A Day in the Life
A Day in the Life of Default Prevention
with Shelia Dunlap, Assistant Vice President of Default Prevention
Here to Help
TG's Default Prevention team helps borrowers in repayment find the resources and tools they need to avoid defaulting on their student loans. Helping a borrower avoid default requires balance and sensitivity and a real desire to meet customers' needs.
Shelia states, "Our primary task is customer service. Our mantra is— 'We're here to help.' Our message is we're available to provide the borrower with information to help that borrower reach a successful repayment."
Counseling is a large part of Default Prevention's efforts, but educating borrowers and providing assistance to schools and lenders requires a good part of the team's time as well. Using a variety of resources, this dynamic and multi-faceted team sees the opportunity to be pro-active above and beyond its everyday processes, all the while keeping an eye on the objective—to get delinquent borrowers back on track.
As with every successful process, the right resources—specifically, human resources—need to be in place first. Getting a borrower back on track requires certain qualities in a team member. Default Prevention team members must have a strong background in customer service or experience in a call center, but must also possess good listening skills, patience, and understanding. Team members recognize that default aversion cannot take place without first establishing a dialogue with the borrower.
Shelia comments, "I see a certain pattern of caring and camaraderie among the team. What they exhibit on the floor is what is passed on to our customers."
A typical day in Default Prevention begins when lenders and servicers notify TG, through a Default Aversion Assistance Request (DAAR), when specific borrowers are at least 60 days delinquent in repaying their student loans. The default prevention counselors then provide default aversion assistance to those lenders and servicers. The team does this by beginning a correspondence and call campaign to return borrowers to a current repayment status.
Assisting with that effort, Default Prevention's Support Services unit makes necessary corrections to the DAARs and handles all incoming and undelivered return mail. The Borrower Locate unit finds and updates borrower accounts containing incorrect contact information. This service is also provided for TG Collections, as well as TG's lender and servicer partners. Default Prevention's Correspondence unit works with borrowers on a number of issues as the liaison between the borrower and the lender or school.
All members of the Default Prevention team are trained to counsel borrowers, which enables the team to efficiently cover the huge daily influx of incoming calls from borrowers. This unit also finds ways to streamline processes that help the borrower with more than delinquency issues.
Rises to the Occasion
Default Prevention's goal is to help borrowers through any situation that it can. This may mean advising the borrower about deferments or forbearances, or it may mean helping a borrower or borrower's family member with issues outside of the typical loan issues.
Shelia explains, "We try to pass along information from other sources that might help that borrower stay in school or enter repayment. Likewise, we try to give the borrower help in overall life skills that might help them on a personal or professional level."
Furthering that goal, the Pre-delinquency unit, Default Prevention's newest call center (scheduled for launch on June 3, 2002), is designed to help maximize TG's Voluntary Flexible Agreement (VFA), signed by the Department of Education last year. Among other incentives provided to TG under the agreement, the VFA provides incentives for delinquency prevention. The Pre-delinquency team will concentrate on borrowers who have just left school and are in their grace period. This unit is the first line of defense against default, or in this case, a defense against the borrower becoming delinquent in the first place.
Beginning this summer, pre-delinquency counselors will contact borrowers with tools and resources they can use to make informed decisions about repayment before going into delinquency. Counseling may include ways to get the borrower back into college, or if necessary provide them with information about continuing their postsecondary education at a junior college or technical school.
Shelia adds, "If that fails, then it's back to talking to them about repayment. We'll prepare the borrower for repayment by making sure the borrower knows who his or her lender/servicer is, discussing the borrower's repayment schedule, and determining if the borrower can afford his or her payments after the grace period ends. If necessary, we'll give the borrower the information he or she needs to defer the loan immediately without ever getting into the delinquency cycle."
The Pre-delinquency team will also serve as a resource for schools that need assistance using TG's reports, the Default Management Report that is based on the cohort year, and the Electronic School Report that shows borrowers who are currently delinquent.
Part of the focus of the Pre-delinquency team is to keep TG's calculated cohort default rates down by targeting borrowers most at risk of defaulting on their loans.
To identify borrowers who most need the team's help, Default Prevention tracks high risk borrowers—typically students who have dropped out of school or have never made their first loan payment. TG Research and Analytical Services has developed a scoring model using sophisticated statistics that allow TG to predict the likelihood of borrowers defaulting.
Default Prevention continually monitors trends in repayment behavior. Shelia explains, "We see different things like more consolidations when a borrower has a high balance, so we have dedicated a campaign to looking at loans with higher payoff amounts. We look at the things coming through our operation that cause us to change focus."
Staying current with technology is vital to the team since calls are routed to representatives continuously throughout the day. TG's Customer Technology Services shares insights on technological needs based on the call center's calling trends and suggests ways that the team can use that technology more efficiently.
Other areas in TG also partner with or provide assistance to Default Prevention. Working together, these teams help to get the Default Prevention message out to the community. For example, Default Prevention co-sponsors projects with the Educational Alliances team and the Strategic Partnerships team.
Default Prevention's Default Aversion Consultants, Joe Braxton and Clarissa Baize, as a part of the Achieving Systemic Default Aversion (ASDA) program, lead default aversion intervention teams, serving as liaisons to schools. ASDA's main purpose is to help schools lower their cohort default rates.
The team also works in conjunction with other industry organizations to communicate the default aversion message and find new and better ways to move that message forward.
A Model for Self-help
Ultimately, Default Prevention helps borrowers help themselves. Default Prevention uses customer surveys to gather input about the services they provide to borrowers. Here are some customer responses to recent surveys:
- "Since I am out of work, he understood my problems; and he helped me so much."
- "I left the phone conversation with TG feeling like I wasn't a complete loser, and I think I'm current with my debt now."
- "My TG default prevention counselor took all of that discouragement away with his caring attitude and professionalism."
At the end of the day, Shelia wants to know that the customer has received quality service and the customer's issue has come to a successful resolution. Shelia states, "I want the customer to be able to help him or herself and to feel that the interaction was positive."
More to Come
Watch for the second part to this "A Day in the Life of Default Prevention" article in an upcoming issue of Shoptalk Online. The article will explore Default Prevention's recent efforts and latest plans to promote TG's default prevention message to schools and the community. Part two of this article will also look at the efforts Default Prevention has undertaken to educate and assist its partners and customers, from partnerships with the Council for the Management of Educational Finance to assistance that Default Prevention provides to Historically Black Colleges and Universities (HBCUs) in reducing their cohort default rates.
Be sure to see the June 4 edition of Shoptalk Online for additional information on the new Delinquency Prevention Call Center.
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