([email protected]), bulletins through mydouglas.bc.ca, as well as telephone and in-person enquiries.

• Takes part in Student Success 1100 classes. (see below). The

financial aid office offers a two-hour interactive presentation ‘Financing a College Education’, in which students ask questions about student loans, are given a free copy of ‘The Debt Free Graduate’ and encouraged to think about alternative resources. All participants receive a folder with federal and provincial brochures including ‘Canada Student Loans for Full-time Students - Investing in Your Future’. A sample loan amortization table is included that illustrates the cost of borrowing student loans depending on the amount borrowed, interest rate and amortization. Students are encouraged to use www.canlearn.ca for financial planning to calculate different scenarios for loan repayment.

• Free copies of the “Debt-free Graduate” are available at the

financial aid office and through events such as orientation. • When confirming enrolment for student loans, for students not

confirmed through the automated ECE process, if it is noticed that a student is not enrolled full-time, they are contacted to remind them of the minimum course load required and to inform them of options such as part-time and upgrading funding.

• Gift certificates to Safeway are used in emergencies if a student is

clearly out of money for food or transportation. Some of the general bursary funds are used to help students in crisis with unexpected expenses.

• Students are referred by the financial aid office to other student

support services as needed, to help the student stay in school, or to help them plan for a return to school if they need to take time out.


• An on-line student orientation was added to the college website in

the summer 2004: http://www.douglas.bc.ca/new-students/student-orientation/

• An in-person orientation was re-introduced in the summer 2005. • Student Success STSU 1100, Introduction to College Studies (3

credits) is designed to help students develop the skills, knowledge and habits necessary to make a successful transition to post-

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secondary education. It includes components on study skills, writing a college-level research paper, library research, critical thinking, personal and career planning, and transferring to other institutions.

• STSU 1100 will be offered to high school students in 2006/07 on a

co-credit basis (students will get both high school and college credit) to demystify the college and help students get the skills they will need in post-secondary education.

• A Student Services Open House is held every fall semester to

introduce students to services available at the college. • A new English requirement was introduced in the fall 2004 to

ensure all students have the skills needed to be successful in their courses.

• An Office of New Students, approved for September 2006, will

facilitate the transition of new students to the college and their retention into second year and beyond.

Emily Carr Institute, Vancouver


• Students on assistance that withdraw from the Institute are required to see the Financial Awards Office before the Registrar’s Office will remove them from classes. Such students are coached through various repayment requirements and options.

• A bi-weekly report is produced identifying students who have

dropped below a 60% course load. The students are contacted and advised of the loan implications of a reduced course load, with the result that some students return to the 60% level.


• Faculty members issue a warning slip if a student appears to be heading towards a failing grade (for non-attendance or other reasons), which usually means they are referred for academic counselling, disability assistance, writing centre assistance etc., which in turn results in a referral to the Financial Awards Office if the student reveals they are on student assistance or in financial difficulty. In the case of students who receive several warning slips for non-attendance, the Records Office passes the information on to the Financial Awards Office so that student loan recipients can

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be contacted by phone to remind them of the requirement to attend classes for continued student loan eligibility, and to remind them of repayment obligations and options.

Institute of Indigenous Government, Burnaby


• Identifies students who drop below a full course load and discuss the implications of dropping below full-time before they complete the paperwork.

• Students who want to withdraw from their program must do so with

the financial aid office.

• Students who are identified by faculty for non-attendance or potential failing grades are contacted by the financial aid office to discuss possible solutions.

Justice Institute of B.C., New Westminster


• Since all BCSAP-funded students must study at the 100% course load level, it is easy to identify those who drop below 60% - students are either in the program or not.

• A new bursary program has been introduced that provides

additional non-loan options for students. See (http://www.jibc.bc.ca/studentservices/bursaries/bursaries.htm)


• Rigorous admission requirements, plus the small class sizes and low instructor/student ratios, allow ‘at risk’ students to be easily identified and monitored.

• Introduction of eight remedial/reading and review days adjacent to

critical exam points in a program to reduce the withdrawal rate. • As indicated in the College and Institute Student Outcomes Survey,

Institute graduates show strong employment and earning outcomes, which should result in a direct correlation to the graduates’ ability to repay their student loans.

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Langara College, Vancouver


• Interviews students who are thinking of withdrawing from classes to encourage them not to withdraw. Implications of dropping below a 60% course load are discussed, and appropriate remedial measures are identified (e.g. use of tutors, meeting with instructors, referral to the Writing Centre).

• Plans to introduce Financial Literacy workshops.


• The Counselling Department offers success workshops that include topics such as study skills and time management.

• Many departments follow up on students who do not attend, to

determine how they might be assisted to complete their program. • While previous policy required students placed on Academic

Suspension (after a semester on Academic Probation) to sit out a full year before returning to studies at the college, a new success program has been implemented that allows a student, in the first semester of absence, to meet with a counsellor and have an assessment of needs for retention. The student and the counsellor develop a plan for success, signed by both parties, which obligates the college to offer remedial assistance where necessary. The student can thus return to studies after only one semester out.

• The timeline for provision of information on the college offerings

and timetables has been moved up, to allow students to plan their studies and timetables early and thereby commit to a full program of study.

Malaspina University College, Nanaimo


• Reports are run regularly that identify students who have dropped below 60%. Such students are contacted by phone or e-mail to discuss the implications.

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North Island College, Courtenay/Comox


• Reports are generated bi-weekly to identify students who have dropped below 60%. It is planned to have e-mails sent to such students and to have an exit survey for students dropping on-line, asking them if they have a student loan, and if so, referring them to the Financial Aid Office.

• The Financial Aid Office talks to all students that withdraw and

advises them of their responsibilities and options. • Two ‘plain language’ brochures are planned: (a) the first is to be

sent to the student after they receive their loan, will include information on a student’s responsibilities, maintaining the minimum course load, plus contact information for the college’s FAO’s and the Ministry of Advanced Education contacts; and (b) the second, to be sent at the end of the student’s last funded semester or when they withdraw, will advise the student of consolidation and options available if they can’t repay.


• Counsellors and educational advisors try to direct ‘at risk’ students to the Financial Aid office.

Okanagan College, Kelowna


• Attends numerous recruitment sessions (info nights) throughout the year and dispenses financial aid information, including copies of the ‘Debt free Graduate’ and the recent version of the CanLearn booklet.

• Takes part in first year student orientation (see below).

• Emergency funding (loans and bursaries) is provided to students

who have a financial roadblock that may necessitate withdrawal if not dealt with.

• Co-ordinates student supports within the institution, e.g. if a student

needs major motor vehicle repairs because they travel to school

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daily from Penticton to Kelowna for classes, the Financial Aid office might link them up with the College’s Auto Service department and give them an emergency bursary, with the Auto Service department providing free labour,

• Encourages students to use the CanLearn website for financial

planning and to calculate loan repayment scenarios.

• Provides one-on-one interviews at a student’s request (usually when they are about to graduate), to discuss their accumulated debt load, how to go about repaying their student loans, and debt management tools.

• Helps students navigate debt management tools or repayment

processes when they receive notice of student loan consolidation and don’t know what the document means or can’t start paying and what to know what their options are.

• Helps students to reinstate previously defaulted loans to put them

back in good standing so they can access debt management tools and additional funding in order to complete their studies.


• ‘College 101’, a new 1 ½ to 2-hour evening information session for parents and students (of all ages), includes an overview of admission requirements and processes, plus information on B.C. Student Assistance, scholarships, bursaries and how to navigate the financial aid website to search for awards.

• First year student orientation includes student success initiatives,

encourages students to engage with each other and their professors to build a sense of community, and includes presentations by all student support providers on campus to let students know where they can get help if they need it.

• Learning Centres are located at all campuses where students are

provided with assistance in English, Math and Science on a drop-in basis. Teaching Assistants run Accounting Study Halls for domestic and international students.

• The Registrar notifies the Deans of Faculties prior to de-registration

of students for non-payment of fees. The Deans then speak to the students, sometimes uncover underlying personal or financial reasons for not paying tuition and then refer them to the student support providers at the institution.

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• The Employment Services Office helps students with resumes and

finding jobs.

• The counselling department is planning to establish a student success program at the beginning of each term starting with the 06/07 year.

Royal Roads University, Victoria


• Visits each loan-eligible program that is nearing completion, to explain the repayment process and the importance of keeping a student loan in good standing. Also included are handouts of lender contact information and instructions of how to update one’s address with all lenders they’ve dealt with. The Financial Aid Advisor includes their contact information and invites them to call them anytime if they have further questions.

• The FAO is a staff member of the University Life office, such that

for each program intake, they visit the classes and introduce their role. They then take the students on a campus tour. Students are more willing to seek help from someone when they have seen them in a relaxed, social setting.

• Since the non-traditional term system results in tuition installments

that do not coincide with the student loan disbursement schedule, the FAO works closely with Finance to ensure that student loan recipients are not penalized due to late payments and that, in some cases, to allow for personalized payment plans to be put in place to fit the loan disbursement schedule.

Selkirk College, Castlegar


• Scholarships and bursaries assist in supporting student success,

particularly helping high need students pay for basic educational and living expenses.


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• Peer tutors, supervised through the College’s Student Access and Support Department, are hired under the work study program to help students who are struggling with their studies.

• Disability Advisors assist students with learning disabilities in

accessing equipment or other tools helpful to their success. Simon Fraser University


• Due to the close connection with Student Advising and Student Records, the Financial Aid Office is provided a list of students required to withdraw. These students receive an e-mail and a letter, but are not required to see a Financial Aid Advisor as part of the process.

• Some withdrawing students are given information through one-on-

one advising. General topics include important dates the student should know about for repayment and information on other assistance programs. If a student is in good standing and drops below the 60% course load level, there is no specific outreach carried out.

• Regular ‘unsuccessful semester’ reports are generated for BCSAP

recipients. • Communicates with those about to graduate via e-mail and/or the

Financial Aid department website, to assist them in understanding the expectations for repayment and the consequences of default.


• Special programs are run for students on academic probation, as

well as for those required to withdraw from the University. • General awareness-building of support services that increases

retention and student success. For example, all services offered by Student Services and the faculties as well as services offered to students by paraprofessionals (e.g. peer educators, student learning commons.)

Thompson Rivers University, Kamloops

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• Tracking withdrawals, and following up with faculty re attendance problems.

• Does presentations on ‘Financing Your Education’ for high school

students and parents. Trinity Western University, Langley


• Uses loan repayment materials available from US organizations, customizing their discussion for Canadian students.

• Planning to implement an on-line exit counselling process for Canadian

students, using a US process that already exits. • Fact that tuition is very expensive means that students do careful

planning before they attend. 2. Other student support services

• The university’s Student Life department has an extensive retention program that involves Financial Aid.

• All students are required to take University 101.

University College of the Fraser Valley, Abbotsford


• Students have a strong relationship with frontline staff and often return to discuss interest relief options.

• The ‘Comprehensive Financial Planning Workbook’, available at:

http://www.ucfv.bc.ca/future/cfpe/CFPE.htm , was developed to decrease the amount of student loans required by students and to increase their financial assistance awareness. Students are referred to this resource on a regular basis. e.g. those accessing the college financial aid website. Numerous references to the publication are made on the general college website.

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• At Orientation each year, students are given a complementary copy of the ‘Debt Free Graduate’ and encouraged to read it.

• Students are monitored on a weekly basis for 60% course load. When

they fall below the 60% required course load, Financial Aid Office staff contact them by phone or e-mail to advise them of the financial consequences of dropping classes. Often students re-enroll when they still have a good chance of successful completion. This process builds a strong relationship and students remain in close contact with the Financial Aid Office when making decisions that will affect them negatively.

• Institutional bursaries have been developed to assist the neediest

students meet some of their need unmet by the student loan program.


• The Financial Aid Office has a close relationship with Educational Advising, Counselling and Disability Services, and when students need these resources to be successful referrals are quickly made. Financial concerns expressed by students to staff in these other support areas are also quickly referred to Financial Aid.

• The Student Union Society has developed a very close relationship

with Financial Aid through the emergency funds they raise to assist students in crisis, who would otherwise be unable to complete their studies. Financial Aid administers these funds.

• When the provincial work study program was terminated, the college

developed a work study program open to all students. Students are able to work on campus, allowing them flexible hours to fit around classes and an opportunity to have experience related to their field of interest. Work study positions connect students to the college and faculty, creating a sense of community and a commitment to program completion.

• Retention issues have become an area of interest for faculty and

administration, which will result in greater completion and thus decreased default rates.

• Counsellors continually run student success workshops on study skills. • Student life activities have increased to encourage engagement with

other students and the school. Activities such as Orientation, Intramurals, and the Leadership Institute have been successful in bringing students together and keeping them to program completion.

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The University of British Columbia, Vancouver


• Presented by UBC’s Financial Aid & Awards in conjunction with the National Student Loan Service Centre, Exit Workshops are offered to students who are graduating. They provide information on how to handle their student loans after graduation and options if they are not able to repay.

• Workshops on student loans are presented to Faculty and Staff. • Workshops are delivered at orientations. • When students’ course registration drops below the required level, e-

mail notifications are sent to them prior to the university withdrawing their loan eligibility.


• The university offers ‘Imagine UBC’, plus Student Success and Student Leadership Programs.

The University of Northern British Columbia, Prince George


• Reports are generated by the financial aid office on a regular basis that identify students who drop below the 60% (‘full-time’) course load.

• The drop/add form advises students to consult with the financial aid

office if they are receiving student loan funding and are dropping classes.

• The financial aid office follows up on students (on student assistance)

who have been identified by faculty for non-attendance or heading towards failing grades.

• The financial aid office refers students they consider ‘at risk’ of

withdrawing and/or failing to other support services to assist them stay in school and/or plan to return to school after time out.


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• Financial aid & awards presentations are part of Orientation. • Financial assistance information is provided to prospective students by

University Liaison staff during visits to high schools. • Students placed on academic probation have the option of returning

earlier than the normal ‘one year out’, by submitting an appeal. The student may be referred to counselling or other services as a condition of granting the appeal.

University of Victoria 1. Financial Aid Office

• Student Awards and Financial Aid presentations are included as part of all student orientation programs.

• Offers bursary, work study and emergency loan programs that assist in

the retention of students in the margins.

• Reports are generated by the SAFA office on a weekly basis that identify students who drop below a 60% course loan or 40% for students with disabilities.

• Phones students who drop below their required course load to inform

them of the implications on their student assistance. As a result, it is often discovered that the student is concurrently enrolled at UVic and another institution or has dropped below a full course loan for medical reasons. The students can be advised of split enrolment and/or appeal policies and procedures to keep their loan in good standing.

• Refers students considered ‘at risk’ of withdrawing and/or failing to

other support services (e.g. Counselling Services, Health Services) to assist them to stay in school or withdraw from studies with medical approval.

• SAFA is included in the Grad Year Orientation program to provide

students with information about the repayment options available prior to their departure from the University.

• SAFA presentations are offered throughout the year at the Student

Transitions Centre on campus.

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• Copies of ‘The Debt-free Graduate’ are distributed by SAFA at all parent and student orientation sessions.


• Orientation programs are offered for both new and transfer students,

and for parents. Vancouver Community College


• Generates reports twice monthly that identify students who drop below the 60% (‘full-time’) course load level or who withdraw.

• In some situations, the financial aid office contacts students who drop

their course loads below ‘full-time’, to inform them of the implications for their student assistance.

• The financial aid office follows-up on students with student assistance

who have been identified by faculty for non-attendance or heading towards failing grades.


withdrawing and/or failing to other support services such as counselling. In some cases, students are referred to take Math or English upgrading either concurrently or before resuming post-secondary studies. Financial aid works with students who need to ‘insert’ back into advanced levels of a program to complete their credential.

• Students are encouraged to use the www.bcsap.bc.ca website for

financial planning and to review repayment scenarios. 2. Other student support services

• Financial assistance information is provided by the college’s Community

Liaison staff members. • Information on topics such as loan repayment and interest relief is

distributed at events such as the College Information Night and New Student Orientation.

• There is a plan to resume the practice of having financial aid staff visit

individual classes during the first Orientation weeks of classes in

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September, to provide information on student loans and financial assistance.

• Non-credit (‘Ready, Set, Go’) Student Success courses are offered. • Financial Aid works closely with the Disability Services Advisor to assist

students and ensure that they are aware of financial assistance opportunities.

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Improving Government Loan Repayments: Selected Canadian Post-secondary Institutions

Acadia University, Wolfville, Nova Scotia 1. Financial Aid Office

• A campus-wide Financial Literacy program is being developed, with the objective of improving the knowledge base of students and parents to ensure they are aware of what needs to be done re financing the student’s education.

Algonquin College, Ottawa, Ontario 1. Financial Aid Office

• Distributes the brochure ‘OSAP Repayment’ which covers when and how to repay student loans, trouble encountered in repaying loans, revision of terms for those having trouble repaying due to unemployment or low income, returning to school with outstanding loans, what happens if loans are repaid, and the availability of non-profit credit counselling.

• Gives information sessions to Business classes as part of their Student

Success class.

• Along with other student services (see below), sets up an information kiosk twice a year, handing out brochures about OSAP and the repayment brochure as well.

• When students withdrawing in person are referred by the Registrar’s

Office (see below), they are counselled re their responsibilities related to their loans, and provided a copy of the ‘OSAP Repayment’ brochure.

• Students withdrawing on-line are sent a repayment information sheet.

• Twice a year the National Student Loan Service Centre presents Loan

Repayment seminars, advertised via the College’s student e-mail account info board, as well as flyers posted all over campus. This year an ad will be placed in the College newspaper run by students, with an accompanying article about the seminar written by a student.


