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Help Your Students Avoid Delinquency and Default

July 28, 2016

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The Atlantic recently published a story with some surprising numbers on student borrowers in default.

In particular, the article (based on a report from the White House’s Council of Economic Advisers) notes that loan indebtedness of $10,000 or less account for two-third of all defaults. Furthermore, adults with student debt under $5,000 are eight times more likely to default than adults owing more than $40,000.

What does this mean for schools and servicers looking to battle default? It means that default management messages and literature are important for all students, not just those nearing graduation. According to these numbers, it’s students who – for whatever reason – leave school prior to graduation that may struggle most with default.

As the article and the data show, default can be a severe problem, no matter how much debt a student borrower may have.

To help your students avoid default entirely, please consider sharing the following resources:

Avoiding Delinquency and Default – This handout from the Nelnet resource library provides four easy methods that student borrowers who are struggling with loan payments can use to avoid default.

Understanding Default – This section of FSA’s website provides comprehensive details on what default is, the effects it can have, and how students can avoid it.

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