TASFAA Community Blog
Managing Your Cohort Default Rate:
Contacting Student Borrowers
By Dave Macoubrie, Vice President of Repayment Solutions
Each February the U.S. Department of Education issues draft cohort default rates. For some this is good news as their hard work has been validated by a lower cohort default rate. However, for others this is the first time they may be concerned about the trajectory of their cohort default rate.
For those concerned, the following questions may come to mind:
Budgets, campus-wide participation, staffing or other concerns may make it easier or more difficult to address some, all or none of these. However, if you’re considering default prevention, what are your options?
1. Do it yourself;
2. Hire an expert vendor;
3. Use a combination of efforts.
If you’ve decided to perform default prevention, it’s important to know what the road ahead looks like. Working with delinquent borrowers has its own unique set of challenges. When they first came to the school they were excited and eager to attend. Now they have left school through withdrawal or graduation. They may have forgotten about their student loans or may not even know they are delinquent; but if they do, they may be apprehensive to communicate out of fear, embarrassment, or other emotions. Each borrower’s response is based on his or her unique individual experiences.
The first step is to locate the borrower. One of the first things many students do after leaving school is change addresses. Your ability to locate the student and speak with them has a direct impact on your ability to counsel students. As such, skip tracing is an important function of any default prevention effort. This can be done by calling references, online web searches, social media, or hiring a service. Each of these has pros and cons from cost to staff commitment. However, they are all necessary if you want to connect with students.
Determine your contact strategy and formulate a plan. Will you be mailing letters, sending emails or making phone calls? Once you decide on a contact strategy, make sure your letters, emails and scripts for phone calls are legally sound by consulting your legal counsel.
Before getting started, here are a few questions you might want to consider:
Who will perform this service on you campus? If you are planning on having staff do this, there are secondary questions which should be answered:
Counselors can only provide information, but they can’t solve the issue. As such, many vendors use a “warm transfer” process where you, the borrower and the servicer are on the line at the same time, and the servicer helps with the resolution before anyone hangs up. While this is more expensive and takes more time on the call, this effort creates a significant increase in the number of borrowers who complete the resolution agreement.
Quality control and continuous evaluation will help to prevent future liability. By recording all calls and randomly reviewing a percentage of selected calls, you can evaluate compliance. Many vendors use a form of batch tracking to track when accounts become delinquent and how many were resolved.
In addition, this system also tracks the history of conversations, letters sent and calls made. This can be done using a spreadsheet if you have a low number of borrowers. However, a more sophisticated system is needed if you have many borrowers.
As one might imagine, counseling borrowers who are delinquent on their student loans can be a challenge. There are many things that need to be considered to properly tackle default prevention. These are just a few of the questions that should be considered:
Performing successful outreach not only requires the right strategies and processes, but it may also require working with a partner to help you achieve your goals and objectives. For a comprehensive checklist to contacting borrowers, click here. More information can be found at Inceptia.org.
Submitted by Dave Bowman, Regional Marketing Director
Great Lakes Educational Loan Services, Inc.
For some students, April 15 seems like just another day. For others, the thought of filing their income taxes can be as intimidating as a final exam. Fortunately, there are some helpful answers you can share with your students to make tax season less stressful, keep them in good standing with the IRS, and maybe even help them earn a refund in the process.
Whether or not students need to file a tax return depends on their gross income, filing status, and age. If they're single, under 65, and claiming themselves as an exemption for the 2013 tax filing year, they must file if their gross income was at least $10,000. If they can be claimed as a dependent on someone else's tax return, single, and under 65, they must file if they meet one of the following criteria:
And, just because a student isn't required to complete a tax return doesn't mean they shouldn't. If money was withheld from their paychecks, they should file. It's possible they'll get back most or all of what was withheld.
The following forms of income count for students filling out a tax return.
W2: A W2 is the United States federal tax form issued by employers that states how much an employee was paid and the amount of taxes withheld from their paychecks in the previous year. The amount of taxes withheld is based on the withholding status determined by the W-4 form that's filled out when an employee begins a new job. An employee's withholding status takes into account marital status, dependents, and whether or not the employee wishes to have more than the standard amount withheld from each paycheck.