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• The Registrar’s Office requires students approaching them in person to withdraw to have a form signed by the Financial Aid office.

• Student Services departments (e.g. Counselling, Employment Services)

together with Academic departments, promote student retention throughout the year. Twice a year student services departments put up kiosks in high traffic areas to provide information to students.

Brock University, St. Catherines, Ontario


• In order to establish a relationship with the Student Awards and Financial Aid office prior to admission, applicants are e-mailed the name and e-mail address of their financial aid officer, with instructions on how to apply for government student loans and relevant financial aid at the university.

• During orientation (and just before government loan pickup), Student

Awards and Financial Aid has ‘mandatory’ information sessions for first-time borrowers which provide targeted information on their loan and begin to develop financial literacy regarding budgeting, money management, credit etc.

• A regular e-mail communication strategy is in place to inform OSAP

applicants of deadlines and other issues regarding their loan (e.g. students who aren’t applying for a government loan but have loans from the past are reminded to apply for interest-free status.)

• Annual student loan repayment seminars are presented by the National

Student Loan Service Centre and promoted by the Student Awards and Financial Aid office. Targeted e-mail invitations to sessions held on campus are sent to graduating students requesting RSVP’s.


• The university has a Retention Committee which designs and coordinates retention initiatives, with membership including the Director of Student Awards and Financial Aid.

• Financial Peer Assistants offer one-on-one or group assistance on

budgeting, money management and credit, working with Residence Life staff and Health Services.

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• All students who leave the university are requested to complete an Exit Survey, asking about the issues driving the decision to leave. Next year the survey is being expanded to students who do not return.

Canadian University College, Lacombe, Alberta 1. Financial Aid Office

• All graduating seniors are personally contacted prior to April commencement with information regarding ‘what happens to loans now’, a one-page letter that includes contact numbers for the National Student Loan Service Centre. Included is a brochure that discusses options and programs such as Interest Relief and gives contact numbers for those programs. As a result, the Financial Aid office receives calls in the fall from grads asking ‘what was it you told us last spring?’

• Information about loans, repayment options and links are on the

institutional website.

• Course withdrawal forms require a signature from Student Finance/Financial Aid, so that students are informed about the need to maintain a 60% course and the implications for college scholarships.

• Students on US government aid are required to complete the on-line

entrance counselling and are advised about on-line exit counselling. Canadore College, North Bay, Ontario 1. Financial Aid Office

• Presents one portion of the ‘Beat the Rush’ program (see below), including having participants do an on-line budget exercise and referring them to the Financial Aid office to pick up information on loans and repayment. Students who complete the budget portion of Beat the Rush are issued a gold card which allows the student into a fast-track line to pick up their loan documents on the first day of term.


• The College’s Campus Life department coordinates four ‘Beat the Rush’ sessions each summer to provide new and returning students information on services such as Registrar’s Office, Financial Aid, Special Needs, and Athletics.

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Durham College and the University of Ontario Institute of Technology, Oshawa, Ontario 1. Financial Aid Office

• Confirmation of Enrolment signing is done in mandatory group sessions (around 30 students each) during which emphasis is placed on the importance of repaying OSAP student loans, the consequences of default, repayment options and programs in place if students end up not being employed at repayment time. Students are given advice on creating and sticking to a budget to be successful. A cardboard folder is distributed (see below). After the first three weeks of classes, documents are then distributed in one-on-one appointments.

• The cardboard folder issued to students includes the following inserted in

it: (a) a four-page summary of financial aid and awards programs, including information about the OSAP process, loan repayment, Interest Relief, and the importance of keeping lenders updated; (b) an OSAP repayment Q & A brochure, which includes important contacts such as the CanLearn website, Durham’s Financial Aid & Awards office and bank student loan 1-800 numbers; (c) a student loan summary form where students are encouraged to record the details of each loan they receive, with details on how much borrowed, when, how much of it will be issued to the school and how much remains for the student; and (d) a budget sheet. Students are advised to use the folder to store all copies of each loan document and be sure they have all the information they need at graduation to stay organized financially.

• Arranges for Lender representatives to come on campus to provide

repayment information, with door prizes to encourage attendance.

• Takes advantage of every personal contact with students to emphasize the importance of repayment and the consequences of default.

• Has sufficient bursary funding to help students who may otherwise have to

withdraw due to financial hardships.

• Makes sure every OSAP recipient receives a copy of the OSAP Repayment brochure at graduation.

Laurentian University, Sudbury, Ontario


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• Offers repayment seminars for students in late winter each year.

• Every student who withdraws from full-time studies is sent information on their loan repayment obligations.

• Loan repayment information is sent to every student who applies to

graduate. 2. Other student support services

• An ‘Introduction to University’ program is offered for students who don’t quite meet the entrance requirements. They are allowed to register in 60% of a full course load, must take non-credit courses in areas such as study skills, and are monitored closely to ensure they receive the support they need to succeed.

• A mentoring and support program which is offered to students who

experience academic difficulties in their first year has proven to be very effective in keeping students in post-secondary.

McMaster University, Hamilton, Ontario 1. Financial Aid Office

• Informs students of the implications of dropping courses through the intranet McMaster University Gateway to Student Information (MUGSI), and at the time of loan pick-up.

• Has offered loan repayment sessions targeted to upper level

students/those close to graduation, in cooperation with the regional representative of the National Student Loan Service Centre. Student participants are given a booklet ‘Information for Graduating Students’ as well as FAQ sheet (how do I repay my loan? what if I don’t secure a job? etc.)

• Has held budgeting workshops as a way of showing students that making

wise decisions in their spending now can save them a substantial amount of money in interest payments later.

• The department website http://sfas.mcmaster.ca/ includes an interactive

‘Budget Builder’. Coming soon is a budgeting game, intended to be a real eye-opener to spending and an influence on student spending habits.


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• The Centre for Student Development offers services to help students with academic skills, personal counselling services to students with disabilities and a peer helper program.

• Each faculty office provides students with guidance through the help of a

student advisor who provides assistance with course choices and direction.

Ontario College of Art and Design, Toronto, Ontario 1. Financial Aid Office

• Implementing a series of information sessions on financial aid issues throughout the year, including having the National Student Loan Service Centre on site to deliver repayment seminars. Information sessions are promoted via the web, e-mail (general and targeted), campus communications, posters, and the most effective - telephone campaigns, including calls to recent graduates to invite them to participate.

• Mandatory one-on-one debt management counselling was developed for

inter-session students, who tend to be the College’s students with the highest debt risk. These were extremely successful in helping students understand how they accumulated their debt, their loan responsibilities, and various strategies for repayment. Often after these sessions, students moved away from their reliance on student loans and self-funded for the remainder of their studies. (Note that this mandatory counselling is no longer offered since the preparation and the sessions themselves were labour intensive and lengthy and proved to be unmanageable as a strategy.)

• Detailed information is included in withdrawal letters regarding debt

management responsibilities and resources.

• Targeted e-mail is sent to recent grads, providing basic information and inviting them to come back on campus for one-on-one advising or to attend info sessions.


• The development of alumni services and communications, as well as enhanced academic counselling and career advising support, is anticipated to improve student satisfaction and engagement. It is hoped that these initiatives will have an indirect (and positive) impact on student loan repayment.

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Queens University, Kingston, Ontario 1. Financial Aid Office

• The publication ‘Financing Your Queen’s Education’ is sent to students with their offer of admission. Such information is provided to Arts and Science students as part of their orientation.

• When students obtain their government assistance, they are provided with

an information sheet re what to consider in relation to government assistance.

• Borrowers who cease to maintain the appropriate course load required for

government assistance are sent a letter informing them of their status and encouraging them to contact the National Student Loan Service Centre.

• At least two Awards Office staff are available each business day to

conduct ‘financial advising’ sessions, with residence dons encouraged to contact the Awards Office to arrange these sessions. (Note: most first year students are living in residence.)

• The Queens Awards office has hosted two professional development

sessions for Awards Officers, with the focus on how to be effective in financial advising sessions with students.

• Participates with the AMS/student government in a ‘Financial Aid

Awareness’ week, during which sessions are held on financing a Queen’s education.


• The Faculty of Applied Science offers spring sessions to students who are struggling, with the aim of helping them to successfully complete first year and better prepare for the second year.

• Academic Advisors remind students that if they drop a course and are

loan borrowers, they should contact the Student Awards Office. Red Deer College, Red Deer, Alberta 1. Financial Aid Office

• An Edulinx representative visits the campus in March each year and meets with students to talk about consolidation of student loans. A table is

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set up in a visible area of the college, with good signage, and students stop and ask questions.

• An information sheet with details about loan consolidation is given to

students along with their graduation credential if they have had government student funding.

• Information about consolidation is published in the bi-weekly student

newspaper in March.

• The Registrar and Coordinator of Student Funding and Awards meet with the chairpersons of programs that show high default rates to discuss strategies for informing students about their responsibilities with student loans.

Sheridan Institute of Technology and Advanced Learning, Oakville, Ontario 1. Financial Aid Office

• At loan pick-up time each year, each student who is receiving a loan is provided with a 3-page information package which includes information from (a) the Ministry of Training, Colleges and Universities, including contact information for assistance; and (b) Sheridan, which details where and how the student loan funding is to be directed (i.e. towards tuition fees and other education-related costs) and directions to contact the Financial Aid office if there is any change to the student’s personal circumstances (program change, withdrawal, reduction in course load, marital status, financial status, residence change, etc.) The package also outlines the consequences of failing to meet these obligations.

• Communicates with all students who have been placed under academic

progression warning status to ensure that they are aware of the requirements to continue their eligibility for student loan funding. All students who have been flagged with this status are checked to ensure they have fulfilled the academic requirements to retain their student loan eligibility.

• When a student has been identified as having academic progression

issues, a one-on-one interview is initiated to ensure the student is aware that a program withdrawal or reduction is course load (below 60%) will put the student into loan repayment status in six months.

• Hosts ‘Loan Repayment Seminars’ given by Edulinx on an annual basis.

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• A healthy financial bursary program is intended to help students who have financial need. In addition to providing funding for students ineligible for government loan assistance, bursaries can also be used by the student to repay student loan overpayment or to make monthly loan repayments while they are still in school.

• A Sheridan work/study program is in place for students who do not qualify

for the provincially-funded work study program, to assist them with education and living costs and/or help them make monthly loan repayments or cover loan overpayments while they are still in school.

University of New Brunswick, Fredericton 1. Financial Aid Office

• Budgeting 1001 Workshops are offered to first year students to increase awareness of all financial options. Comedy skits are also used with first year students to provide a fun, interactive way to provide information.

• The financial aid office website includes a sample budget and budget

worksheet, Edulinx Government Student Loan Repayment Information, a student debt fact sheet, information on ‘Assessing Your Net Worth: Living on Your Own After Graduation’ and a link to the CanLearn website. http:www.unbf.ca/studentservices/departments/finaid/

• Repayment seminars offered two or three per year, with direct e-mail sent

to graduating students inviting them to the seminar. Handouts, which include information on Interest Relief, Debt Reduction in Repayment, as well as provincial resources, are sent to those students who do not attend. Individual appointments are given to students who require more personalized information.

• A handbook developed by the Fredericton campus financial aid office is

provided to U.S. students, with repayment strategies reviewed one-on-one if requested.

University of Ottawa, Ontario 1. Financial Aid Office

• Hosts loan repayment sessions given by representatives of the National Student Loan Service Centre, publicized on campus and via e-mails to fourth year students.

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• Financial Counsellors are available on a daily basis to meet with students, assisting them with their budgets and informing them of the impact of debts during and after their studies.


• The university has several programs to help students succeed in their studies and complete their academic goals, including University 101, study skills counselling, writing help and resources and a student mentoring centre.

University of Toronto, Ontario 1. Financial Aid Office

• An information sheet is mailed to students who have withdrawn or reduced their course load to make them aware of loan repayment, interest relief, return to classes, and updating their address.

• A National Student Loan Service Centre representative comes on campus

to do workshops on Repaying Your Student Loans. It is advertised as ‘Including Tips on Saving Yourself Money.’

• The Financial Aid office website has detailed information about repayment

of student loans: http://www.adm.utoronto.ca/fa/counselling/loan_repayjment.htm

• E-mail reminders are sent to students about keeping their previous

student loans interest-free if they are not continuing to borrow.

• Institutional funds assist students who might otherwise have to withdraw due to financial reasons.

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Improving Government Loan Repayments: Provincial/Territorial Governments

Alberta

• Currently in the preliminary stages of developing a Loan Repayment Communication Strategy intended to educate students on loan repayment as well as debt management tools (Interest Relief and Revision of Terms). A number of communication tools are being explored, including different channels of communications: (a) direct to students via phone calls, Inter-active Voice Response (IVR) messaging, e-mail messaging and letters at different points throughout their loan lifecycle; (b) improved communications to students in their educational institutions (e.g. posters); (c) improved communications to financial aid administrators to assist in educating themselves and students.

• Has an extranet site that all registered educational institutions can access

for information on student assistance. The documents approved under the Pan Canadian Designation Policy Framework (the framework itself, plus the Best Practices Guidelines) are being added to the site.

• Offers module-based training to educational institutions in various aspects

of student loans. The addition of a training module relating to default prevention strategies is being explored.

• In August 2005 introduced self-serve web-based entrance and exit

counselling sessions as a default prevention strategy through their service provider Edulinx. Within the context of their communication strategy will be working on promoting the use of these tools.

• Alberta’s service provider Edulinx offers Repayment Preparation Seminars

in educational institutions.

• Has numerous guides distributed and available to students and parents which range from planning for post-secondary to exiting post-secondary. The guides are available on the Alberta Learning Information Site (ALIS) at: http://www.alis.gov.ab.ca/studentsfinance/prepare.asp

• Guides to educate students and parents about planning for post-

secondary include PowerPoint presentations (with instructor’s notes).

• Mails an Exit Guide to all students in their final year of study. The Exit Guide, which describes strategies for paying back a student loan, can be found at: http://www.alis.gov.ab.ca/pdf/studentsfinance/exit.pdf

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• As of August 31, 2006, a self-service website will be available to allow students to manage their loan on their own by revising the terms of loan, including changing their payment amount, the loan term (how long they will take to repay the loan), and/or the payment date.

• During 2006/07, a communication strategy will be put in place to educate

students about loan repayment and debt management tools, such as revision of terms and interest relief. These include posters in educational institutions, wallet cards for students, envelopes for student to store loan documents which provide key messages and contact information, review of communications to students to ensure language is plain and key messages are easy to find, promotion of entrance and exit counselling, as well as the new on-line self-service options, and an outbound e-message campaign which will provide students with key messages at specific points during their loan life cycle.

• Has a new website ‘Learning Clicks’ which includes a Grade 9 to 12

Checklist of things students need to do to plan for post-secondary, including financial planning. A section entitled ‘Look for Free Money’ describes how to do a scholarship search. A budget calculator is included, as well as a link to ‘Stretch Your Dollars: Budgeting Basics’, a publication of the Credit Counselling Services of Alberta. An on-line version of the publication ‘Money 101, Alberta’ is available, which includes sections on educational costs, budgeting techniques, financial management skills, and sources of financial assistance. Learning Clicks can be found at: http://www.alis.gov.ab.ca/LearningClicks

British Columbia

• Jointly funded and developed a four-year pan-Canadian communications initiative aimed at encouraging K-12 students and their families to plan for post-secondary education.

• Initiated and funded, partnered with the Canada Millennium Scholarship

Foundation, an advisory committee of K-12 teachers and their development of a Career Planning 10 teacher resource (an interactive DVD re post-secondary options).

• Funded the B.C. Business Council’s development of an interactive career

choices DVD ‘The Third Option’ (current edition called ‘The Third Option Rocks’), which includes information on expected salary, can be rented free at Rogers Video stores in B.C.

• Sends student loan brochures to K-12 administrators as a resource for

teachers and to be distributed to targeted students/families.

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• Re-designing the B.C. Student Assistance website to provide more access

for K-12 administrators, students and families to tools for post-secondary planning, financing, career and school choices.

• Re-designing the BCSAP website to provide easier access for financial aid

administrators to tools, products and services including downloadable presentations and products, research papers, a new html version of the BCSAP policy manual, a new loan administration manual, a sample B.C. Student Loan Improvement Plan, and loan administration forms and letters. It is expected that the sample B.C. Student Loan Improvement Plan will provide schools with tools to improve the administration of BCSAP at their institutions, resulting in a reduction of withdrawals and unsuccessful completions, and an increase in loan repayment rates.

• Developed series of brochures on various components of student financial

assistance, including planning, applying and repaying.

• Promotes public post-secondary institution-based initiatives by: (a) engaging Presidents (promoting student success through the accountability framework and attaching student aid policy requirements to government funding); (b) promoting discussion through sponsoring and publishing research on default indicators and school-based improvement techniques; (c) providing funding for pilot projects, such as North Island College’s efforts to develop an on-line system for early identification of high-risk students and enhanced communications; (d) supporting financial assistance officers and departments.

• Actively engages private school owners and operators in strengthening

designation requirements and supporting their default performance improvement efforts (e.g. sponsoring/providing awareness conferences and presentations, assisting in cross-industry development of ‘The Student Success Plan’, assisting in the development of the B.C. Career Colleges Association Loan Administration Workshop and Default Management Workshop.)

• Presented ‘The lifecycle of the loan’ (in PowerPoint) to graduating

students at the University of Victoria to provide them with an understanding of their obligations and options with respect to B.C. Student Loans.

• Randomly conducts site visits to private institutions to provide them with

information and tips on improving their BCSAP administration efforts. Approximately 20 to 30 schools are visited annually.

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• Participated in the development of the Pan Canadian Designation Policy Framework which formally authorizes engaging post-secondary institutions in student loan performance improvements.

