Southeast Community College’s student loan default rate crept up 1.1 percent from fiscal year 2008, but its FY 2009 rate of 6.9 percent is the lowest among community colleges in the state by nearly 4 percent.
SCC’s rate is based on a loan volume of $31,675,180 during the 2009-2010 award year. Those funds were distributed to 8,191 recipients. The amount of aid SCC distributes has increased dramatically the last few years as more students look to community colleges for their higher education needs, said Dave Sonenberg, dean of students/financial aid director at SCC.
In 2003, SCC’s student loan default rate was 4.1 percent. However, since that time the amount of loan dollars has increased 232 percent.
“We are intensifying our outreach efforts to include Financial Aid Days on each of our campuses, actually going into the classrooms for brief presentations and providing examples of monthly payment amounts based on loan volume,” Sonenberg said. “We are downplaying the need to over-borrow, especially considering SCC’s low tuition rates.”
Throughout each quarter, SCC’s Financial Aid Department conducts workshops to help educate students, parents and even SCC faculty and staff about how financial aid works. Sonenberg said typical questions include “Is my dependent student able to receive loans without my permission? Do loans need to be paid back? How much will my monthly payments be? Do I have to borrow the full amount of what I am eligible?”
Beyond the organized workshops, SCC Financial Aid staff conducts individual personalized sessions with students and/or parents, counseling them on all things financial aid.
The department also has branched out and conducted workshops for agencies such as the Nebraska Department of Labor, Lighthouse and City Impact.
“Staff members are encountering previous students who are actually in a default status at some of these community encounters and are providing some very intensive, personal financial counseling to assist them in repairing the loan status and getting out of default,” Sonenberg said. “Many of those individuals simply will not open an ‘official’ looking piece of mail from the Department of Education, or prior lender. However, they will confide in a staff person in a more relaxed and open setting. This actually can help the SCC default rate in the future, as they are currently reflected in the percentage rate and, hopefully, will not be in the future.”
Sonenberg said sessions at the community agencies were structured similarly to the on-campus workshops.
“With those populations it’s more one-on-one counseling,” he said. “The clients from those areas typically do not consider college since many are at the poverty level. Research shows this demographic will not feel college is within their grasp due to their income level, so much of the staff time is devoted to actually mapping out the path to college, which includes the financial aid package. They do, however, explain the loan issues connected to it.”
The U.S. Department of Education released the official FY 2009 national student loan cohort default rate last month. Figures indicate the rate across the U.S. has risen to 8.8 percent, up from 7 percent in FY 2008. The cohort default rates increased for all sectors: from 6 percent to 7.2 percent for public institutions, from 4 percent to 4.6 percent for private institutions, and from 11.6 percent to 15 percent at for-profit schools.
“These hard economic times have made it even more difficult for student borrowers to repay their loans, and that’s why implementing education reforms and protecting the maximum Pell grant is more important than ever,” said U.S. Secretary of Education Arne Duncan. “We need to ensure that all students are able to access and enroll in quality programs that prepare them for well-paying jobs so they can enter the workforce and compete in our global marketplace.”