1098-E: The 1098-E is a form filed with the IRS that details the amount of interest paid on qualified student loans during the previous year. Students may be able to deduct all or part of the interest paid on qualified student loans, which could reduce the amount they pay in income tax.
1040: The 1040 form is the standard IRS form individuals use to file their annual income tax returns. Taxpayers use this form to disclose their financial income status for the previous year in order to determine whether additional taxes are owed, or whether the taxpayer is due for a tax refund.
1040EZ: The 1040EZ form is an alternative to the 1040 income tax form and offers a faster, easier way to file taxes. It's most often used by taxpayers with simple tax situations.
Students have a variety of options available to them when filing their tax return.
In Person: In addition to local accounting firms, there are numerous tax preparation companies that advertise during tax season. For a small fee, students have the opportunity to work with a tax professional who will complete their income tax returns and walk through the process with them. This may be beneficial for first-time filers, or students with complicated financial situations.
Online: Many tax preparation companies also offer their services online. Some of these companies even allow for simple forms, such as the 1040EZ, to be filed without charge. This option is great for students who want to file their own taxes quickly and cheaply.
VITA: For students who want to tackle their income tax returns on their own, there are still some safety nets available to them. Many schools work with Volunteer Income Tax Assistance (VITA), a national organization that offers free tax assistance for simple tax questions and has many branches available on college campuses. If your students have questions about their tax returns, find out if VITA is available near you.
For additional information, check out Publication 17, Your Federal Income Tax available from http://www.irs.gov.
A TASFAA Legacy
By Cherry Johnson
Close your eyes and remember your first TASFAA conference, your second and maybe even your third. Are you remembering being overwhelmed with rules and regulations, acronyms, and people you didn’t know so well? I do.
I remember my first TASFAA Conference in 1987. Saying I was nervous would be stating my feelings mildly. When I said I would move from recruiting to administering financial aid, I meant to try very hard. But there was so much hidden fear in that determination … no one else doing financial aid at my small school, no one to ride with to the annual TASFAA Conference, share a room, eat meals alongside or calm my jitters. That is until I met Ann Tinnon.
Ann seemed to look across the crowded room and see me! A novice, an unknown attendee, a shaking in her shoes hiding behind a slight smile first time conference goer. She approached, smiling, looking me in the eye, extending her hand and saying quite sweetly, “Hello, I am Ann Tinnon.” My feelings of being a frightened financial aid professional speck were immediately relieved. Ann walked me around introducing me here and there, assuring and encouraging me, and becoming my friend. I learned through the next few years this was just Ann’s operating mode. She cared about our Association and her TASFAA friends and peers as well as many, many students.
I am thrilled the Ann Tinnon Scholarship is being revitalized and newer TASFAA members are being introduced to Ann. We should be spotlighting her legacy of caring for TASFAA, the Association, its members, and the students we serve. Ann and so many other wonderful financial aid professionals may have departed from us too quickly, but they did bestow their legacy of caring. Let’s remember and keep carrying that gift as a light into the future.
Please Support the Ann Tinnon Scholarship Fund and Share A TASFAA Legacy
Loan Repayment Strategies Part 1: Help your Students Choose the Right Plan for Success
There are many repayment options available to help students plan for and successfully repay their student loans. Do you know which plans are right for your students? Research indicates that borrowers are more likely to successfully repay loans when they have selected a plan that fits their needs. This webinar will illustrate for you which of the seven repayment plans, including consolidation, will help them enter and successfully complete the repayment process.
Specific topics covered include:
• The 8 available repayment plans – who qualifies and how?
• Pros and cons of each plan
• Borrower scenarios to help you with your loan counseling
• Techniques for helping your students develop a repayment strategy
March 4th @ 3:00 PM, Eastern timeLoan Repayment Strategies Part 1: Help your Students Choose the Right Plan for Success
Loan Repayment Strategies Part 2: Understanding Forgiveness, Forbearance, and Deferment
During the loan lifecycle, students may need to use the available Forgiveness, Forbearance, and Deferment Options as part of a successful repayment strategy. Do you know how to counsel students about when and how they can and should use these options? This webinar will help you understand how students qualify for these borrower options and when they provide the most benefit to their successful repayment strategy.