• Actively participates and promotes federal/provincial Inter-governmental

Consultative Committee on Student Financial Assistance (ICCSFA) sub-committees examining and developing administrative improvements and research-based policy/funding options focused on student success (e.g. access, retention and repayment assistance).

• Initiated and co-chaired federal/provincial committee to promote and

develop default management initiatives, including policy and administration enhancements, and awareness of best practices (e.g. sponsoring/providing presentations to institutional/industry conferences.

• Conducted a pilot project through the ICCSFA Special Investment Fund

(SIF) on communications with students during their grace period (six months following graduation). New and innovative communication materials were developed, with monitoring done of the enhanced materials’ success in reducing default rates for a small sample of students.

• Working with the BC Student Loan Service Provider: (a) implemented a

new customer service satisfaction survey; (b) conduct contract performance audits and cohort analysis to develop operational and policy improvements (e.g. recently obtained B.C. Interest Relief policy changes aimed at reducing application barriers and providing opportunity for on-line application for B.C. Interest Relief; (c) conducted a review of all form letters and web communications; (d) introduced very successful on-line PC and tele-banking services; (e) initiated a mass e-mail campaign to remind students to update their address and interest-free status; (f) initiated a more integrated process between the service provider and the Student Services Branch to update student addresses, using government resources, to prevent skips and get students back on track prior to them becoming serious defaulters; (g) assisted the service provider to enhance their website and include an updated log-in process for students to access their on-line statement, including message ‘pop-ups’ to inform them of important information such as ‘default status - contact the service provider immediately’; (h) enhanced the flexibility of the loan repayment process by allowing borrowers to make their scheduled payment at any time in the month, rather than just the last day.

• Will be soon posting a new Request for Proposals to re-procure a service

provider with an enhanced focus on performance, client service and portfolio analysis.

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• Reorganizing Student Services Branch resources to better support institutions by improving access to student financial assistance application information and loan repayment data, improving communications products and web-based services, and improving access to dedicated school liaison staff.

• Targeting SSB resources to the prevention of defaults by establishing the

Debt Management Unit, which will work both internally and externally (with the service provider, and in the case of borrowers beyond 150-day default, with the government collection agent) to manage student debt.

Manitoba

• Offers to assist post-secondary institutions to help them develop entrance and exit sessions and other tools. Several schools have requested a review of their in-house literature/presentations/correspondence about loan repayment, and they have worked with these schools to improve content and message.

• Provides copies of a brochure on loan repayment and debt reduction

opportunities ‘From Start to Finish’ to schools on an annual and requested (supplementary) basis.

• Is in the early stages of developing a debt servicing tool, which will be in

the form of web-based exit counselling, to assist students with post-secondary planning.

• Has five student advisors assigned to educational institutions in a

caseload system. The advisors work directly with students at the schools or with school staff to educate and advise about loan repayment, as well as provide help with rudimentary financial planning.

• There are two government loan counsellors who follow up with students

after they’ve graduated. They offer options to ‘at-risk’ graduates such as extended interest relief and reduced payments on their Manitoba Student Loan in order to ease some of the financial pressure on graduates who might otherwise default on their loans.

• Has details regarding loan repayment on their website:

http://www.gov.mb.ca/educate/sfa/pages/repaying_en.html

• Delivers ‘From Start to Finish’ Orientation/Repayment Sessions, targeted at student loan recipients enrolled in participating Private Vocational institutions. These PowerPoint presentations are one-hour in duration, with the initial half hour for students in the first six weeks of their program

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and the last half hour for students in the final six weeks. The objective is to ensure students are aware of (a) their responsibilities as students and as borrowers; (b) their rights and responsibilities as consumers; (c) the Canada Millennium Scholarship Bursary and Manitoba Bursary eligibility requirements; (d) loan repayment requirements; and (e) debt reduction opportunities. Handouts include PowerPoint presentation notes, brochures detailing Canada/Manitoba Student Aid programs, ‘Start to Finish’ brochures, and contact information. Individualized handouts are produced for students detailing sample repayment calculations of both their federal and provincial loans.

• Has delivered exit sessions facilitated by a Manitoba student advisor at a

number of private vocational institutions to cover student repayment responsibilities. The exit session for Manitoba Emergency Services College covered both Manitoba and Saskatchewan loan recipients. Private institution Scientific Marvel requires that all students who complete a program must attend an exit session, and will not issue students a diploma until they have attended the session. Optional attendance exit sessions are hosted by Academy of Learning (Winnipeg North and Winnipeg South), while CDI College hosts optional attendance entrance sessions. Manitoba student advisors have made presentations of the entrance/exit material at Robertson College to all their incoming students.

• Delivers orientation sessions to student loan recipients enrolled in

Hairstyling/Esthetics programs. Facilitated by Manitoba student advisors, the monthly sessions involve mandatory attendance at a PowerPoint presentation and discussion which covers similar content to the ‘Start to Finish’ orientation sessions outlined above. Additional material and handouts are included on the Apprenticeship component attached to the Hairstyling/Esthetics field. Students do not get their loan documents until they attend the session. In addition, loans to these students are disbursed in four installments (two CSLP, two MSLP) instead of two (one CSLP, one MSLP) to reduce the risk to the overall portfolio since these programs have substantial dropout and default rates.

New Brunswick

• The Post-Secondary Liaison Officer provides debt management sessions to graduating students at public and private institutions on an as needed basis.

• The anticipated release date of the new designation policy to

educational institutions is tentatively scheduled for June 2006.

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• After the release of the designation policy, Student Financial Services (SFS) will be working with and encouraging institutions to come up with strategies and practices to improve their students’ loan repayments.

• Plans are in the works to hire a Designation Officer to work with

educational institutions on, among other things, improving the loan repayment rates of students.

Newfoundland

• Offers both student and parent information sessions across the province in conjunction with local career fairs in the fall and spring. Typically the target audience includes high school students and parents. In the past two years have partnered with Regional Economic Zonal Boards who organize events for their local high schools. Presentations include details of the Newfoundland and Labrador Integrated Student Loan process and on the importance of making informed career decisions that will ensure students graduate post-secondary in a timely manner with reasonable student loan debt.

• About two years ago offered a brief information session on repayment

to the private schools in St. John’s, targeting students about to graduate. Students were informed about Interest Relief and debt reduction opportunities and of the importance of ensuring the lender has up-to-date contact information. One of the esthetics/hair design private schools has requested this session yearly.

• There are two Career Counselling Specialist positions within the

Student Financial Services Division of the Department of Education. The goal is to provide career/financial counselling and information to Newfoundland and Labrador students to ensure they make sound career decisions, leading to timely completion of post-secondary with a reasonable student loan debt.

• The students that are seen by counsellors are typically from internal

referrals (i.e. within the Student Financial Services Division). Reasons for referral include: (a) current high student debt and requesting loans for a subsequent program; (b) switching programs of study after the permissible time (after the end of the fourth semester or midpoint of the program); (c) Not completing the program of study in a timely manner; (d) High unmet need of over $5,000 per semester; (e) Referrals from Management, Appeals Officer and/or Senior Assessment Officer.

• Once the student is contacted and an appointment scheduled, the

following information is reviewed with the student. Review career plan:

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(a) academic background; (b) limitations and supports; (c) suitability as it relates to interest, values and perceived attitudes; (d) labour market awareness. Review financial plan: (a) cost of training; (b) accumulated debt; (c) projected debt; (d) total debt ratio; (e) available resources; (f) feasibility.

Nova Scotia

• A planned ‘pilot’ project will focus on students who are either entering repayment or are in repayment, with the intention to work with schools to provide supports to such students (exit counselling, Interest Relief information etc.) A ‘Case Management’ pilot will involve identification of students who’ve missed their first or second payments, and then, in cooperation with schools, attempts will be made to contact the student to remediate the loan through strategies such as Interest Relief. While a number of educational institutions have expressed interest in this project, the privacy office is being worked with to determine if individual repayment information can be discussed with schools. (A pilot was previously tried using only the Nova Scotia Student Assistance Office, but out of two hundred and twenty-five attempted contacts, only five students were actually spoken to.)

• A second potential ‘pilot’ involves a private school strengthening their

admission process. For many of the private schools in Nova Scotia, a student can enroll as a mature student, with entrance requirements being very flexible. In many cases, students who do not have the academic background to be successful enroll and end up withdrawing. This school is looking at running a ‘bridge’ program similar to upgrading, in which students would receive a better academic foundation before enrolling in post-secondary studies. Students would not be eligible for government assistance during this upgrading. Once the school is satisfied that the student has a more solid academic foundation, the student would enroll in the post-secondary program and apply for assistance as necessary.

Ontario

• Institutions in Ontario are required to participate in the annual collection of graduation rates by program. These rates and default rates by program and institution are accessible to prospective students from the Ministry/OSAP website.

• Schools with Ontario Student Loan default rates above 25% for three

consecutive years, or a most recent rate above 40%, are required to engage an experienced third-party default management firm to assist

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the school in developing a default reduction plan. Schools must also file a mid-year and year-end report on implementation of the plan.

• Institutional Admissions/Enrollment Responsibilities and Initiatives

Identified in Default Reduction Plans:

o review graduation rates by program o review standards for admission and adequacy of entrance

exams and minimum test scores

• Institutional Financial Aid Responsibilities:

o meet with students to develop a budget o inform students of other financial resources that might be

available (e.g. scholarships/bursaries) o conduct entrance loan counselling sessions and provide

information materials (e.g. grace period, consolidation process, interest relief program, revising the term of the loan, implications of default for the student, contact information for loan servicing)

o develop and administer a student loan repayment quiz o conduct an exit loan counselling session and provide

information materials

• Data Management and Monitoring Implementation of the Institutional Default Reduction Plan:

o track student attendance and academic progress o develop a form/protocol for students to provide the institution

with address/telephone number updates o Excel file with a layout for monitoring implementation of the

plan, the names of loan recipients and the dates that each student is provided with each of the default management services and the date they complete or withdraw from the program.

o for schools that are required to submit a plan, the Ministry also requires a detailed report from the default management firm upon its implementation.

o some schools engage the default management firm to maintain contact with students when they exit school and enter repayment. The default management firm reminds students of repayment obligations, repayment assistance programs, and loan servicing contacts.

• Institutional Career Services/Placement Assistance Activities:

o develop a Resource Centre for Career Information.

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o conduct Grace Period Employment Surveys and Counselling

• Collecting and Sharing Institutional Information on Student Outcomes:

o the Ministry coordinates an employment survey of graduates through a common independent and experienced survey firm. Schools pay the survey firm for completed surveys.

o schools have the option to select an enhanced survey whereby they can gather information on graduates’ post-study incomes and whether they obtain employment in a related field.

o information on graduation rates, graduate employment rates, and default rates by program are posted on the Ministry and institutional websites for prospective students to review.

o institutions also use this information to assess relative performance of programs. Some institutions have elected to discontinue or significantly revise programs that have poor outcomes.

• Institutional Enhancement and Expansion of Relations with Employers:

o many post-secondary institutions in Ontario, including all public

colleges, conduct surveys of employers’ satisfaction with graduates.

Quebec

• Student loan repayment information is included in every publication and on the Aide financiere aux etudiants website.

• Repayment obligations are clearly explained on the loan agreement

forms, and a description of a ‘borrower in default’ is provided.

• A letter is sent after the student has completed his or her full-time studies indicating the start date for student loan repayment, how interest is calculated, the Deferred Payment Plan available for those with financial problems and where to call for further information.

• A loan remission program is available for students who have

completed a Bachelor’s degree or college-level technical training within the normal time limits. When remission is granted, 15% of the student loan debt is forgiven. Information on this program is available on the Aide financiere au etudiants website and in all financial aid publications at post-secondary institutions in the province.

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Saskatchewan

• Is in the process of developing a number of tools for use by department staff and educational institutions. Types of materials that have been developed or are being developed include:

o a student handbook which provides information on the entire

loan cycle. o a Repayment Quick Tips sheet that provides information about

the repayment process and repayment assistance tools that are available: http://www.sasked.gov.sk.ca:7777/branches/sfa/student_loans/pdfs/repaymentquicktips.pdf

o PowerPoint presentations on repayment that can be used by educational institutions.

o PowerPoint demo on how to use the CanLearn on-line account manager

o a fact sheet for students with dependents that outlines the other federal and provincial income supplements that are available to individuals both while they are in school or working (e.g. Saskatchewan has an employment supplement program and a rental supplement programs for families, as well as the Saskatchewan Child Benefit).

• Department staff will provide information sessions to students at the

educational institutions at the request of the institution. Yukon

• While there are no territorial loans, the Yukon Grant program provides non-repayable assistance to students.

• Students who come to the government Financial Aid office are

informed of the eligibility criteria and have access to the Canada Student Loan pamphlets. Clarification is provided if students have enquiries regarding repayment. Students are advised to seek assistance through the Federal government’s Interest Relief/Extended Interest Relief, Revision of Terms and Debt Reduction in Repayment programs.

• The Yukon financial aid booklet addresses some generic questions

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Summary of Institutional Strategies & Practices for Improving Loan Repayment

Introduction: Key Players in the Government Loan System Given the research findings on factors that play a role in defaults, it is clear that increasing repayment rates on government student loans should be viewed as a multi-faceted challenge. There appears to be a number of key dimensions related to defaults, as well as a number of central players in the government loan system, all of whom can be seen to have a role and responsibility related to preventing defaults and thus maintaining the integrity of the system. The latter include federal and provincial governments who create legislation, regulations, policies and processes which determine who gets loans, how students obtain and repay them, and what student rights and responsibilities are. The activities and approach of Student Loan Service Providers, contracted by governments to assist in loan delivery and repayment and provide information to students at various stages of their loan experience, also have an impact. Post-secondary institutions, dealing directly with students and providing information and assistance as they apply for and receive their loans, and, in some cases during repayment, have opportunities to have an impact on student loan defaults. And of course, the students themselves have a role to play and choices to make regarding how they approach meeting their student loan debt obligations. This chapter summarizes selected strategies, practices and tools currently used by Canadian post-secondary institutions intended to impact student government loan repayment rates. They are described in four categories: (1) before post-secondary; (2) early stages of enrolment; (3) in-school and late stages of enrolment; and 4) after students leave school. Included are both strategies that are directly intended to improve loan repayment and those that appear to be indirectly impacting repayment, some via an institutional commitment to student success and completion of programs. It is important to recognize that these school-based activities are only one part of a much larger picture, where other key players in the government loan system have equally important roles to play in limiting defaults. 1. Institutional Approaches to Improving Loan Repayment: Before Post-secondary

• Financial aid advisors have a booth or display at open houses and other prospective student orientation or recruitment events to inform prospective students as early as possible about the cost of post-secondary and

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financial assistance options. (BC Institute of Technology, Douglas College; Okanagan College; Okanagan College)

• Information on topics such as loan repayment and interest relief is

distributed at events such at the College Information Night and New Student Orientation. (Vancouver Community College)

• Special, targeted information sessions are offered to specific groups of

students such as those completing preparatory/pre-entry programs (BC Institute of Technology)

• Spring financial assistance workshops are delivered to regional high

schools. (College of the Rockies)

• As of 2006/07, Student Success 1100 will be offered on a co-credit basis to high school students. (Douglas College)

• A new evening information session ‘College 101’ for parents and students

(of all ages) includes an overview of admissions requirements and processes, plus information on government and institutional student assistance. (Okanagan College)

• Presentations on ‘Financing Your Education’ are given for high school

students and parents. (Thompson Rivers University).

• Students are encouraged to use the www.bcsap.bc.ca website for financial planning and to review repayment scenarios. (Vancouver Community College)

• The ‘Comprehensive Financial Planning Workbook’, available at

http://www.ucfv.bc.ca/future/cfpe/CFPE.htm was developed to decrease student reliance on loans and increase financial assistance awareness. (University College of the Fraser Valley).

• The timeline for provision of information on the college offerings and

timetables has been moved up, to allow students to plan their studies and timetables early and thereby commit to a full program of study. (Langara College)

• A financial aid & awards publication summarizing available government

and institutions student assistance is circulated to prospective students. (BC Institute of Technology.)

• Financial assistance information is provided to prospective students by

University/Community Liaison staff during visits to high schools. (University of Northern B.C.; Vancouver Community College)

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• Has developed a brochure ‘How to pay for college and not break the bank’

(Douglas College)

• Comprehensive information on all types of government and institutional student assistance is provided on the financial aid department website. (British Columbia Institute of Technology, Douglas College).

• Students are referred to the financial planning tools at the federal

government’s CanLearn website. (BC Institute of Technology; Douglas College)

• Expensive tuition means that students do careful planning before they

attend. (Trinity Western University)

• In order to establish a relationship with the student aid office prior to admission, applicants are e-mailed the name and e-mail address of their financial aid officer, with instructions on how to apply for government student loans and relevant financial aid at the university. (Brock University, Ontario)

2. Institutional Approaches to Improving Loan Repayment: Early Stages of Enrolment

• The university has a Retention Committee that designs and coordinates retention initiatives, with membership including the Director of Awards and Financial Aid. (Brock University, Ontario)

• The Registrar and Coordinator of Student Funding and Awards meet with

the chairpersons of programs that show high default rates to discuss strategies for informing students about their loan responsibilities. (Red Deer College, Alberta)

• A handbook describing available student services is circulated to new

students, to ensure they are aware of assistance and resources available to them when in school. (Camosun College) Queens University has a similar publication ‘Financing Your Queen’s Education’ sent to students with their offer of admission.

