1. DEFAULT PREVENTION PROCESSING MAUNAL
Ram-Onomics Program
Huston-Tillotson University
6-11-13
Copyright Antonio Holloway

2. Purpose: The purpose of the Default Prevention Program at HT is to
provide borrowers with the best customer service possible. The
Default Prevention / Financial Literacy Specialist must maintain
accurate student loan information by obtaining the most recent
information from as many sources as possible- such as, Registrar and
Alumni Affairs offices, lenders, guarantors, student employment, etc.
Preventing defaults is everybody’s business, but the office to
coordinate all activity will be in the Financial Aid Office since that office
generally has access to the most recent student loan data and is
accustomed to assisting students with student loan issues.
Goals: (1) Collaborate with internal HT departments and external
agencies on eliminating student loan delinquencies through deferment,
forbearance, or student payment*. The Default Prevention / Financial
Literacy Specialist has a vested interest in working to lower default
rates and must be dedicated to the borrower and the school; (2)
protect the integrity of the student loan program; (3) Promote student
and school success; (4) Reduce costs to taxpayers, and (5) Lower the
three year default rate to 15% and the two year default rate to 10%.
*A deferment is a legal right to postpone payment on student loans
provided the student meets the requirements for the specific
deferment. During the deferment period no interest is charged and no
payments are required. Deferments are generally universal for all loan
servicing centers. The forms may be completed online, or if completed
in the financial aid office, may be faxed to the appropriate servicer.
*A forbearance may be granted if the student encounters financial
difficulty while paying back loans. Forbearance forms may be lender
specific and interest will accrue if the forbearance is approved.
Forbearances may be granted up to 12 months. Generally the
forbearance must be completed online. The student may complete a

3. paper copy online, and print it, and then fax it to the servicer.
However, it is recommended that the forbearance be completed online
to expedite the processing.
Consequences of Default for the Student:
 Credit report damaged for a minimum of 7 years;
 Wage garnishment;
 Seizure of federal and state tax returns;
 Legal action if federal district court;
 Title IV and state aid ineligibility;
 Difficulty obtaining a mortgage and car loans;
 May be turned down for jobs;
 Loss of state occupational license; and
 Collection costs
Consequences of default for HT:
 Negative reflection of the HTs academic programs;
 Result in provisional certification;
 Result in loss of title IV or state aid eligibility; and
 Limited access to private student loans

4. Research has shown that the following activities are essential in
lowering student loan default rates:
 Keep an open chain of communication with other departments at
HT;
 Offer financial literacy courses;
 Increase student persistence and graduation rates. (all available
research shows that students are more likely to repay their loans
if they graduate and obtain employment, even if the employment
is not in their chosen field of study);
 Assist graduates and withdrawals with employment;
 Whenever possible conduct in-person exit interviews for students
who officially withdraw;
 Reporting correct graduation and withdrawal dates in the
Registrar office;
 Take attendance;
 Limit late registration for students who are struggling
academically and will not benefit from starting classes late;
 Admit the right student and encourage the student to enroll in
the right educational program;
 Early stage (repayment) assistance;
 Late state (repayment) assistance

5. Methods of Maintaining Contact (Skip Tracing):
While student is still enrolled-
 Anytime new directory information is received, the updated
information must be reported to the Registrar so that CX can
be updated.
For Withdrawals and Graduates-
 Anytime new directory information is received, the updated
information must be reported to the Registrar for withdrawn
and graduated students so that CX can be updated. For
graduated students, the information must be sent to the Office
of Alumni Affairs to that Razors Edge can be updated.
For Delinquent Borrowers-
 Contact the borrower at the last address that is listed on the
exit interview form. If contact with borrower is made, confirm
that all directory information is correct. If new directory
information is received, send updated information to Registrar
so that CX can be updated.
 If the borrower can’t be located with the information on the
exit form, perform skip tracing by calling the references listed
on the exit form.
 If contact still can’t be made contact the Registrar and Office of
Alumni Affairs to inquire about a possible updated address.
 If employment information is available contact the student at
place of employment.
 If all methods of contacting the delinquent borrower is not
successful, run a credit check on the student using Experian
skip tracing software

6. Default Management Activities How Often?
 Conduct in-person exit counseling for As students withdraw
all withdrawn students after the Director
of Financial Aid completes the RT4 calculation.
(Give the student the Ram-Onomics Exit Package)
 Report updated directory information to
appropriate offices using log sheet. Daily
 Retrieve delinquent borrower report from Every Monday
TG Advantage and USA Funds Borrower
Connect.
 Follow up with borrowers on the delinquent list Daily
And enter notes into USA Funds Borrower
Connect. Contact borrowers who are more than
179 days delinquent first. Enter all activity on the
log sheet.
 Send emails, letters, and make conference calls
with students and loan servicers. Daily
 Follow up with students who have not responded Every Friday
to emails and letters, and enter notes into USA
Funds Borrower Connect. Enter all information
on the log sheet.
 Meet with Director of Financial Aid Every Friday
 Resolve discrepancies with servicers.
(May require Director FA intervention) As needed
 Call references for delinquent borrowers As needed

7. Skip tracing procedures:
Some borrowers skip is intentional; therefore, good references will be
the key to locating delinquent borrowers who skip. You must always
think positively when contacting these borrowers.
After you reach the borrower remain courteous and positive. Identify
the social security number and date of birth, and directory information.
Ask questions in an informal manner and be friendly at all times as the
student will be more eager to cooperate. Always let the borrower
know that you are not a bill collector, and inform the student about
repayment arrangements, including making a lump sum payment to
bring the account current. If necessary make a conference call with the
student and the student’s loan servicer as forbearances can be
completed over the phone for seriously delinquent borrowers.
Work Hours:
Due to the nature of the job the position will require that you work
some evening hours as to contact delinquent borrowers after they get
off work. The following scheduled must be followed:
Monday 8:30 am to 5:30 pm
Tuesday 11:00 am to 8:00 pm
Wednesday 11:00 am to 8:00 pm
Thursday 8:30 am to 5:30 pm
Friday 8:30 am to 5:30 pm
Saturday As needed. Only when the Financial Aid Office is
participating in student workshops.