NICC implements proactive measures to impact student loan debt default rate

In order to continue the trend of falling student loan debt default rates in the state of Iowa, Northeast Iowa Community College (NICC) has taken a proactive approach by implementing new intervention strategies and offering loan repayment services for its students.
“Students who are retained and complete a credential are overwhelmingly able to repay loans, so the college focuses our efforts on early prevention, retention and degree completion to attain a family-sustaining wage,” explained Kristin Dietzel, NICC executive director of institutional effectiveness. “Students who achieve a 15-credit threshold are much more likely to complete their program of study, graduate, obtain strong employment, repay debt and contribute to the community.”
According to a report released by the Association of Community College Trustees (ACCT) September 28, “A Closer Look at the Trillion: Borrowing, Repayment, and Default at Iowa’s Community Colleges,” 60 percent of community college students in Iowa who defaulted in FY 11 earned 15 credits or fewer.
Early intervention strategies in place at NICC include full-time enrollment specialists who work with at-risk borrowers through one-on-one communication, as well as increased, informed decision making through phone calls, letters and emails to student loan borrowers about how much debt they have and who their loan servicer is.
As one component of the college’s default prevention outreach program, NICC partnered with Inceptia in 2014 to intervene with students who are delinquent on loans before they default. As of September 17, 338 delinquent borrowers have been resolved, rather than fall into default. New financial literacy and education programs at NICC require students to make satisfactory academic progress, such as Inceptia’s Financial Avenue service. A new required first-year college experience course for students also includes a student loan education component.
The great recession increased enrollment at NICC dramatically from 2008 - 2011, and thus contributed to a rising rate of student loan borrowing. Last year, the college’s 2011 three-year default rate rose to 22.9 percent, a rate that included 322 students, or approximately six percent of the college’s non-high school student body during a typical year.
The new intervention strategies introduced at NICC are working: the college’s official 2012 three-year default rate is 18.3 percent with 293 defaulters out of 1,601 borrowers that entered repayment, which is a decrease of 4.6 percent from the 2011 default rate. Because completion and transfer keeps borrowers out of default, NICC focuses significant attention on retaining students, transfer and completion.
“Our mission includes accessibility and affordability, and we are committed to continuing an open door policy to provide education and training to even our most vulnerable student populations,” NICC President Liang Chee Wee, Ph.D., added. “Our goal is to help the underprivileged students we serve to be successful and obtain a family-sustaining wage, which allows them to also repay their student loans and contribute to the community.”
The ACCT report, “A Closer Look at the Trillion: Borrowing, Repayment, and Default at Iowa’s Community Colleges,” is a study developed jointly between Iowa’s 15 community colleges and ACCT in fall 2014. The data reveal a number of factors that contribute to student loan defaults, including: students who borrow the least are the most likely to default; many defaulters take no action on their debt, suggesting the complexity of the repayment system and a lack of information to help borrowers; a large number of borrowers - especially defaulters - are not progressing or completing a credential; and community colleges lack access to complete information and a user-friendly system to analyze loan data, making default management unnecessarily difficult.
To review the full report from ACCT, visit http://www.acct.org/news/new-report-shows-disturbing-trends-community-co....
 

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