• Student Success workshops or courses are offered by a Student Service

or educational departments, many having a financial aid component (B.C. Institute of Technology; Langara College; University College of the Fraser Valley) Student Success 1100 at Douglas College carries 3 college credits; College of the Rockies has a plan to offer Essential Skills for College Success ECS 100; Okanagan College’s Counselling Department

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is planning to establish a student success program at the beginning of each term beginning with the 06/07 year; University 101 is mandatory for all students at Trinity Western University. Non-credit ‘Ready, Set, Go’ Student Success courses are offered. (Vancouver Community College)

• ‘Imagine UBC’, plus Student Success and Student Leadership programs

are offered by the university, while the financial aid and awards office presents workshops at orientation. (University of B.C.)

• Financial aid presents information sessions to Business classes as part of

their Student Success course. (Algonquin College, Ottawa)

• The university has several programs to help students succeed in their studies and complete their academic goals, including University 101, study skills counselling, writing help and resources, and a student mentoring centre. (University of Ottawa)

• Financial aid & awards presentations are part of Orientation. (University of

Northern B.C.; University of Victoria)

• Orientation programs are offered for both new and transfer students, and for parents. (University of Victoria)

• Student awards and financial aid presentations are offered throughout the

year at the Student Transitions Centre on campus. (University of Victoria)

• A financial literacy program is planned. (Langara College, Acadia University)

• Copies of the Murray Baker’s book ‘the Debt Free Graduate’ are given out

at student orientation and/or student success workshops/courses (College of the Rockies; Douglas College; Okanagan College; University College of the Fraser Valley).The University of Victoria distributes copies at all parent and student orientation sessions. Okanagan College also distributes the recent version of the CanLean booklet.

• There is a plan to resume the practice of having financial aid staff visit

individual classes during the first Orientation weeks of classes in September, to provide information on student loans and financial assistance. (Vancouver Community College)

• An on-line student orientation has been added to the college website

(Douglas College).

• First year orientation includes student success initiatives, encourages students to engage with each other and their professors to build a sense

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of community, and includes presentations by all student support providers on campus. (Okanagan College)

• Financial aid group sessions are offered in the summer, to provide

information on all types of student aid and loan repayment. (Douglas College, although noting a drop in enrolment lately).

• A student services day/open house is held every fall to introduce students

to available services. (BC Institute of Technology, Douglas College)

• The financial aid office sets up an information kiosk twice a year with other Student Services, handing out brochures about government student assistance and loan repayment. (Algonquin College, Ottawa)

• The awards office participates with the student government in a ‘Financial

Aid Awareness’ week, during which sessions are held on financing a Queen’s education. (Queens University)

• The financial aid administrator is on the staff of the University Life office,

such that for each program intake, he/she visits the classes and introduces their role. The class is taken on a campus tour, establishing a good rapport that will encourage the students to go to financial aid for assistance (Royal Roads University)

• An Office of New Students will be established in September 2006 to

facilitate the transition of new students to the college, and their retention into second year and beyond. (Douglas College)

• Student-use computers are available in the reception area to allow

students to obtain web-based financial aid information and apply for government aid on-line. (BC Institute of Technology, Douglas College)

• Educational and admissions polices ensure that only qualified students

(those who are sufficiently prepared, and have a good chance for success) are admitted. (College of the Rockies; Justice Institute of B.C.). Douglas College introduced a new English requirement in the fall 2004.

• A degree audit program is planned for implementation, one that allows

students to monitor their own progress, and for intervention by student services. (College of the Rockies)

• During orientation, and just before government loan document pickup, the

student aid office has ‘mandatory’ information sessions for first-time borrowers which provide targeted information on their loans and begin to develop financial literacy regarding budgeting, money management, credit, etc. (Brock University, Ontario)

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• Confirmation of Enrolment signing of loan documents is done in

mandatory group sessions during which emphasis is placed on repaying Ontario student loans, the consequences of default, repayment options and programs for students unemployed at repayment time. Students are given advice on creating a budget and a cardboard folder to be used to store all documents and correspondence regarding their loans. (Durham College, Ontario)

• At loan pickup time each year, every loan recipient is given a 3-page

information package on government assistance and institutional directions (e.g. if a portion of the loan will be directed to tuition fees, and a reminder to contact the financial aid office if there is any change in the student’s personal circumstances such as course load reduction). The package also explains the consequences of failing to meet these obligations. (Sheridan Institute of Technology & Advanced Learning, Ontario).

• The college’s Campus Life department coordinates four ‘Beat the Rush’

sessions each summer to provide new and returning students information on services such as the Registrar’s Office, Financial Aid and Special Needs. The Financial Aid section includes an on-line budget exercise, that when completed, allows the student to be issued a gold card which allows the student into a fast-track line to pick up their loan documents on the first day of term. (Canadore College, Ontario)

• An ‘Introduction to University’ program is offered for students who don’t

quite meet the entrance requirements. They are allowed to register in 60% of a full course load, must take non-credit courses in areas such as study skills, and are monitored closely to ensure they receive the support they need to succeed. (Laurentian University, Ontario)

3. Institutional Approaches to Improving Loan Repayment: In-school and Late Stages of Enrolment

• Up-to-date, detailed bulletin boards on government and other types of student assistance are used to encourage students to investigate all assistance options. (British Columbia Institute of Technology)

• A regular e-mail communication strategy is in place to inform government

assistance applicants of deadlines and other issues regarding their loan (e.g. those with past, not current loans, are reminded about maintaining interest-free status.) Brock University, Ontario

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• Group information sessions on student loans and other forms of assistance are given to faculty and staff, (University of B.C.; B.C. Institute of Technology)

• Attendance policies are in place for vocational programs. (College of the

Rockies)

• Learning Centres located at all campuses provide students with assistance in English, Math and Science on a drop-in basis. (Okanagan College)

• Teaching Assistants run Accounting Study Halls for domestic and

international students. (Okanagan College)

• Financial Peer Assistants offer one-on-one or group assistance on budgeting, money management and credit, working with Residence Life staff and Health Services. (Brock University, Ontario)

• Communication with students through school intranet e-mail messages,

targeted to announce important developments such as award and bursary deadlines. (BC Institute of Technology, Douglas College)

• Students are informed of the implications of dropping courses through the

university intranet e-mail system and at the time of loan pickup. (Queens University; McMaster University, Ontario)

• Academic Advisors remind students that if they drop a course and are

loan borrowers, they should contact the Student Awards Office. (Queens University)

• Has used the back of washroom doors to communicate award deadlines

to a captive audience. (BC Institute of Technology)

• A plain language brochure is planned to be sent to the student after they receive their loan, to include information on a student’s responsibilities, maintaining the minimum course load, plus contact information for the financial aid office. (North Island College)

• The financial aid website includes an interactive ‘Budget Builder’, with a

budgeting game coming soon. (McMaster University, Ontario) website http://sfas.mcmaster.ca

• Budgeting 101 Workshops are offered to first year students to increase

awareness of all financial options. Comedy skits are also used with first year students to provide a fun, interactive way to provide information. (University of New Brunswick)

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• Reports are system-generated on a regular (e.g. weekly or bi-weekly)

basis from the student records system to identify student withdrawals at as early a stage as possible. Students are then contacted to ensure they know the implications of withdrawal, with some students re-enrolling in a full-course load (College of the Rockies; Douglas College; Emily Carr Institute; Langara College; Malaspina University College; North Island College; University College of the Fraser Valley; University of Victoria)

• In some situations, the financial aid office contacts students who drop their

course loads below ‘full-time’, to inform them of the implications for their student assistance. (B.C. Institute of Technology, Vancouver Community College)

• When students withdrawing in person are referred by the Registrar’s

Office, they are counselled re their loan responsibilities and provided a copy of the Ontario Student Assistance Program brochure. They have a form that must be signed by the financial aid office. Students withdrawing on-line are sent a repayment information sheet. (Algonquin College, Ottawa)

• Students identified as having dropped below a full-course load (60%, or

40% for students with permanent disabilities) are often discovered to be concurrently enrolled at the university and another institution, or have dropped below a full-course load for medical reasons. The students can be advised of split enrolment and/or appeal policies and procedures to keep their loan in good standing. (University of Victoria)

• An information sheet is mailed to students who have withdrawn or reduced

their course load to make them aware of loan repayment, Interest Relief, re-instatement of interest-free status upon a return to classes, and the need to update their addresses. (University of Toronto)

• Plans are being made to develop a pop-up box such that when a student

goes to withdraw on-line, the pop-up advises them to contact the financial aid office. (Capilano College)

• The course drop/add form advises students to consult with the financial

aid office if they are receiving student loan funding and are dropping classes. (University of Northern B. C.)

• Government student assistance recipients cannot withdraw from the

school without the signature of a financial aid advisor, in order to ensure students are aware of implications of withdrawal and the detail of loan repayment. (Capilano College; Emily Carr Institute; Institute of Indigenous Government; Canadian University College, Alberta)

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• The financial aid office talks to all students who withdraw, advising them of

their responsibilities and options. (North Island College)

• Due to the close connection with Student Advising and Student Records, the financial aid office is provided a list of students required to withdraw from the university. These students receive an e-mail and letter from financial aid, but they are not required to see a financial aid advisor as part of the withdrawal process. Some withdrawing students are given information through one-on-one advising on loan repayment and other assistance programs. (Simon Fraser University)

• Borrowers who cease to maintain the appropriate course load required for

government assistance are sent a letter informing them of their status and encouraging them to contact the National Student Loan Service Centre. (Queens University)

• Student withdrawals are tracked by the financial aid office, and follow-ups

done with faculty re attendance problems. (Thompson Rivers University) • Students can be referred to the financial aid office by instructors who note

students are not attending class, failing courses etc. The student is then contacted to be reminded of the requirement to attend their classes and their loan repayment responsibilities. (Emily Carr Institute; Institute of Indigenous Government; Langara College; University of Northern B.C. Vancouver Community College)

• Retention issues have become an area of interest for faculty and

administration, which will result in greater completion and thus decreased default rates. (University College of the Fraser Valley)

• The Registrar’s Office notifies Deans prior to the de-registration of

students for non-payment of fees. The Deans speak to the students and if they uncover underlying personal or financial issues for not paying tuition, they refer the students to student support providers on campus. (Okanagan College)

• Students placed on academic probation have the option of returning

earlier than the normal ‘one year out’, by submitting an appeal. The student may be referred to counselling or other services as a condition of granting the appeal. (University of Northern B.C.)

• A new success program has been implemented that allows a student, in

the first semester of having been placed on Academic Probation, to meet with a counsellor to develop a plan for success, which when signed by the student and the counsellor, obligates the college to offer remedial

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assistance where necessary. The student can thus return to studies after only one semester out. (Langara College)

• The financial aid office communicates with all students placed under

academic progression warning status to ensure they are aware of the requirements to continue their eligibility for student loan funding. All students flagged with this status are checked to ensure they have fulfilled the academic requirements to retain their student loan eligibility. A one-on-one interview is initiated to ensure the student is aware that a program withdrawal or reduction in course load (below 60%) will put the student into loan repayment status in six months. (Sheridan Institute of Technology & Advanced Learning, Ontario)

• At least two awards officers are available each business day to conduct

‘financial advising’ sessions, with residence dons encouraged to contact the department to arrange these sessions. (Queens University)

• In order to limit overawards (and prevent potential defaults as a result of

high debt), students in specific programs will not be allowed to apply for B.C. Student Assistance covering the fall, spring and summer terms. (Capilano College).

• Emergency loans, and in some cases Emergency Bursaries are made

available to retain students in financial crises: (BC Institute of Technology; Camosun College; Douglas College; Okanagan College)

• Safeway gift certificates are used in emergency to help students with food

costs. (Douglas College).

• Scholarships and bursaries assist in supporting student success, particularly helping high need students pay for basic educational and living expenses. (Selkirk College)

• Institutional bursaries have been developed to assist the neediest

students cover some of their need unmet by the government student loan program. (University College of the Fraser Valley)

• Bursary, work study and emergency loan programs are available to assist

in the retention of students at the margins. (University of Victoria) • Students are required to complete personal learning plans and meet with

academic advisors to clarify their objectives (Camosun College)

• The Student Union Society has developed a close relationship with financial aid through the emergency funds they raise to assist students in

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crisis who would otherwise be unable to complete their studies. (University College of the Fraser Valley)

• The college work study program provides on-campus employment with

flexible hours to fit around classes and an opportunity to have experience related to a student’s field of interest. Work study positions connect students to the college and faculty, creating a sense of community and a commitment to program completion. (University College of the Fraser Valley)

• An effective system of inter-departmental referrals is in place among

student service departments such as Counselling and Disability Services to ensure students receive support to address their problems. (Camosun College; Douglas College; North Island College; Okanagan College; University College of the Fraser Valley; Vancouver City College)


withdrawing and/or failing to other student support services to assist them stay in school, withdraw from studies with medical approval, and/or plan to return to school after time out. (University of Northern B.C.; University of Victoria)

• In some cases when students have been identified as ‘at risk’, they are

referred to take Math or English upgrading either concurrently or before resuming post-secondary studies. Financial aid works with students who need to ‘insert’ back into advanced levels of a program to complete their credential. (Vancouver Community College)

• Small class sizes and low instructor/student ratios allow ‘at risk’ students

to be easily identified and monitored. (Justice Institute of B.C.)

• Eight remedial/reading and review days are adjacent to critical exam points to reduce the withdrawal rate. (Justice Institute of B.C.)

• Peer tutors, supervised through the College’s Student Access and Support

Department, are hired under the work study program to help students who are struggling with their studies. (Selkirk College)

• A mentoring and support program offered to students who experience

academic difficulties in their first year has proven to be very effective in keeping students in post-secondary. (Laurentian University, Ontario)

• Special programs are run for students on academic probation, as well as

for those required to withdraw from the university. (Simon Fraser University)

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• There is general awareness-building for support services that increases retention and student success. e.g. all services offered by Student Services and the faculties as well as services offered to students by paraprofessionals through peer educators and student learning commons. (Simon Fraser University)

• E-mail reminders are sent to students about keeping their previous

student loans interest-free if they are not continuing to borrow. (University of Toronto)

• One-on-one interviews are provided at a student’s request, usually when

they are about to graduate, to discuss their accumulated debt load, loan repayment and debt management tools. (Okanagan College)

• Students are helped to reinstate previously defaulted loans to put them

back into good standing so they can access debt management tools and additional funding in order to complete their studies. (Okanagan College)

• A plain language brochure will be sent at the end of the student’s last

funded semester or when they withdraw, to advise them of consolidation and options available it they can’t pay. (North Island College)

• The financial aid office visits each loan-eligible program that is nearing

completion, to explain the repayment process and the importance of keeping a student loan in good standing. Contact information for the financial aid office and lenders is included (Royal Roads University).

• The expectations for loan repayment and the consequences of default are

communicated to students about to graduate via e-mail and/or the financial aid department website. (Simon Fraser University)

• The financial aid office uses loan repayment materials available from U.S.

organizations, customizing the information for Canadian students. An on-line exit counselling process is planned for Canadian students, using a U.S. process that already exists. (Trinity Western University)

• Student Life activities have increased to encourage engagement with

other students and the school. Activities such as Orientation, Intramurals and the Leadership Institute have been successful in bringing students together and keeping them to program completion. (University College of the Fraser Valley)

• The university’s Student Life department has an extensive retention

program that involves financial aid. (Trinity Western University)

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• Presented by the financial aid office in conjunction with the National Student Loan Service Centre, workshops are offered to students either generally, or targeted to those who are graduating. They provide information on how to handle their student loans after graduation and options if they are not able to repay. (University of B.C; Algonquin College, Ottawa: Brock University, Ontario; McMaster University, Ontario; Sheridan Institute of Technology & Advanced Learning, Ontario; University of Ottawa; University of Toronto) Durham College, Ontario, uses door prizes to encourage attendance.

• Loan repayment seminars are offered two or three times per year, with

direct e-mail sent to graduating students inviting them to the seminar. Handouts, with information on Interest Relief, Debt Reduction in Repayment, as well as provincial resources, are sent to those students who do not attend. Individual appointments are given to students who require more information. (University of New Brunswick)

• A National Student Loan Service Centre representative visits the campus

in March each year to talk to students about consolidation of their loan, with a table set up in a visible area of the college. (Red Deer College, Alberta)

• An information sheet with details about loan consolidation is given to

students along with their graduation credential if they have had government student funding, and consolidation information is published in the bi-weekly student newspaper in March. (Red Deer College, Alberta)

• All graduating seniors are personally contacted prior to April

commencement with information regarding ‘what happens to loans now’, a one-page letter that includes contact numbers for the National Student Loan Centre. Included is a brochure on options such as Interest Relief. The financial aid office receives calls in the fall from grads asking ‘what was it you told us last spring?’ (Canadian University College, Alberta)

• Student awards and financial aid is included in the Grad Year Orientation

program to provide students with information about loan repayment options prior to their departure from the university. (University of Victoria)

• Loan repayment information is sent to every student who withdraws and to

everyone who applies to graduate. (Laurentian University, Ontario) 4. Institutional Approaches to improve Loan Repayment: After Students Leave School.

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• Students have a strong relationship with frontline staff and often return to discuss Interest Relief options. (Okanagan College)

• Students are assisted in navigating repayment processes and debt

management tools which they receive notice of student loan consolidation. (Okanagan College)

• The college Employment Services Office helps students with resumes and

finding jobs. (Okanagan College)

• Targeted e-mail is sent to recent graduates, providing basic information about loan repayment and inviting them to come back to campus for one-on-one advising or to attend information sessions. (Ontario College of Art & Design, Toronto)

• All students who leave the university are requested to complete an Exit

Survey, asking about the issues driving their decision to leave. In the future the survey is being expanded to students who do not return. (Brock University, Ontario)

• As indicated in the College and Institute Student Outcomes Survey,

Institute graduates show strong employment and earning outcomes, which should result in a direct correlation with the graduates’ ability to repay their student loans. (Justice Institute of B.C.)

