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What Does Default Prevention Mean for a Lender?
Default occurs when a student is 270 days delinquent on their Stafford Loan Payment. The consequences of default have a negative impact on a student’s present and future financial health. For instance, the default will be reported to national credit bureaus which may impact his/her’s chances of obtaining credit, or financing an automobile or house. It may also mean a person may have to pay higher interest rates, increased insurance premiums, and in some cases may impact an employer’s hiring decision. Fortunately, default can usually be avoided.
Nobody likes to see a student fail. When student borrowers go delinquent or default on the repayment of their loans, that’s exactly what happens. Many students simply don’t understand the long-term peril default places on their financial future. Successful repayment is a key step for the student in establishing a healthy financial future.
As financial partners in FFELP, lenders are in a position to help at-risk students borrowers understand the important benefits they’ll earn from debt repayment. To support this effort ISAC has developed many Default Prevention programs that are free of charge.
For students, our loan repayment information, Default Prevention materials, and Personal Finance Seminars are all designed to educate borrowers on loan repayment, default prevention and about good personal financial habits.
For Lenders, ISAC provides what many consider to be industry leading Default Prevention programs and materials designed to keep your Cohort Default Rate (CDR) in check. In fact, taking full advantage of ISAC’s default Prevention programs can actually help to DECREASE your CDR.
Cohort Default Rate (CDR) Reduction Programs for Lenders.
Using ISAC Default Prevention programs can benefit your institution. ISAC Default Prevention programs and materials promote the values of financial responsibility, and help to ensure an acceptable cohort default rate on your portfolio. High default rates negatively effect your bottom line and can jeopardize participation in Federal Student Aid programs at our school partners.
ISAC is here to help. ISAC is very active in assisting students during loan repayment. Feel free to browse the complete and robust list of Cohort Rate Reduction programs that Default Prevention Outreach and Services has to offer.
Default Prevention Outreach (Default Reduction Activities):
Default Prevention Services (Default Aversion):
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