• Understanding deferment, forbearance, and forgiveness options
• Pros and cons of each option
March 5th @ 3:00 PM, Eastern time Loan Repayment Strategies Part 2: Understanding Forgiveness, Forbearance, and Deferment
Professional Judgment Perplexities
Professional Judgment helps you target funds to students with exceptional need. But Professional Judgment principles must be applied wisely and responsibly in order to be effective and compliant.
This participatory session reviews complex case studies to show how you can help students get the aid they need by making adjustments to either the expected family contribution (EFC) or the student’s cost of attendance.
March 6th @ 12:00 PM, Eastern time
March 25th @ 3:00 PM, Eastern time
Crafting an Effective Default Prevention Plan
Cohort Default Rates are expected to rise at many schools. A comprehensive default prevention plan is an essential starting point for improving student loan outcomes. This session will cover the basics, including why your school needs a plan and the resources available to help you develop one.
March 6th @ 3:00 PM, Eastern time
Financial Aid for Beginners
Learn the basics of financial aid and gain an understanding of how different programs work and how financial need is determined. This session will review how students apply for financial aid and how the Free Application for Federal Student Aid (FAFSA) fits into the application process to help you better respond to the needs of your students and help them see that a college education is possible.
March 11th @ 12:00 PM, Eastern time
March 18th @ 3:00 PM, Eastern time
Understanding the FAFSA: It All Starts Here
Get a comprehensive overview of the FAFSA. This session steps you through the FAFSA line by line. We’ll help you feel comfortable assisting your students so they can correctly complete this crucial first step to receiving federal financial aid.
March 11th @ 3:00 PM, Eastern time
March 18th @ 12:00 PM, Eastern time
Applying Federal Methodology
How is a student’s financial need determined? Learn how Federal Methodology is used to calculate a student’s Expected Family Contribution (EFC)undefinedand be able to calculate an EFC. You’ll be better prepared when making financial aid awards.
March 12th @ 12:00 PM, Eastern time
March 19th @ 3:00 PM, Eastern time
Understanding the Verification Process
Baffled by the complexities of verification? This session will give you the information you need to simplify the verification process into three easy steps. We’ll also define some common issues found during the review process and how you can resolve them.
March 12th @ 3:00 PM, Eastern time
Understanding the Verification Process
March 19th @ 12:00 PM, Eastern time
Database Matches: Resolving Common Comment Codes
This session reviews how the database matches following FAFSA completion impact student aid eligibility and what you can do to help resolve any issues that arise. Leave feeling confident about resolving C-codes and conflicting information.
March 13th @ 12:00 PM, Eastern time
March 20th @ 3:00 PM, Eastern time
Loans I: Understanding the Basics
Learn the basic details of the different federal loan programs so you can better understand, process, and encourage your students to make good borrowing decisions.
March 13th @ 3:00 PM, Eastern time
March 20th @ 12:00 PM, Eastern time
Loans II: Helping Students Succeed in Repayment
Gain a deeper understanding of preparing students for repayment. This session will cover borrower options for repayment and the consequences of default. You’ll come away with a thorough knowledge of loan basics that will help you educate your students on the impact of borrowing student loans.
March 14th @ 12:00 PM, Eastern time
March 21st @ 3:00 PM, Eastern time
Six Tips for Connecting with Millennials
By Miran Saric
Inceptia Marketing Intern and Graduate Student
When it comes to communicating with the millennial generation, you may be flooded with an abundance of communication channels that could simultaneously set you up for misunderstanding.
Because many millennials are at a key point in their lives -college and post-college years - it is critical to reach out to them in order to assist them in a period where many important financial decisions need to be made. Millennials themselves are often misunderstood and viewed as an age group that’s difficult to connect and communicate with, but by taking the right steps to contact them you can develop a healthy and successful relationship.
Here are some suggestions to effectively reach millennials and start discussions on their finances and student loans.
Don’t water down your message. Due to the instant messaging and 140-character-limit age we live in, one might be tempted to scale down their message to the bare minimum in order to grab millennials’ attention. However, this is an ambitious and intelligent generation that appreciates intelligent discourse. As the Pew Research millennial study states, “Millennials are on course to become the most educated generation in American history, a trend driven largely by the demands of a modern knowledge-based economy, but most likely accelerated in recent years by the millions of 20-somethings enrolling in graduate schools, colleges or community colleges in part because they can’t find a job.” This is why
discussions with them must be of intelligent nature.