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Appendix A:

Preventing Government Loan Defaults Summary of Selected References

Association of Universities and Colleges of Canada. Submission to Human Resources Development Canada in response to the Consultative Document entitled Designation and Default - A Consultation Paper. Ottawa. September 1999. Available at: http://www.aucc.ca/publcations/reports/1999/default_09_13_e.html In response to the proposed “Core Elements of a Framework for Designation”, the AUCC indicated it feels strongly that, for student loan purposes, designation of government-chartered, not-for-profit universities and colleges should be automatic, and that designation of private career colleges for student loan purposes should be based on their complying, on an on-going basis, with rigorous and effectively enforced provincial licensing and regulatory requirements. The response also outlined an understanding that designation should be of institutions as a whole and not of individual academic programs. In response to the proposed “Roles and Responsibilities of All Stakeholders in Reducing Student Loan Defaults”, AUCC indicated that ‘type of institution attended’ should be added to the list of factors that may directly or indirectly influence student defaults. They suggest that when default levels among the former students of a particular educational institution are well above the level for other institutions, this should trigger an analysis to identify the causes of the default level and to identify remedial actions. Factors are proposed to be taken into account when identifying the causes of high default levels at specific institutions: (a) the economic climate; (b) whether borrowers actually consolidated their loans prior to being placed into default; (c) public institutions’ public access mandates to reach out to non-traditional and disadvantaged students; (d) completion rates and the reasons for non-completion; (e) whether a private vocational institution has conformed to provincial licensing and regulatory requirements; (f) whether lenders of the bulk of defaulted loans have met their service obligations and have default levels consistent with other lenders; (g) whether the educational institution has a student financial assistance office staffed by qualified personnel, with service available to all students; (h) whether the educational institution is meeting its obligations to provide information to students regarding student assistance, to lenders and to governments, regarding a student’s last known address, and to government when a student has withdrawn from full-time studies; and (i) where an educational institution makes specific marketing claims about job placement rates to recruit students, whether it has substantiating information.

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Christman, Dana. Multiple Realities: Characteristics of Loan Defaulters at a Two-Year Public Institution. Community College Review, Vol. 27, No 4. Spring 2000. pp 16 to 33. Provides an analysis of previous research related to four perspectives: economic (human capital theory, ability-to-pay theory), sociological (student-institution fit, structural/functional perspective, act of deviance), psychological (attitude formation), and federal government perspectives (holding institutions accountable for defaults).This study looks at borrowers who defaulted on their student loans from 1993 to 1995, using data from the US Department of Education’s National Student Loan Data System. 39 variables were analyzed. Gender was found to be unrelated to default behavior while a number of variables were: low ACT scores, being Native American or African American, coming from a low income family, have a GED, being over 25 years old, being enrolled in less than two semesters, GPA less than 2.00, failing any classes, losing financial aid thru Student Financial Aid suspension, being on Student Financial Aid probation. Cofer, James & Somers, Patricia. An Analytical Approach to Understanding Student Debt Load Response. NASFAA Journal of Student Financial Aid, Vol. 29, No 3. Fall 1999. pp 25 to 44. The influence of student debt load on college persistence was examined using data from the 1992-93 National Post-secondary Aid Survey, plus a model of student persistence that includes either accumulated debt or threshold of accumulated debt. It was found that the threshold of accumulated debt was more effective in explaining student debt response. The researchers found that borrowers in repayment expressed anger at having to assume more debt than students in the decade earlier. Coleman, Marcia & Miller, Chris. Solving the Retention Puzzle: The Link Between Retention and Financial Literacy. Presented at the USA Funds Symposium: It Takes A Campus to Retain a Student. February 2005. Available at: http://www.usafunds.org/forms/financial_aid/Financial_Literacy_Symposium.ppt Outlines risk factors associated with students dropping out of college before completing their program in five categories: (a) academic; (b) personal; (c) life issues; (d) social; (e) institutional. Describes the Noel-Levitz Student Satisfaction Inventory (SSI), a tool for campus-wide assessment to understand the student experience inside and outside the classroom. The SSI allows institutions to capture both a satisfaction score and an importance score so they can define the strengths and the challenges at their institution, and to compare their results to national scores. The inventory includes a section on financial literacy. Suggests using student peer counsellors in a campus financial literacy program.

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Conway, Chris. The 2000 British Columbia Universities Early Leavers Survey. The University President’s Council of British Columbia. January 2001. Available at: http://www.tupc.bc.ca/student_outcomes/publications/early_leavers The BC Universities Early Leavers Survey asked 5,991 early leavers from the University of BC, Simon Fraser University, the University of Victoria and the University of Northern BC why they attended university and why they left, what they thought of their university experience and what their educational and employment outcomes were. Early leavers were defined as those non-graduating students who last registered at one of the four institutions 1997/98, summer 1998 or winter 1998/99 and who had not since re-registered in the winter 1999/2000 as of November 1, 1999. The report indicates that of every 100 students who start undergraduate studies, between 30 and 50 will leave prior to degree completion. Of the total early leavers, over half attend another educational institutional within 24 months of their departure. 59% of the early leavers were ‘true leavers”, that is those whose attrition was unplanned and permanent. Reasons given by ‘true leavers’ for departing university: (a) poor academic performance, including but not limited to, the student being required to withdraw; (b) inadequacy of financial resources to continue study; (c) the decision (arrived at sometime after the commencement of study) to transfer to another institution; (d) changes in personal/life circumstances, including illness and family obligations; (e) the search for, or commencement of employment; and (f) dissatisfaction with, or unavailability of, the academic program in which the student was interested. Council of Ministers of Education Canada. Designation Policy Framework. November 2004. Available at: www.cmec.ca/postsec/DesignationPolicyFramework.en.pdf Initially produced by the Intergovernmental Committee on Student Financial Assistance, the Pan-Canadian Designation Policy Framework was approved by CMEC in April 2003. The Framework was based on four principles: (a) taxpayer protection; (b) accountability and informed choice; (c) consumer protection; and (d) complementarity to other post-secondary education policies; and was developed to be used by provinces and territories to establish designation policies and criteria for educational institutions operating within their jurisdiction. Among the common elements required to be in the provincial designation policies are that institutions provide students with adequate consumer protection and information on which to make an informed choice about their post-secondary education, and that designated institutions are also expected to focus on student success, improve ways to retain students, and ensure students improve their overall employability. The Framework indicates that risk to student assistance programs would be assessed through a measurement of three types of

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performance: (a) portfolio performance (e.g. repayment and default data); (b) institution performance (e.g. administrative compliance, student support services); and (c) student performance (e.g. completion, employment and withdrawal data). Among the Framework’s “Common Elements” described in Attachment A is reference to the requirement for institutions to provide student financial assistance information and counselling, plus several requirements, to be at the option of the province/territory, including (a) requiring institutions to have a withdrawal/exit management plan to assist students; and (b) requiring institutions to meet specific requirements for student retention prior to designation. Dynarski, Mark. Who Defaults on Student Loans? Findings from the National Post-secondary Student Aid Study. Economics of Education Review, Vol. 13, No. 1. March 1994. pp. 56 - 68. Based on National Post-secondary Student Aid data, this study analyzed the characteristics of student loan borrowers, and compared defaulters and non-defaulters along various dimensions, including (a) demographic profiles; (b) socio-economic characteristics; and (c) educational attainment. Borrowers from low-income households and minority groups, high school dropouts, and students attending proprietary schools and two-year colleges were found to be at higher risk of default. Federal/Provincial/Territorial Working Group on Designation. Best Practices Guidelines: “School Tools” for Improving Repayment Performance. 2005 Describes factors causing default as (a) students poorly informed of financial aid information; (b) students’ poor understanding of loan obligations and terms; (c) withdrawals from school; (d) unmanageable non-education debt; (e) family status; (f) personal and financial management; (g) unemployment and low income relative to debt obligations. Factors supporting repayment are listed to include (a) students’ good understanding of loan obligations and terms; (b) clear admission criteria; (c) program completion; (d) employment and income adequate to meet debt obligations; (e) students well prepared for personal and financial management. Outlines a Default Prevention Plan built on borrower education, alliance building, leveraging technology, personal and financial management, loan obligation enforcement, student retention and employment initiatives/services. Flint, Thomas. Predicting Student Loan Defaults. Presented at the Annual Meeting of the Association for the Study of Higher Education, Memphis. 1996. [Plus an article of the same title in the Journal of Higher Education, Vol. 68, No. 3. May-June 1997. pp 322 - 354.]

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Refers to previous default research based on economic, sociological and psychological models. This study analyses data from the 1987 National Post-secondary Student Aid Study, looking at over 1,000 borrowers from 510 institutions. Variables included: student background, school choice, student academic achievement, loan counselling and post-college, point-of-survey variables (the last category including disposable income, congruence between students’ undergraduate major and latest job held, marital status and number of dependents.) Findings suggest that economic variables show no significant association with default (i.e. parental income levels, number of friends/relatives willing to assist with loan payments, types of financial aid received in college, number of loans and totals borrowed, the degree of post-college support), with the exception of borrowers’ own disposable incomes during repayment. Sociological variables also showed no relation to defaults, with these including parental educational and occupational levels, institutional status indices for selectivity, degree levels, students’ status indices such as academic majors, and post-college marital status. It was found that controlling for student background, school choice, academic and other characteristics, there were no differences in repayment behavior related to whether counselling was done before, during, or after enrolment, by either schools or lenders. Individual student characteristics found to relate to default behavior included: gender, race, age, cumulative GPA, disposable income and congruence between major and latest job held. Includes an extensive bibliography. Hansen, Kristie, Fitzgibbon, Tim, Craig, Jo-Ann, & Hopkins, Gary. Loan Repayment. Presented at the US Department of Education Federal Student Assistance Electronic Access Conference, San Diego. 2003. Available at http://www.ifap.ed.gov/presentations/03GeneralSessLoanRepayment.html Outlines the life cycle of a government loan, with four stages: (a) in school (from loan origination until graduation or drop below half time; (b) in grace (from end of school for six months; (c) repayment (from point of leaving grace through successful repayment or discharge; (d) default (from 270 days of delinquency or until loan is cured.) Includes a table on national student loan default rates, showing a high in 1992 of 22% to around 5% by 2003. Describes the common characteristics of delinquent and defaulted students: having withdrawn from school and didn’t complete their studies, did not get the benefit of their full 6-month grace period as a result of late enrolment notification, and having incorrect telephone numbers. Outlines default prevention initiatives of the Iowa College Student Aid Commission, as well as Rutgers, the State University of New Jersey, the latter including the Rutgers Default Prevention Listserve. Describes the US Department of Education’s default processes. Harrast, Steven. Undergraduate Borrowing: A Study of Debtor Students and Their Ability to Retire Undergraduate Loans. NASFAA Journal of

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Student Financial Aid. Vol. 34. No. 1, 2004. Available at: http://www.nasfaa.org/Annualpubs/Journal/Vol34n1/Harrast.PDF A study at Southeastern University that found a number of factors related to the student loan debts of recent graduates: college major, ethnicity, grade point average, age and the number of semesters required to complete a degree. Gender was found to be unrelated to student loan balances. It was concluded that a large percentage of recent graduates have student loans above lender-recommended levels, raising a concern that the benefits of higher education are being slowly eroded by the increasing debt burdens of graduates. The study suggests that the most controllable factor influencing student loan debt is the number of semesters to graduation. The author concludes that minimizing the time to graduation can be accomplished with academic preparation and planning and thus comments that students who need additional preparation before undertaking a university degree program may wish to do so at a lower-cost institution. Hildebrand, Sherry & Walsh, Mark. Default Prevention Training for Financial Aid Professionals. Web Conference sponsored by the U.S. Department of Education and Mapping Your Future. March 15, 2006. Described statistics on the characteristics of U.S. Direct Loan defaulters: (a) 84% didn’t receive full grace period due to late enrolment notification; (b) 71% withdrew without completing studies; 56% had incorrect phone numbers; 83% were not successfully contacted by phone during the 360-day collection effort during delinquency. Suggested that schools can take advantage of the opportunities to minimize delinquent borrowers while the borrower is enrolled, before the borrower leave school, and after the borrower is gone. Strategies while the borrower is enrolled include: (a) entrance counselling; (b) borrower education; (c) development of financial literacy; and (d) ensuring students understand their rights and responsibilities. Proposed that, while the borrower is enrolled, the emphasis should be placed on initiatives that support student success. Stresses the importance of schools identifying their potential defaulters. The ‘before the borrower leaves school’ component described as including exit counselling and ensuring that borrower contact information is correct. After the borrower has left the school, late stage delinquency assistance techniques are suggested to rescue borrowers from default. These include identifying the severely delinquent borrowers, reaching out to them (using a ‘soft touch’), and connecting the student to student loan servicer via a three-way call. Refers to the U.S. Department of Education’s Sample Default Prevention Plan and the many components of Mapping Your Future, including on-line counselling, the student loan repayment calculator, budget calculator and Debt/salary wizard. Howell, Shari & Deike, Randy. Do Entrance and Exit Counseling Make a Difference in Title IV Default Rates? Presented at the US Department of

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Education Federal Student Aid Conference, New York. Spring 2004. Available at http://www.ifap.ed.gov/presentations/04Session12.html Provides an overview of research carried out at Pennsylvania State University, developed as part of PSU’s participation in the Experimental Sites Initiative, to study the impact of entrance and exit counselling on student government loan defaults. Using an experimental design involving separate student cohorts given (a) government regulatory entrance and exit counselling; (b) modified exit counselling but no entrance counselling; and (c) no counselling, the students were tracked for seven years from 1996 to 2003. At no point in the research were the differences in default rates among the student cohorts found to be statistically significant, suggesting that entrance and exit counselling have no effect on loan defaults. Human Resources & Skills Development Canada. Evaluation of the Canada Student Loans Program. October 1997. Available at: http://www11.hrdc-drhc.gc.ca/pls/edd/CSL_brf.shtml The summary of key findings refers to evidence suggesting that the CSLP assists students to complete their studies successfully, by limiting the amount of time they must devote to work while at school. The conclusions section indicates that borrowers from colleges, especially from private colleges, are more likely to default than university students. Evidence is also referred to that indicates student loan default rates are significantly higher for borrowers of some financial institutions than for others. In the full text of the report, Section 6.1 Designation of Educational lnstitutions, reference is made to default rates having limited utility in the designation process, with the nature and quality of education, as evaluated by the provinces, the best foundation for designating post-secondary institutions for Canada Student Loan purposes. It is pointed out that, in addition to using default rates to de-designate schools, the US government implemented a number of reforms over the past decade to address high default rates: (a) stronger oversight of at-risk schools; (b) an improved process for granting eligibility and certification of schools and programs; c) a requirement for financial counselling to student borrowers when they first take out loans, and when they leave school; (d) borrower loan deferments were simplified; (e) more repayment options were added; and (f) stiffer penalties were imposed on defaulters (e.g. income tax refunds applied to loan defaults and garnishing of defaulter wages. A discussion of default reasons suggests that individuals default for individual reasons, with the possibility that institutional rates may be high because borrowers from the institution share common characteristics, not as a result of the nature of their training. Kapsalis, Constantine. Factors Affecting the Repayment of Student Loans. Statistics Canada/Human Resources and Social Development Canada.

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March 2006. Available at http://www.statcan.ca/english/research/81-595-MIE/81-595-MIE2006039.pdf Analyzes the experience of approximately 128,000 students who consolidated their Canada Student Loans in the 1994/95 loan year, from that date to nine years after consolidation September 2003. Key variables reviewed included: the total amount of the loan at consolidation (indebtedness); the current status of the loan and the annual income of the borrower. Current loan status was categorized as one of: paid in full, in repayment or defaulted (i.e. in arrears for three months or longer). Found that 39% of borrowers had repaid their loans in full, 30% were still making payments and 31% were in default. 90% of those who defaulted (28% of the borrowers) did so within three years of consolidation, suggesting that repayment problems tend to occur soon after consolidation. The report examined the relationship among default, debt size and income in the three years following consolidation. Conclusions included: (a) debt size is a factor only for very large student debt (the situation of 2% of borrowers, who had debt over $20,000 and higher default rates than other borrowers); (b) the ability of students to repay their loans depends primarily on their income after graduation, rather than the debt they accumulated; (c) income after graduation, as well as the probability of loan repayment, is strongly related to the type of education (type of degree, field of study and type of institution). Also comments that other key determinants of borrowers’ ability to pay include employment opportunities for new labour market entrants and general income trends. Data tables indicate that the average default rate within the first three years after consolidation for students from universities (graduate programs) was 12%, universities (undergraduate programs) 20%, colleges 30% and private institutions 43%. Data is also given that appears to indicate field of study wasn’t a significant factor in default rates for college and private institution students, but did appear to be a factor for university undergraduate students. For example, average default rates for Arts students was 28%, while those for professional program students (Medicine/Dentistry, Health Sciences and Law) were in the range of 5% to 8%. Leborys, Ben & Walsh, Mark. Default Aversion: Managing the Risk of Default. Presented at the National Association of Student Financial Aid Administrators Conference, Minneapolis. July 2004. Available at http://www.ifap.ed.gov/presentatioins/04NASFAADefaultAversion.html Describes ‘risk management’ as the continuous management of reducing exposure to loss from non-performing loans, through the life of the loan. Points out that the US government has $319 billion in outstanding loans, with approximately 9% of the total outstanding principal balance is in default. Defines Cohort Default Rate (CDR) as the percentage of borrowers entering repayment on loans in a fiscal year and subsequently defaulting (or meeting other conditions) in that same fiscal year or the next fiscal year. Refers to the Department of Education’s Sample Default Management Plan issued June 2001.

