2/9/2014 1 Tampa Bay Student Loan Consortium Michael J. Bennett Wayne Kruger Dameion Lovett Agenda • Discuss the “Student Loan Bubble” and the current loan landscape • What is the Tampa Bay Student Loan Consortium? • What some of the TBSLC members are doing and why – St. Petersburg College – University of South Florida 2 3 $1 TRILLION in student loan debt!
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2/9/2014
1
Tampa Bay
Student Loan Consortium
Michael J. Bennett
Wayne Kruger
Dameion Lovett
Agenda
• Discuss the “Student Loan Bubble” and the
current loan landscape
• What is the Tampa Bay Student Loan
Consortium?
• What some of the TBSLC members are doing
and why – St. Petersburg College
– University of South Florida
2
3
$1 TRILLION in student loan debt!
2/9/2014
2
2010 3 YR CDR on a national level • Three year rate rose from 13.4 to 14.7%
o Public: 13.0%
o Private not-for-profit: 8.2%
o For-profit: 21.8%
o Community College: 20.9%
• Two year average rate rose from 9.1 to 10% o Public: 9.6%
o Private not-for-profit: 5.2%
o For-profit: 13.6%
o Community College: 15%
• For this cohort, approximately 4.1 million borrowers attending 5,951 schools entered into repayment during this time and 600,545 borrowers defaulted
• Much of this continues to support the concept that we have a “repayment crisis” (as opposed to a debt crisis) when it comes to student loans
2010 3 YR CDR – National
Landscape
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Lack of funding for default aversion
initiatives on campuses
• USDE has earned $50 Billion in Loan Profit
this year!
• Will USDE invest some of the interest rate
profits in default prevention, default aversion or
a Loan Call Center?
• Financial Aid professionals are unable to adjust or deny student loans to groups of students
• As long as the school’s cost of attendance allows, schools are required to let students borrow up to their maximum and cannot put additional steps in place beyond the Master Promissory Note and Entrance Counseling
• To keep debt down and to be able to follow the guidance within Gainful Employment, FA administrators need the ability to be proactive with how much a student borrows, not “chasing after the horse when it is out of the barn”
Little help and power for schools
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Over the past three years SPC has done an extensive review of student loan debt, delinquency, and default. Our findings seem to match with national data for community colleges, but paint a very different picture than the news media
• We don’t have a loan debt problem - we have an academic advising and completion problem
• The “amount of student loan debt” is not the number one indicator of potential student default
• Community College “Access” must include an expectation of student success?
College Experience
New Student
Orientation
My Learning
Plan
Early Alert System
Career Advising
Learning Support
Financial
Literacy
and
Default
Prevention
2014
NOTE: Exit Counseling does not include “Manage Your Spending While in School.”
Lack of financial resources for most schools means having to be creative in solutions
• Free and/or low cost options don’t often show significant results but are often our only option
• Changes to the industry have left few choices for schools
• Few schools have their own default aversion programs
Most school administrators, specifically senior level management, have yet to see this as a real institutional problem
• Until default rate hits the 30% mark there are no school sanctions
• Since students who go into default are no longer students at your institution, it’s hard to get assistance for them
What schools are doing
Default Prevention Choices
• Create a Default Prevention Center with a
defined area and staffing
• Outsource Default Prevention with business
partners
• Embrace a “Hybrid Model” using the
appropriate mix of campus and business
partner resources
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Business Partners
Ceannate Corporation Nelnet
Champion College Services, Inc. North Star
ECMC Solution Services SALT (ASA)
EdFinancial Services TG
Inceptia Organization (NSLP) USA Funds
McKenzie Financial, Inc. WISS (Wright International Student
Services)
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Pilot of the Tampa Bay Student Loan Consortium • On November 19, 2012, an invitation was sent to a group of
institutions in the Tampa Bay area to share strategies, best practices, training, forms & resources in the areas of debt management, financial literacy and default prevention
• Group discussions allow a collective exploration of solutions to common problems. We become more informed about others who provide services that assist staff and students, especially as we are often working with the same students
• It also facilitates networking opportunities for staff who perform similar duties. Meeting locations rotate to member institutions, with the host institution being the main presenter, followed by other presenters on pertinent topics
Florida Initiative
• Clearwater Christian College
• Eckerd College
• Everest University
• Florida College
• Hillsborough CC
• Keiser University
• National Aviation Academy
• Pasco-Hernando CC
• Saint Leo University
• State College of Florida
• Stetson Law
• St. Petersburg College
• University of Phoenix
• University of South Florida
• University of South Florida – St. Pete
• University of Tampa
Tampa Bay Student Loan Consortium
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• Initial meeting – expectations of consortium, roundtable discussion of current practices and ideas in areas of excessive borrowing, debt management, financial literacy, and engaging other campus offices
• 2nd meeting – in-depth look at the upcoming USF “Bull 2 Bull” Ambassador program