Why Default Management Matters

In today's environment, delivering effective student loan default management is critical.

Consider the following:

Title IV programs provide the majority of financial aid
Title IV programs funded more than $144 billion to all students in academic year 2009.*

CDRs are increasing
The average institution’s trial fiscal year (FY) 2008 3-year cohort default rate (CDR) increased by as much as 5.2 percentage points over its official 2-year rate.**

Students are taking on more student loan debt
According to the Federal Reserve Bank of New York, outstanding federal student loan debt now surpasses consumer credit card debt and auto loan debt.***

Additionally, the FY 2009 national official 2-year CDR is 8.8 percent, a 25 percent increase over the FY 2008 rate.****

Schools are at risk
Schools with high CDRs can lose eligibility to participate in Title IV programs.

HigherEDGE Default Aversion Solutions can enhance your school's efforts to maintain access to federal student aid and minimize student loan default.

* Trend in Student Aid 2010-2011, The College Board
** Based on Department of Education (ED) trial 3-year CDRs released in February 2011
*** http://libertystreeteconomics.newyorkfed.org/2012/03/grading-student-loans.html
**** Based on ED official 2-year CDRs released in September 2011

As a division of TG, HigherEDGE Default Aversion Solutions benefits from TG's more than 30 years of knowledge and expertise in default aversion and student loan services.

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