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Proposes schools form a Default Prevention Team. Outlines four aspects of borrower contact for schools: (a) communicate while student in school; (b) pursue those who leave without notice; (c) communicate during their grace period (letting student keep their e-mail for two years); (d) identify and contact delinquent borrowers. Includes a section describing the process and advantages of schools providing Late Stage Delinquency Assistance and suggests a possible Early Stage Delinquency Prevention approach for schools that includes timely reporting of student separations, outreach to dropouts and counselling potential dropouts earlier in the process. Lein, L. , Richards, R. & Webster, J. Student Loan Defaulters Compared with Repayers: A Texas Case Study. NASFAA Journal of Student Financial Aid, Vol. 23 (1). Spring 1993. pp. 29 - 40. Studying small samples of state technical institute students, as well as students from a number of proprietary schools, found that default is positively associated with lack of awareness of deferment provisions. Sources of information about loans were shown to influence the likelihood of default. The researchers concluded that the effects of loan counselling were both large and beneficial. Lochner, Lance & Monge-Marango, Alexander. Education and Default Incentives with Government Student Loan Programs. Preliminary paper. December 2003. A preliminary report on research analyzing default patterns of 2,796 undergraduate borrowers who graduated from college 1992-93 and didn’t go on to graduate school, with data from the Baccalaureate and Beyond Surveys. It was found that default rates for men and women are nearly identical, while rates increase with amount of educational debt. Default behavior varies across undergraduate majors, but those differences disappear when controlling for debt and earnings. Surprising, it was found that the relationship between SAT/ACT test scores and default was U-shaped, with default rates highest for the most able (quartile 4), with the rate for the least able (quartile 1) being quite close. Students in the middle 3rd quartile had the lowest default rate. Lombardi, Anthony & Marsh, Adele. Meteor and Mapping Your Future: Informing Students and Default Aversion Assistance. Presented at the US Department of Education Electronic Access Conference, Orlando. 2004. Available at: http://www.ifap.ed.gov/presentations/04EACSession28.html The section on Mapping Your Future describes the website, the topics it covers for students (Planning a career, selecting a school, and paying for school) and its intended audiences. It also outlines those parts of the website that assist with default prevention, including the Online Student Loan Counselling (OSLC),

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Financial Fitness Tools (10 Steps) and four Calculators - Repayment, Consolidation, Budgeting and Debt/Salary Wizard. McMillion, Robin. Student Loan Default Literature Review. Texas Guaranteed Student Loan Corporation. December 2004. Available at: www.tgslc.org/pdf/default_lit_review.pdf A very comprehensive review of literature that describes research into factors which may play a role in government student loan defaults. It includes material on (a) college success variables (graduation, GPA, continuous enrolment, number of hours failed); (b) college experience variables (college major, attendance factors, class level, student employment; exit counselling); (c) post-college variables (unemployment, income, personal & family, loan repayment factors, knowledge of repayment obligation, repayment after default); (d) background characteristics of borrowers (gender, age, ethnicity, family background and income, academic preparedness, borrower attitude); (e) debt (level of indebtedness, perception of debt); (f) school-type variables; (g) loan servicing factors; and (h) default definition and trends. The author concludes that, whereas much of the early research on student default looked at the association between borrower or institutional characteristics and default behavior, the general finding of most researchers today is that success in post-secondary education plays a larger role in predicting who will default than does either the borrower’s background or the type of institution they attend. He suggests that, all else being equal, students who are successful in their studies tend to have lower default rates that those who aren’t. He sees this as hopeful, given his conclusion that loan repayment seems to hinge on factors that are at least to some extent under the control of the borrower and/or the school. Monteverde, Kirk. Managing Student Loan Default Risk: Evidence from a Privately Guaranteed Portfolio. Research in Higher Education, Vol. 41. No. 3. 2000. pp 331 - 352. Begins with a comprehensive review of previous research on loan defaults, indicating that there appears to be general consensus among investigators that the determinants of student loan default are primarily borrower-based rather than linked to the borrowers’ school of attendance. The current study looked at 60,000 students who had loans under a privately guaranteed Law Access Loan program that provides funds to law school students at American Bar Association-accredited schools. Concludes that loan repayment is basically a matter of the borrower’s ability and willingness to repay. An individual’s credit bureau score was found to be an effective predictor of the probability of default. While the study identified a statistically significant association of school of attendance with graduates’ default risk, it is suggested that the statistical school effect may be a

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result of graduates’ ability to repay their loans, based on a school’s location, its reputation and the labour market in the region. Mortimer, John (Personal correspondence) Senior Policy Advisor, Student Support Branch, Ontario Ministry of Training. Colleges and Universities. 2006. Researched an extensive body of literature and conduced studies on government student loan default using data on repayable debt, student loan post-study income and other administrative data. Concluded that, overwhelmingly, research indicates that student success in the labour market (sufficient income and employment) is the primary determinant of government loan default. Also found that the significance of post-study income can be moderated if borrowers revise the term of their loan or participate in the Interest Relief program during periods of unemployment or low income. In the context of an individual institution, determined that graduates will typically have more success in the labour market and higher repayment rates than non-graduates. Warned that this does not mean, however, that repayment rates of graduates will necessarily be high. For example, the overall graduation rate for private career colleges may in some case be higher than graduation rates for public institutions, yet default rates for students from private career colleges can be higher than graduation rates for students from public career colleges. Outcomes Working Group. Short Stay Summary Report. Spring 2003. Available at: http://outcomes.bcstats.gov.bc.ca/Publications/collegereports/Short_Stay.pdf

The 2003 BC College and Institute Short Stay Pilot Survey collected data on the outcomes of former students who left public colleges, university colleges, and institutes after completing a relatively small number of courses-between 9 and 23 credits. The survey collected data on these former students' overall satisfaction with their institution, objectives for enrolling, reasons for leaving, employment outcomes, and further studies. Six BC institutions participated in the survey :the University College of the Cariboo , Okanagan University College, Douglas College, the BC Institute of Technology; Selkirk College and North Island College. Respondents rated a number of possible reasons for leaving, with the top three factors being (a) they had completed all the credits needed or intended; (b) they changed their mind about their program or job goals; and (c) they transferred or qualified for admissions elsewhere. When asked for their main reason for leaving, the 23 % of short stay students said they left early because they had completed their program, or completed courses they wanted or needed, in many cases, to transfer to another program or institution. 16% said they left for employment and 11 % said their main reason for leaving had to do with finances and affordability. Of the leavers, 27% dropped or withdrew from one course and

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18 %, dropped or withdrew from two or more. 18% of the early leavers indicated they had failed two or more courses. 46% of the early leaves took some further studies.

Pierson, John, Schmidt, Connie & LeBorys, Ben. Reducing Delinquency and Default. Presented at the US Department of Education Federal Student Assistance Electronic Access Conference, Orlando. November 2004. Available at: http://www.ifap.ed.gov/presentations/04EACSession08.html The first section “How Schools Can Help” is an early version of the presentation made by Craig Rorie and John Pierson at the NASFAA 2005 Conference. [See above listing.] The second section “The Guaranty Agency Perspective” by Connie Schmidt outlines how GA’s work in cooperation with schools to reduce default through four strategies of education, communication, retention and restoration. The ‘education’ component helps students manage their money and control debt, using web and electronic default prevention information and sources such as “Mapping Your Future”, and “Meteor”. The ‘communication’ component refers to keeping in touch with students and counselling. Retention is a school-based component described as including the identification of high-risk populations, monitoring Satisfactory Academic Progress (SAP), counselliing potential ‘early leavers’ and providing additional instructional support. The last component “restoration” refers to getting defaulted borrowers back on track through initiatives such as the Default Rescue Program. The third section “Why is LSDA Working?” by Ben LeBorys outlines the advantages of schools providing Late Stage Delinquency Assistance to their former students. Reference is made to the LSDA User’s Guide and the new Department of Education’s LSDA Report which provides a school with contact information on Direct Loan borrowers from their institution that are between 241 and 260 days delinquent on their loan payments. LSDA Tips for Success are included and statistics on LSDA rescued borrowers for fourteen schools using it, ranging from 25% to 70%. Podgursky, Michael, Ehlert, Mark & Others. Student Loan Defaults and Enrolment Persistence. NASFAA Journal of Student Financial Aid, Vol. 32, No. 3. 2002. pp. 27 to 42. This describes a model of student loan defaults using a panel data file, which was created by merging student loan administrative data, higher education enrolment and performance data, as well as ACT test data for a large group of first-time, full-time degree program students entering Missouri two-year and four-year public post-secondary institutions. Borrowers were followed from 1992 to 1999 to determine who defaulted on their loans. While a number of factors were identified as relating to defaults, the variable with the largest effect on the likelihood of default was continuous enrolment. It was concluded that students who are continuously enrolled or who completed their program are far less likely

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to default than students who drop out during the same period. The potential use of the model is suggested for targeting default prevention resources at students at risk of default. Rodgers, Dan. Defaults by Degree. Presented at the NASSGAP/NCHELP Financial Aid Research Network Conference. San Francisco, June 2004. Outlined a joint study by the Colorado Student Loan Program and the Colorado Commission on Higher Education. Borrowers who withdrew were found to be almost eight times more likely to default than graduates. Those who dropped out, re-enrolled and then dropped out again had lower default rates than students who withdrew and didn’t return. Students who transfer schools and then graduate had a very low risk of withdrawal. Differences in default rates were identified by major, with the lowest default rates for the sciences and the highest rates for vocational training. Concluded that it was most effective to target default aversion efforts on students who withdraw Rorie, Craig & Pierson, John. Reducing Delinquency and Default: How Schools Can Help. Presented at the National Association of Student Financial Aid Administrators Conference, New York. July 2005. Available at http://www.ifap.ed.gov/presentations/05NASFAADefaultPrevention.html Describes school-based strategies to reduce default rates, including the establishment of a Default Prevention Team composed of a senior school official, representatives from all relevant offices and a student representative. Indicates strategies should be targeted at those who are most likely to default: (a) students who fail to complete their program or leave early; and (b) students who fail to respond to repayment counselling by lenders, guaranty agencies or direct loan servicers. Advises F. Aid office staff to work with faculty, administrators and student success specialists to support students to complete their programs. In the case of early leavers, stresses the importance of being able to contact dropouts immediately. Suggest that students who don’t respond to lender, GA or DL Servicer loan counselling will more likely respond to financial aid offices following Late Stage Delinquency Assistance strategies. Includes tips to be used by financial aid administrators providing LSDA. Ryan, L. D. California State University Loan Defaulters’ Characteristics. NASFAA Journal of Student Financial Aid, Vol. 23 (2), Summer 1993. pp. 29 - 42. Found that loan repayment is positively associated with borrowers’ understanding of loan obligations and knowing their rights and responsibilities under the loan terms.

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Seidman, Alan. A Retention Formula for Student Success. and College Student Retention: A Primer. Center for the Study of College Student Retention. 2004. Slide shows available at: http://www.cscsr.org Proposes a retention formula for student success in college: Retention = early identification + (early + intensive + continuous) intervention. Stresses the importance of involvement of faculty and the campus community in a college’s retention efforts, and suggests establishment of a campus Retention Committee. Discusses three models related to student retention: Tinto’s concepts of separation, transition and integration; Astin’s student involvement theory, and Witt’s person-environment fit theory. Outlines details of early identification approaches, both prior to and after enrolment and describes approaches to the intensive and continuous intervention parts of the retention formula. Seifert, Charles & Worden, Lorenz. Two Studies Assessing the Effectiveness of Early Intervention on the Default Behavior of Student Loan Borrowers. NASFAA Journal of Student Financial Aid, Vol. 34, No. 3. 2004. Available at: http://www.nasfaa.org/Annualpubs/Journal/Vol34N3/Seifert.PDF Short-term and longitudinal studies were carried out to evaluate the effectiveness of an early intervention program implemented by the Advocate Unit of the New York Higher Education Services Corporation. The unit received lists of recently withdrawn borrowers and had staff contact each borrower with information on available repayment options and make referrals to external support organizations if appropriate (e.g. Department of Labour for job enhancement strategies or not-for-profit credit and debt counselling agencies for debt management and budgeting assistance.) Results for the short-term, two-year study provided strong evidence that an early intervention program can positively impact the default behavior of student borrowers. The longitudinal study supported this conclusion, although the positive effects had diminished somewhat over time. Strauss, Linda & Volkwein, J. Fredericks. Predictors of Student Commitment at Two-Year and Four-Year Institutions. Presented at the Annual Meeting of the Association for the Study of Higher Education, Richmond, VA. November 2001. The predictors of institutional commitment were studied for over 8,000 students at 128 two-year and 23 four-year public institutions. An underlying principle of the study, identified in earlier research, was that institutional commitment is a precursor or predictor of student persistence behavior. It was found that the most important student variables influencing such commitment were academic growth and development, financial attitudes and being in receipt of financial aid, with the

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pre-college characteristics of age, ethnicity and marital status also being significant predictors of commitment. US Department of Education, Federal Student Aid. Ensuring Student Loan Repayment: A National Handbook of Best Practices. 2001. Available at http://ifap.ed.gov//eannouncements/0118nhbook1web.pdf Based on the US Department of Education’s first Student Loan Repayment Symposium held in October 2000, the handbook summarizes trends in student loan defaults and describes best practices throughout the life of student loans: (a) before a student enrolls in college; (b) between enrolment and repayment; and (c) at the repayment stage. The sections on best practices during the in-school and payment periods include not only the descriptions of specific practices in current use, but gives a contact person for follow-up purposes. The last chapter summarizes proposals made by symposium participants for improving the student loan programs, including (a) providing flexible government due diligence requirements to allow a new emphasis on ‘profiling’ or ‘targeting’ to focus on borrowers most likely to default; (b) establishing incentives to encourage all partners in the loan process (schools, guaranty agencies, students) to maximize repayment. For schools, incentives could include regulatory relief for high-performing schools, public recognition of successful programs, sharing in the savings realized through reduced defaults with partners, and paying an administrative allowance to schools based on their loan volume so they can enhance service during the in-school and repayment periods. Examples of incentives for students include rewarding students who start payments early, either while they are in school or during the grace period, and providing tax incentives for employers so they can offer a pretax payment as a fringe benefit. Includes an annotated bibliography. US Department of Education. 2005/2006 FSA Handbook. Available at: http://www.ifap.ed.gov/IFAPWebApp/currentSFAHandbooksYearPag.jsp?p1=2005-2006&p2=c The Federal Student Aid Handbook Volume 2 - School Eligibility and Operations, Chapter 6 (Providing Consumer Information) includes a Loan Counselling section from page 2-98 to 2-106 that describes the required and suggested elements of entrance and exit counselling US Department of Education, Federal Student Aid. Sample Default Prevention and Management Plan. September 2005. Available at: http://www.ifap.ed.gov/dpcletters/GEN0514.html

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This is a new version of the Department of Education’s Sample Default Management Plan initially published in 2001. It provides schools with activities, techniques, and tools to promote student and school success and reduce federal student loan defaults. Schools newly participating in Title IV federal student aid programs, as well as those having undergone a change in ownership, are required to implement default prevention and management activities. The activities include (a) Early Stages of Enrolment (entrance counselling; financial literacy for borrowers; early identification and counselling of students at risk; default prevention communication campus-wide; and dedicated default prevention and retention staff; (b) Late Stages of Enrolment (exit counselling; service to students who withdraw; timely and accurate enrolment reporting; (c) After Students Leave School (updating National Student Loan Data Service DER (Date Entered Repayment) report; Early Stage Delinquency Assistance (ESDA); Late Stage Delinquency Assistance (LSDA); maintaining contact with former students; reviewing the school data provided on the Loan Record Detail Report to ensure accuracy of student contact and loan information; analyzing defaulted loan data to identify defaulter characteristics. Recommendations for enhanced entrance and exit counselling are given, as well as a comprehensive list of web resources that describe tools for schools to ensure data accuracy and employ effective loan counselling and default prevention and management techniques. Volkwein, J. Fredericks & Others. Characteristics of Student Loan Defaulters Among Different Racial and Ethnic Groups. Presented at the Annual Forum of the Association for Institutional Research, Boston. May 1995. Includes a summary of previous research on the characteristics of defaulters. The current research analyzed data from the 1987 National Post-Secondary Student Aid Study, comparing default among Whites, Asians, African Americans, Hispanics and Native Americans. It concluded that default behavior can be substantially predicted by the pre-college, college and post-college characteristics of individual borrowers, rather than the institution attended. It was found that differences among different racial/ethnic groups are more a matter of degree than kind, and that three variables, degree completion, marital status and dependent children are more important in predicting default than race or ethnic group, grades earned and the choice of major. College GPA was found to be a strong predictor of default behavior for whites, not minorities. The findings suggest that schools can best assist their student borrowers by creating an environment that promotes good academic performance, encourages study in pure and applied scientific disciplines, and ensures degree completion. Volkwein, J. Fredericks & Szelest, Bruce. The Relationship of Student Loan Default to Individual and Campus Characteristics. Presented at the Annual Forum of the Association for Institutional Research, New Orleans. May 1994.

