![]() ![]() ![]() Some institutions provide in-depth assistance with money management, setting a budget, and understanding repayment options, while others provide just the bare minimum information as required by the Department of Education. While this information can help a student avoid delinquency, the type of counseling a student receives can vary greatly from school to school. Defaulters often lack financial literacyįor more than 30 years, the federal government has required student loan borrowers to receive financial counseling prior to graduation.Once on campus, providing an engaging environment in which students are both challenged and supported can also make a dramatic impact in the overall student retention rate. Informing students about the rigors of university academics before they enter school can make a huge difference in ensuring students make the right choice of institution. While there are many factors contributing to this growing crisis, five in particular should catch the attention of schools looking to decrease their Cohort Default Rates (CDR).Īccording to a study initiated by the Consumer Reports National Research Center, college dropouts comprise 63 percent of defaulted student loans and are four times more likely to default on their loans when compared to their fellow students who finished their degree. Analyzing data directly from the Department of Education, the Consumer Federation of America released a study in 2017 showing that a total of $137.4 billion in defaulted balances, a 14 percent increase from 2015. When it comes to issues facing financial aid departments, the rapid increase in student loan delinquency is the top concern for most loan professionals. ![]()
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