Embrace social media. Reports vary in stats, but the majority state that at least 90 percent of millennials use social media and well over 50 percent use smartphones. This is a rich environment for fostering dialog that allows for two-way conversation and an opportunity to engage with your organization. Not only can you start a conversation, but by posting links and flexible content you give millennials the opportunity to further share your posts and increase your following and exposure.
Reach out at all hours of the day. Millennials are plugged-in 24/7 thanks to mobile technology and social media. If you have any updates, reminders and information to share, then schedule them on social media at all hours without any hesitation. However, be prepared to respond in a reasonable amount of time to keep the conversation going.
Don’t overload this age group with information. You’re not the only one who has social media available to them 24/7, so be aware that millennials’ attention spans will be put to the test. If you feel that you’re posting too much information, target individuals who need the most attention and instant message them. Nearly every social media platform allows for individual, private messages, so use them to your advantage
Interactive media is a must. Rather than telling millennials about the grace period process, for example, show them what to do through a short video. Include infographics as often as possible and photo sharing sites such as Instagram are booming in popularity. The best thing about interactive and rich content is that it’s usually inexpensive to create and is easily shareable.
Remember millennials are career and future-oriented. When reaching out to them, seek to aid them, show them how your program or services cannot only help them in the immediate sense but also how it can set them up for future successes. Focus on the gratification aspect of your relationship and what you can do for them.
When reaching out to millennials to discuss finances and financial educations, do not be afraid to use all methods available. Millennials are receptive to communication as long as you employ their preferred methods and in a manner in which they’ll appreciate. For more research on this generation, visit the Pew Research Millennial Generation research center. It’s slightly dated but still provides excellent data on this generation.
……….. Ann Tinnon.
As many of you are aware, the TASFAA President each year presents a scholarship award to a student at their institution. I remember as TASFAA President in 1995-96 presenting that award to two Vanderbilt students who worked as work-study assistants in the Office of Student Assistance. It was a small award at that time, but each received $250.00 and expressed such gratitude.
For many years the award was simply the “TASFAA Presidential Scholarship”. But, that changed in 1993 when TASFAA suddenly lost a dear friend and colleague, Ann Tinnon. To honor her, the TASFAA Board changed the name to the “Ann Tinnon Memorial Scholarship”. I remember when I told Peyshun and Kelly that they were receiving the “Ann Tinnon Memorial Scholarship”, I told them about Ann and what Ann had meant to me, to the financial aid profession and to TASFAA.
So, over the next few weeks leading up to the Spring TASFAA Conference you as current TASFAA members will learn a great deal about the beautiful and talented Mrs. Tinnon.
She most recently touched my life in January of 2013, when I lost my husband of 44 years. Many of my family, friends and TAFAA colleagues were asking what they could do to honor him. I pulled out a Memory Box that he had given me for our 25th Anniversary, and discovered there the answer to those questions. He believed in my career choice, and always said my career was really and truly my calling. He had placed in that box all of the Thank You notes that I had received from students and their parents over the years. I pulled that box out often when I became discouraged with the hustle and bustle of financial aid. There I found a copy of an old TASFAA CROSSFEED newsletter containing a picture of Ann.
I asked that anyone who wanted to give to make a contribution to the “Ann Tinnon Memorial Scholarship”. And, many of you who will be reading this did just that.
A brief history of Ann”
Beginning with the 2014-15 academic year, the awarding process for the Tennessee Student Assistance Award (TSAA), the state’s need-based grant program, will change. Applications with a completion date (an application that is complete and error free) by March 1 will be considered. The maximum Expected Family Contribution (EFC) will remain at 2100.
Below is a summary of the awarding process:
o Applicants with a zero EFC will be given first priority.
o If funding remains after awarding zero EFC students then awards will be made to applicants with EFCs greater than zero.
Students should continue to complete the Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov as early as possible after January 1. If you have questions about the new awarding methodology, please contact Naomi Derryberry at (615) 253-7478 or email@example.com or Tim Phelps at (615) 253-7441 or firstname.lastname@example.org.
Contact Us: email@example.com