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A theoretical framework for this research was developed based on four perspectives: theories of human capital and public subsidy; borrowers’ ability to pay, organizational structural/functional approaches; and student-institution fit models. Data from three national databases were merged for the study: the 1987 National Post-secondary Student Aid Study of federal financial aid recipient; the Integrated Post-secondary Education Database System of campus characteristics and the College Board Survey. No support was found for the hypotheses that institutional characteristics have an impact on student loan default. Significant influences on default behavior were found to be predictable from borrower characteristics - one pre-college characteristic (race), two college measures (major and GPA) and three post-college measures (highest earned degree, marital status and taxable income). Suggests that government policy and practices holding institutions accountable for the defaults of their students is counterproductive and it is unfair to blame institutions that serve risky borrowers for default behavior that may occur years after students have left the campus. Volkwein, J. Fredericks & Szelest, Bruce. Individual and Campus Characteristics Associated with Student Loan Default. Research in Higher Education, Vol. 36, No. 1. 1995. pp. 41 - 72. Summarizes the same research outlined in Voklwein & Szelest (1994), addressing the question of whether student loan repayment and default behaviors are more highly related to the characteristics of the college attended or to the characteristics of the individual student aid recipient. Indicate that majoring in a scientific or technological discipline, earning good grades, persisting to degree completion, getting and staying married, and not having dependent children are all actions that significantly increase the likelihood of repayment. In two populations (all borrowers and those at non-proprietary schools), they found virtually no evidence of a direct link between default behavior and type of institution or highest degree offered. On the other hand, they report that more than half the defaulters are students who attended proprietary schools, pointing out that proprietary school borrowers appear to be importantly different from borrowers at accredited degree-granting colleges and universities. They point out the paradox that the federal government not only allows, but encourages institutions to give loans to students who are poor credit risks, and then blames the institution when they default. Indicates that their model demonstrates that educational institutions, especially propriety schools, serving high-risk student borrowers and offering them lower levels of training and education can expect to have relatively high default rates. Concludes that individual borrowers, rather than institutions, should be held accountable for high default rates, since much default behavior results from factors that are clearly beyond school control, like broken marriages, dependent children and future earnings. Warns that institutions, concerned about high default rates of their students and the impact it may have on their institutional future due to government policy, may look to simplistic admissions indicators that may predict and screen out likely loan

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defaulters - with the result that at some accredited two-year and four-year colleges, educational opportunity for deserving students could be diminished. Concludes with advice that their model suggests schools can best assist their student borrowers by creating a climate that promotes good academic performance, encourages study in both pure and applied scientific disciplines, and ensures student degree completion. Volkwein, J. Fredericks & Szelest, Bruce. Factors Associated with Student Loan Default Among Different Racial and Ethnic Groups. Journal of Higher Education, Vol. 69, No. 2. March/April 1998. pp. 206 - 237. This provides an analysis of National Post-secondary Student Aid Study data for 11,000 student borrowers at 1,400 institutions. Borrowers with similar earned degrees, marital status and number of dependent children showed similar levels of income and loan default, regardless of the ethnic group. Among the findings - working while in college appeared to have lowered default by 7 ½% for non-white borrowers, but didn’t influence black borrowers. It was also found that lacking knowledge about repayment obligations was not a serious problem, given over 90% of borrowers surveyed understood the loan should be repaid. Less optimistic was the fact that one in four was confused about the payment process and three of four were not aware of loan deferment options. The authors conclude that their overall findings dispute national policy and suggest campuses assist student borrowers by promoting good academics performance and degree completion. Woo, Jennie. Factors Affecting the Probability of Default: Student Loans in California. NASFAA Journal of Student Financial Aid. Vol. 32, No. 2. 2002. pp. 5 - 23. Factors that predict default in the Federal Family Education Loan Program were examined by linking a database of California student borrowers with background financial and demographic information and post-college employment data. The study identified several factors as strong determinants of default (a) student background demographic and financial characteristics; (b) leaving school without a degree; (c) having low wages after leaving school; and (d) experiencing unemployment. Controlling for these socioeconomic variables, an analysis showed that vocational schools, particularly privates, are more likely to have students who default on their loans.

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Additional Web-based Default Prevention Resources for Financial Aid Administrators Canadian Bankers’ Assocation Your Money Website Among the resources included in There’s Something About Money website is a pop quiz on money matters, a budgeting tool, and a ‘Credit 101’ module. The website serves as a portal to the YourMoney Network which includes links to a large number of websites relating to money matters for young people and their parents. http://www.yourmoney.cba.ca/eng/index.cfm CanLearn Website Developed by Human Resources and Skills Development Canada in collaboration with provincial and territorial governments, the CanLearn website is a one-stop on-line resource for students and their families to plan, save and pay for post-secondary education. Among the many components are: a Financial Knowledge Assessment, a Debt Management Quiz, a Financial Planner including an Education Cost Calculator and Budget Estimator & Planner, and Loan Repayment Calculator. http://www.canlearn.ca Mapping Your Future Website Mapping Your Future is a public service website providing career, college, financial aid and financial literacy information and services. It provides high school and post-secondary students and parents information about planning a career, selecting a school, paying for post-secondary education, as well as preparing for life after college. It includes entrance and exit On-line Student Loan Counselling (OSLC) for Stafford and Perkins Loans. A special section for financial aid professionals includes a list of default prevention and debt management techniques. Sponsored by a group of guaranty agencies participating in the US Department of Education’s FFELP (Federal Family Education Loan Program), this award-winning website is found at: http://www.mapping-your-future.org NASFAA Financial Aid Night and Counselor’s Materials The National Association of Student Financial Aid Administrators (NASFAA) has developed materials for financial aid administrators and high school counsellors taking part in Financial Aid Nights. The materials include: Guide to Planning and

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Conducting a Financial Aid Night and Financing Education Beyond High School, a financial aid presentation script and PowerPoint slide show providing the basic information students and parents need to know when applying for financial aid. Available at http://www.nasfaa.org/subhomes/financialaidnight/FANight.asp National Default Prevention Listserve Hosted by Rutgers University, this is a forum for all those involved in financial aid to exchange ideas on default prevention issues. Includes regular postings by the US Department of Education Federal Student Assistance office. To subscribe, send a message to: [email protected] with this command in the body: SUBSCRIBE [email protected] Your Name (do not put anything in the subject line) Tools for Schools: Effective Practices Database The database is a part of the US Department of Education’s Federal Student Aid Quality Assurance Program and located on the IFAP website (Information for Financial Aid Professionals Library). While it initially became operational in the early fall 2005, QAP staff expect the volume of school submissions to increase in 2006. The database is a mechanism for schools to share financial aid management practices that work well on their campus. Among the school-based practice categories is ‘Default Management’ The website can be found at http://www.ifap.ed.gov/IFAPWebApp/qualityassurance/AppendixD.jsp Tools for Schools: FSA Assessments School Default Management Web Module This is one of five modules developed by the US Department of Education’s Federal Student Aid Quality Assurance Program to support key school management tasks. Through a series of statements, questions and links to additional resources, it is designed to assist schools manage their cohort default rates and to prevent students from defaulting on federal student loans. The module can be located at: http://www.ifap.ed.gov/qamodule/DefaultManagement/Default Management.html USA Funds Best Practices in Debt Management Online Manual This manual provides suggestions and tools to assist financial aid administrators with their school’s debt-management and default-prevention efforts. It is organized into keys for successful debt management and best practices for each stage of the life of a loan: (1) application and loan origination; (2) in-school

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period; (3) grace period; (4) repayment period. Includes a guide for developing a default management plan and a sample plan. The manual is located at: http://www.usafunds.org/financial_aid/debt_management/best_practices/index USA Funds Education Access Report This electronic newsletter sponsored by USA Funds, offers financial aid administrators and lending professionals weekly updates on the latest education/access and higher education finance issues and trends. A previous newsletter “Debt Management Perspectives” has been incorporated into the Education Access Report. This section provides information on programs that campuses are using to prevent defaults, debt management updates and the latest news about workshops, consultations and other programs of offered through USA Funds’ debt management initiative. The website includes the current issue of EAR, plus an archive of all former issues. The Education Access Report can be found at: http://www.usafunds.org/news/aboutear/index.htm USA Funds Debt Management Forum This forum was established by USA Funds to promote the sharing of best practices in debt management and education loan default prevention among financial aid professionals. Campus-based financial aid professionals can post questions and share challenges, sources and best practices regarding debt management for students and former students, as well as techniques and practices that help prevent defaults on federal education loans. Financial aid administrators wanting to subscribe to the list can do so by sending an e-mail message to [email protected] with the following text in the body of the message: subscribe debtmanagement your e-mail address USA Funds Solving the Retention Puzzle: Best Practices in Student Retention Online Manual This manual helps campus administrators solve the student retention puzzle by offering resources, tools, checklists and case studies in successful retention practices. The manual is located at http://www.usafunds.org/financial_aid/debt_management/solving_retention/index

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Appendix B: Selected ‘Tools’ for Use in Post-secondary Institutions This section describes specific strategies and tools that can be used by post-secondary institutions to improve the government student loan repayment of their students. It includes ideas that emerged from the surveys of student aid administrators across Canada and the developments in the ten provinces and territories, as well as approaches and resources found on the many websites in the US and Canada that are targeted at improving financial literacy in general, improving the knowledge students and their families have about student aid/loan opportunities and obligations, and increasing student success in post-secondary studies. These ideas are organized into (a) overall default management planning; (b) before post-secondary; (c) early stages of enrolment; (d) in-school and late stages of enrolment; and (e) after students leave school. In many cases, either a website reference is included or an actual document is referred to and attached at the end of this appendix. Overall Default Management Planning There are a number of helpful resources to assist a post-secondary institution prepare and implement a default management plan 1. USA Funds’ Default Management Plan: http:///www.usafunds.org/financial_aid/debt management/best practices/keys to success/develop_plan/sample_plan/index.htm 2. US Department of Education Sample Default Prevention and Management Plan: http://ifap.ed.gove/dpcletters/GEN0514.html 3. The Federal/Provincial/Territorial Working Group on Designation’s Default Prevention Plan outlined in Best Practices Guidelines: “School Tools” for Improving Repayment Performance. See attached Document #1 (p. 107- 111) for a copy of this plan. Before Post-secondary 1. NASFAA Financial Aid Night & Counselor’s Materials, which could be used as a template for Canadian schools, with expanded reference to the student loan repayment requirement and the implications for student loan borrowers: http:///www.nasfaa.org/subhomes/financialaidnight/FANight.asp

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2. Workshops offered to students (and parents) to provide information on financing education, identifying repayable and non-repayable sources of assistance, including specific information on student loan obligations and the consequences of default. See attached Document # 2 (p. 113) for an outline for a 3-hour workshop. ‘Paying for College and University’. 3. Mapping Your Future’s downloadable PowerPoint presentations about repayable and non-repayable student aid for use with high school students. These could be customized for the Canadian context and the specific post-secondary institution: http:mapping-your-future.org/mhsc/ 4. The award-winning FinAid website’s helpful ‘Student’s Financial Aid Checklist’, which includes important ‘to do’s’ starting with the junior year of high school. This could also be adjusted to fit the Canadian context, including reference to repayable student loans and non-repayable forms of assistance: www.finaid.com/students/checklist.phtml 5. A Grade 9 to 12 checklist of things students need to do to plan for post-secondary can be found on the Government of Alberta’s Learning Clicks website: http://www.alis.gov.ab.ca/LearningClicks/checklist.asp 6. Financial aid and financial planning information distributed to Grade 12 students by college and university high school liaison reps when visiting schools. 7. Student Success courses established by colleges and universities can be delivered at high schools. 8. High school graduates who have gone on to post-secondary can provide very useful information to students nearing completing of grade 12 by sharing information about ‘things they wish they’d known when entering post-secondary’. An example of this is information developed by a Vancouver-area school. See attached Document #3 (p. 113). 9. Publications (hard copy or web-based) on costs and financing of post-secondary can be made available to prospective students. One example is the University of British Columbia’s ‘Financing Your Education’ module on the Awards & Financial Aid Office website, which provides a comprehensive look at planning starting with ‘goals and values’, an interactive costs and resources worksheet, and key information on options to investigate when the student discovers a budget shortfall. See http://students.ubc.ca/welcome/finance.cfm

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10. Referring students to web resources such as: Comprehensive Financial Planning Workbook, created by the University College of the Fraser Valley, in co-operation with the Province of British Columbia: http://www.ucfv.ca/fineaid/cfpe.htm (http://www.ucfv.bc.ca/future/cfpe/CFPE.htm) The Canadian Bankers’ Association YourMoney website which has a section There’s Something About Money incorporating a pop quiz on money matters, a budgeting tool, and a ‘Credit 101’ module, a well as a portal to the YourMoney Network which includes links to a large number of websites relating to money matters for young people and their parents. http://www.yourmoney.cba.ca/eng/index.cfm CanLearn, which includes a number of tools for students and parents, including a financial planner, an Education Cost Calculator, an on-line budget planner, and several quizzes (ones dealing with Financial Knowledge Assessment, Financial Fitness and Debt Management): http://www.canlearn.ca Early Stages of Enrolment 1. Admissions policies ensuring only qualified students are admitted to the institution, sufficiently prepared to have a good chance of success. 2. Effective pre-entry programs offered to bring students’ knowledge and skills to the level required for success before entry to post-secondary level programs. An example is the Laurentian ‘Introduction to University Program’ offered to students who don’t quite meet entrance requirements, which allows students to register in 60% of a full course load (to meet government student assistance requirements) and supplement their post-secondary courses with non-credit courses in areas such as study skills. 3. The Financial Aid office could present special targeted information sessions on student assistance to students nearing completion of pre-entry programs. 4. Ensuring the institution’s Financial Aid Office is pointed out or a stop on any student tours of the campus. 5. Financial Aid information can be sent to all students with their offer of admission. 6. In order to establish a relationship with the Financial Aid office prior to admission, applicants can be e-mailed the name and address of ‘their financial

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aid officer’, with instructions on how to apply for government student loans and other student assistance. 7. Setting up a Financial Aid office table/kiosk at campus fairs, on orientation and student services days, and at Open Houses to provide information to new and prospective students on financial assistance. 8. Orientation sessions, including key information on student aid and financial planning/budgeting, can be offered during the summer months. An example is Canadore College’s “Beat the Rush’ program. 9. For students who are not able to attend Orientation sessions in-person, a web-based version can be established. Douglas College’s on-line orientation, which includes information on the Financial Aid office, can be found at: http://www.douglas.bc.ca/new-students/student-orientation/index.html . 10. The Financial Aid office can sponsor ‘financial aid awareness weeks or days’ to focus students’ attention on important information on student aid and financial literacy issues. This can be done in co-operation with the campus student association/government. 11. Financial Aid office staff members can visit classes at program starts, to introduce their role and provide general information about student assistance. This can be particularly useful for programs that commence at non-standard times of the year and those that have been identified as having students with high default rates. 12. Offering ‘student success’ or ‘first year experience’ programs that include components such as study skills, time management, writing college/university-level research papers, library research, critical thinking, personal and career planning and transferring to other institutions. Including a module in ‘student success’ or ‘first year experience’ programs built around one of the financial literacy programs such as: Mapping Your Future’s Financial Fitness Tools, particularly the Ten Steps to Financial Fitness: http://mapping-your-future.org/features/dmtensteps.htm AES’ Common Cents Tour: http://www.youcandealwithit.com/faas/default.html CanLearn’s Financial Knowledge Assessment, Financial Fitness and Debt Management components: http://www.canlearn.ca

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13. Hiring students as Peer Counsellors to assist with financial literacy programs on topics such as budgeting, money management and credit, which can be offered to the general student population or targeted to specific areas such as residence students. 14. Establishing a student-staffed ‘Student Mentoring Centre’, and encouraging the centre to refer clients to the Financial Aid office for information on student assistance. 15. Entrance Counselling when students obtain their first government student loans, either through group sessions, individual in-person interviews, or via on-line versions. The counselling could include:

• a review of the terms and conditions of the loans; • a review of borrowers’ rights and responsibilities; • a review of policies relating to withdrawals and failures; • notification that there are various repayment options, including some for

students running into problems when they are repaying their loans; • a review of the consequences of default; • a reinforcement of the importance of keeping comprehensive loan records; • a reminder of the importance of communicating change of status and

contact information to the institutional financial aid office and the student’s loan service provider(s);

• a referral to a student loan budgeting/financial planning website such as CanLearn;

• a suggestion for students to review Canada Revenue Agency’s student-related income tax policies, specifically student deductions and credits via: http://www.cra-arc.gc.ca/tax/individuals/segments/students/menu-e.html

An on-line version of entrance counselling for Alberta students is available on the Edulinx website at: https://www.edulinx.ca/ABDLWeb/en/entrance_intro.html 16. In cases where students pick up their government student loan documents from the institutional Financial Aid office, an information sheet can be included with the documents that outlines key points about the student’s responsibilities, particularly the importance of updating the Financial Aid office if there is any significant change in their personal circumstances (e.g. program change, dropping courses or withdrawing, change to marital status or substantial change to their financial situation.) Students can be reminded of the importance of ensuring the Financial Aid office is notified of any address or contact information changes. 17. Providing students with Murray Baker’s The Debt-Free Graduate, which can be ordered through: http://www.debtfreegrad.com/pages/debtfree_cnd.html

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18. Using various incentives to encourage students to attend financial literacy or student loan counselling sessions, including: • making sessions mandatory, prior to issuing loan documents • prize draws (eg. copies of the Debt Free Graduate, gift certificates to the

campus bookstore or food services) • serve food, snacks etc. • issue some form of limited passes to special access to financial aid office

services • use of comedy skits, including interactive ones, presented by senior students. 19. Issuing student loan borrowers a folder, initially filled with important financial aid and student loan information, but mainly focussed on encouraging student to use it keep all copies of correspondence and documentation about their loans. See sample of the folder used by Durham College and the summary page used by their students to list their student loans as they receive them - attached Documents # 4 and # 5 (p. 114 and 115). 20. Use of institutional financial aid websites, to provide important information about all types of repayable and non-repayable assistance, plus give reminders about key dates relating to students’ government loans. Such sites can incorporate interactive exercises such as McMaster University’s ‘Budgeting Bonaza Game’ found at: http://sfas.mcmaster.ca/budgeting/budgetbonanza.htm In-school and Late Stages of Enrolment 1. Post-secondary institutions could have their Institutional Research departments do research to develop a ‘profile’ of defaulters in their schools, when student-based default data is available at their institution. The results could be used to target specific strategies to this at-risk group. 2. Institutions can establish a Student Retention or Student Success Committee with representatives from key areas of the campus, including the Financial Aid Office, to develop strategies specifically targeted at retaining students in general and at-risk students specifically, and to evaluate their implementation. 3. Encouraging the development of a co-operative ‘student services referral network’ on campus, such that front-line and professional staff from various services across campus meet at least once a year to share key information about their services and how to refer students to access them. Invitations to participate in such a referral network should be broadly-based whenever possible, incorporating people and departments that might not necessarily be defined as a ‘student service’. These could include the broader student support community such as Registrar’s Office staff, academic advisors in faculties/schools and chaplins.

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4. Training students, including those on Work Study programs, to act a peer helpers or tutors to assist students having academic difficulties. 5. Workshops can be offered several times each term on topics such as budgeting, reducing living expenses, and searching for outside scholarships. 6. Articles can be included in the campus student newspaper on topics as outlined in item 3. 7. Establishing an automated ‘degree audit program’ to allow students to track their education plan, monitor their own progress and to allow for intervention by student services if they stray from their education plan. 8. Developing an information sheet outlining the requirement for students to maintain a sufficient course load (usually 60%) for government loan eligibility. See attached Document # 6 (p. 116) used by the University College of the Fraser Valley. 9. Rapid follow-up on students dropping courses or withdrawing:

• course add/drop form advises student loan borrowers to contact the Financial Aid office;

• for those institutions with on-line course withdrawals, a ‘pop-up’ box appearing when students attempt to withdraw on line, advising them to contact Financial Aid;

• academic advisors remind students dropping courses to see the Financial Aid office if they are government loan/grant recipients;

• institutional student data systems set up to provide automated reports/notifications to the Financial Aid office when students withdraw from courses or their program;

• staff in the Financial Aid office make telephone contact with students who are withdrawing from courses or programs;

• an information sheet (or e-mail) is sent to all student borrowers who are withdrawing, with information relevant to their student loans. See attached Document #7 (p. 117) which is the notice sent out by the University of Toronto;

10. E-mail reminders can be targeted to students who have previous student loans but are not continuing to borrow, alerting them to the need to keep their previous loans in interest-free status. 11. In the case of colleges and institutes with vocational job training programs, the Financial Aid office could establish agreements with some of these programs to be able to refer high-need students for services (e.g. to Auto Service departments for emergency car repairs with no labour charges, for students commuting long distances).

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12. Students identified by faculty for non-attendance or potential failing grades are contacted by the financial aid office to discuss implications for their student aid. 13. Exit counselling when students are nearing graduation from their program or when they drop below the course load required to retain government student loan eligibility. Provided through one-on-one in-person interviews or on the phone, in group sessions or via on-line versions, this counselling could include:

• a review of information given in entrance counselling, including repayment obligations and the consequences of default;

• a review of repayment options, including programs for students having difficulties repaying;

• emphasizing the importance of ensuring the government loan service centres(s) they are dealing with have their current contact information;

• a reminder to continue maintaining a comprehensive record of all correspondence and documents about their student loan(s).

14. A success program could be established for students who have been placed on academic probation, whereby they are allowed to return to studies but are required to meet with a counsellor to identify a plan for success, signed by both parties. This plan would establish the responsibilities of the institution to provide remedial assistance and the responsibilities of the student to meet specified requirements that will support their success. 15. Student Loan Repayment presentations or ‘Exit Workshops’ are given to graduating students, in conjunction with the federal government’s National Student Loan Centre. These can include information on how to handle student loans after graduation and options if the student is not able to repay. Students who don’t attend these presentations can be sent a ‘sorry you couldn’t make it’ letter, together with an information sheet covering loan repayment information. 16. A kiosk can be set up in a high visibility area on campus towards the end of the academic year, staffed by Financial Aid office representatives and/or the National Student Loan Centre. 17. A series of posters put on campus bulletin boards, or other creative locations such as the back of washroom doors, similar to the AES series of entertaining posters including “Default on Your Student Loan and Watch Good Credit Go Bad”. See http://www.fp.ed.gov/fp/attachments/activities_whatsnew/DA1202.ppt 18. A letter or e-mail sent to graduating students with government loans, providing information on government loan repayment and programs for students having difficulty repaying, plus contact numbers for student loan service centres. An invitation can be included to contact the Financial Aid office.

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19. An information sheet on student loan repayment could be included with graduation diplomas/credentials. 20. Use of the college/university’s intranet and student e-mail for targeted, timed messages re important student loan information such as reminders re maintaining interest-free status and loan repayment obligations and options, plus advertising for loan repayment presentations or exit workshops. 21. Information about government student loan consolidation, repayment processes and repayment assistance can be included in student newspapers towards the end of the academic year. 22. Encouraging the use of the CanLearn website to assist students with financial planning and calculation of loan repayment scenarios. The Loan Repayment Calculator can be found at: http://srv650.hrdc-drhc.gc.ca/cslp-pcpe/cl/30/lrc-crp/nlindex.jsp?langnslsc=en&bundle=stu 23. Assisting students to reinstate previously defaulted loans to put them back in good standing so they will be able to access debt management tools and additional funding in order to complete their studies. 24. The Financial Aid office visits loan-eligible programs that are nearing completion, to inform students about the loan repayment process and the importance of keeping loans in good standing, to provide handouts giving contact information for student loan service centres and to give instructions to students on how to update their address with the loan service centres. This can be particularly helpful for programs that graduate students at non-standard times of the year or for those programs that have been identified as having high default rates. 25. The Director/Manager of Financial Aid could meet with the chairpersons of programs whose students have high default rates to discuss strategies for informing students about their student loan responsibilities. 26. Presentations can be given by the Financial Aid office to faculty and staff, providing information on the services offered to students and explaining how to refer students for help. After Students Leave School 1. Students leaving the college/university can be asked to complete a ‘exit survey’, asking about their reasons for leaving and the extent to which financial

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issues drove their decision to leave. This type of survey can be expanded to be used for students who are expected to return to school in the fall, but don’t. 2. Letting students maintain their college or university e-mail account for at least six months after they leave school so that e-mails can be sent through the campus intranet to students who are graduating. 3. Effective student employment and placement programs, offering assistance finding career employment, writing resumes, handling job interviews, could be offered to alumni as well as students still in school. 4. Encouraging students to return to speak with Financial Aid office staff when they receive their notice of student consolidation, particularly if they don’t understand what it means or can’t start paying. Students can be helped to navigate repayment processes and debt management tools. 5. Considering involvement in a Late Stage Delinquency Assistance Program, whereby post-secondary Financial Aid offices contact students who are about to default. Approaches to LSDA recommended by the U.S. Department of Education include:

• a ‘soft touch’ focusing on assisting the student, not collecting the loan • calling at different times of the day • mailing hand-written notes • using contact information from several sources • sending out information on repayment options and programs for students

having difficulty repaying • connecting the student with the loan service centre in a three-way call

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The following Default Prevention Plan (pages 107 - 111) is an excerpt from the document Best Practices Guidelines: “School Tools” for Improving Repayment Performance prepared by the Federal/Provincial/Territorial Working Group on Designation, 2005.

Introduction

In the Designation Policy Framework, it is acknowledged that post-secondary educational institutions play a key role in managing the financial risk to student loan portfolios via their role in providing a quality education to the borrower and preparing them for their chosen career. From the time that students start their studies to the time they graduate, post-secondary educational institutions are a critical point of contact and support for the students. During a program of studies, post-secondary educational institutions have multiple opportunities to interact with students and ensure that they understand all their academic and financial obligations with respect to their education. It is in this role that the Federal and provincial governments feel that post-secondary educational institutions can play a greater and increasingly positive role in students’ academic lives and obligations (including student loans).

Improving Repayment Performance –A Default Prevention Plan The purpose of student loan financing is to produce a product: a student borrower who will be a payer, a success personally, financially, and socially. To do so requires efforts at every stage of the student’s school and employment experience and prevention is crucial in avoiding default. In turn, default avoidance carries a positive lifelong impact on the personal life of each student—and on society in general. Default prevention can be seen from two perspectives: 1. mitigating factors that cause default and 2. supporting factors that promote good repayment behaviour. Factors causing default include: • Poorly informed of financial aid information • Poor understanding of loan obligation and terms • Withdrawal from school • Unmanageable non-education debt • Family status • Personal and financial management. • Unemployment/Low income relative to debt obligations Factors supporting repayment include: • Good understanding of loan obligations and terms

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• Clear admission criteria • Completion of program • Employment/adequate income to meet debt obligations • Well prepared for personal and financial management From these two sets of factors, key areas can be targeted when developing a default prevention plan: • Borrower Education • Alliance Building • Leveraging Technology • Personal and financial management • Loan obligation enforcement • Student Retention • Employment Initiatives/Services A default prevention plan based on some or all of these factors will help improve student success, increase repayment rates, and make the student’s experience a more positive one.

Key Components of a Default Prevention Plan

Borrower Education Starting with clear admission criteria, the post-secondary educational institution can ensure that a “good fit” is established between a prospectus student and a program of study. Once a student has been admitted to a program, providing comprehensive entrance and exit counselling sessions is an excellent way to educate students on the rights and responsibilities of borrowing a student loan. This type of interactive session creates an environment in which the borrower can ask questions and voice concerns. A requirement for students to attend yearly review sessions can reinforce the information covered during the entrance counselling session. 1. Enhanced Entrance Counselling • Invite loan specialists and lenders to present at the sessions. • Distribute materials containing loan information to the borrowers for future

reference. • Provide counselling on:

Responsible borrowing Budgeting, Debt management plans, Repayment options, Salary expectations.

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• Provide access to information, where available, on graduation rates, graduate employment rates and default rates by institution and program

• Delay certification of loan applications until first time borrowers have attended a session.

• Offer sessions intermittently throughout the semester to promote attendance. • Offer one-on-one entrance counselling to students who cannot attend group

sessions. • Meet with borrowers at the end of the semester/program to identify students

who may need additional counselling. 2. Review Sessions • Discuss with students information about their loans including:

Cumulative amount borrowed, Estimated interest, Estimated monthly payment.

• Confirm with students that they have received a recent loan summary. • Update students on changes in financial aid office procedures. • Remind students of their rights and responsibilities. • Gather updated information from students, including:

New addresses and telephone numbers, Changes in their permanent addresses, Reference information, and

• Cover the consequences of default and what the borrower can do to avoid it. • Provide borrowers with online entrance counselling sites where available by

lenders and service providers. • Direct students to online websites where updates to student information can

be performed. 3. Enhanced Exit Counselling • Invite lenders and service providers to present at sessions. • Include and emphasize the correct procedures transfer students should follow

when notifying their lenders that they have transferred and in applying for interest free status.

• Provide students with the most up to date information on the names and phone numbers of lenders and service providers.

• Offer one-on-one exit counselling to students who cannot attend group sessions.

• Let students know they can call the school for assistance, provide them with the name and phone number of a contact person.

• Verify that all exit interview forms are completed in full. • Send borrowers a letter or brochure if they were unable to attend an exit

counselling session during their grace period reminding them of their rights and responsibilities and listing phone numbers to call for assistance.

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Alliance Building

For an institution to successfully improve its repayment score, it must have the support of its own campus in addition to lenders and service providers. Forging alliances facilitates learning and promotes progress.

Work Closely with Other Campus Departments to Promote Positive Repayment Behaviour

• Stress the importance of default prevention to upper administration and

request their assistance in helping secure resources. • Make default prevention a priority for the entire financial aid office by

educating front counter staff and advisors on default prevention measures. • Invite placement office counsellors to present at exit sessions. Work Closely with Outside Agencies to Promote Default Prevention • Participate in pilot programs. • Take advantage of services where offered by lenders and service providers,

such as entrance and exit counselling via the web. • Invite industry experts to train financial aid office staff on default prevention

methods. • Contact the provincial loan program and request any tools/information that

may be available to help counsel borrowers. • Assist with skip tracing activities.

Leveraging Technology Internet Access • Create a financial aid web page for students to view and use as a

reference. • Provide links for students to other financial aid and scholarship sites. • Provide computers for students to use, either in the lobby of the financial aid

office or in a lab setting, to access financial aid information online. Email • Use email to communicate with borrowers and/or parents in the form of

newsletters on a semester basis. • Ask the school’s administration to allow students to use their school e-mail

addresses for up to two years after leaving school to keep in contact with borrowers.

• Encourage students to use e-mail as a way to communicate with financial aid office staff and service providers.

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Student Retention Reducing attrition is a key factor in preventing default, as those borrowers who do not complete their program are more likely to default on their loan. Student retention should be dealt with systematically throughout the institution rather than through isolated policies implemented by various departments or sections of an institution. Some best practices with respect to retention are: 1. Academic Advising

• Academic advisors should strongly encourage their advisees to make efforts

to establish memberships in the social communities of their collegiate institution.

2. Administrative Policies and Procedures • Have effective methods for the communication of rules and regulations

important to students. 3. Withdrawal Management Plan Develop a withdrawal management plan to ensure that those students who do leave the institution before completing their program are informed of their responsibilities with respect to their student loans. • Establish formal withdrawal procedures that require “sign off” by the financial

aid office before a student is allowed to withdraw. This will ensure proper counselling on loan repayment obligations.

• Offer transfer scholarships or gift aid to provide students with incentives for re-enrolling.

4. Monitoring of Graduation Rates by Program Institutions that monitor program graduation rates will be in a better position to identify, rectify and/or eliminate programs that have low repayment rates improving overall institutional performance.

Employment Initiatives/Services • establish/enhance an employment resource centre which includes job

postings, job search websites, resources on resume writing and interview skills

• Monitor the performance of programs with respect to graduate employment rates and graduate’s other labour market outcomes (e.g. post study income) through graduate employment surveys.

• Enhance relationships with employers of former graduates and other potential employers.

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Workshop: Paying for College & University Format: Three-hour presentation Brief Description: Strategies for identifying and applying for government student assistance and other financial aid available to college and university students. Covers types of aid, both repayable and non-repayable, eligibility criteria and tips on how to complete application forms, Useful for high school students and parents, as well as those planning to attend post-secondary after a period away from school. Outline: 1. Introduction 1.1 Objectives of presentation 1.2 Cost of attending post-secondary 1.3 Differences between repayable and non-repayable aid 1.4 Differences between ‘need-based’ and ‘achievement-based’ assistance/wards 2. Student Aid for Full-time Students (Each described in terms of award amounts, eligibility criteria, how to apply and where to get more information) 2.1 Government student assistance

• Canada Student Loans, including repayment obligations & repayment options • Provincial Loans & Grants

2.2 College and University awards • Entrance & transfer awards • Bursaries • Scholarships & other merit-based awards

2.3 Canada Millennium Foundation Excellence Awards 2.4 Awards with special criteria

• Affiliation awards • Students with disabilities • Women students • First Nations students

2.5 High school and community-based awards 2.6 Incentive programs 2.7 Sports awards 2.8 Work Study 2.9 Canada Employment Insurance funding

3. Student Aid for Part-time Students 4. Student Aid for Upgrading Programs 5. Other ways to help pay for college and university 5.1 Registered Educational Savings Plans 5.2 Co-operative Education programs 6. Conclusion 6.1 Student budgeting 6.2 Where to go for more help

• helpful websites • financial aid offices at colleges and universities

J. Orum 2005

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[University of Toronto Notification sent to all borrowers who have withdrawn] ______________________________________________________________________ Surname Given Name S.I.N. The Ministry of Training, Colleges and Universities has recalculated your OSAP entitlement due to a reduction in your course load during the current academic year. OSAP requires that students maintain a course load of 60% in each semester to continue to be eligible for assistance (40% course load for students with a permanent disability). OSAP does not allow course loads to be averaged over two semesters to equal 60%.

Canada Student/Ontario Student Loans will become repayable SIX months from ______________________________________.

Your lender(s) will be notified of this change. It is your responsibility to set up a monthly repayment schedule with your lender(s) and ensure your address is up-to-date. Unable to Repay Canada/Ontario Student Loans? If you are unable to repay your student loans due to lack of employment, illness or disability, you should investigate the Interest-Relief Program. Applications are available from the National Student Loans Service Centre 1-888-815-4514. Detailed information is available at http://osap.gov.on.ca and http://canlearn.ca/nslsc/ Return to School and Reinstate to Interest-Free Status If you return to school in at least 60% of a full-time course load (40% with a permanent disability) for at least 12 weeks, you can reinstate your interest-free status on outstanding Canada/Ontario Student Loans. Have your College/Faculty complete a Continuation of Interest-Free Status (Schedule 2) after classes begin. This form notifies the National Student Loans Service Centre, your bank and the government of your registration. Satisfactory Academic Progress OSAP recipients must successfully complete 60% of a course load in each semester (40% for students with a permanent disability). Failure to meet this criterion will lead to OSAP probation. Subsequent failure in a second period of study will lead to a loss of OSAP funding for a minimum of 12 months.

OSAP Overpayments Can Affect Future OSAP Funding More Information: http://osap.gov.on.ca

National Student Loans Service Centre 1-888-815-4514 For OSAP loans borrowed prior to September 2001:

- CIBC National Student Centre 1-800-563-2422 - Royal Bank Student Loan Centre 1-800-363-3822 - Bank of Nova Scotia Student Loan Centre 1-888-284-3044