Positively Affecting Borrower Repayment
As part of our VFA, we have implemented several “Wellness” outreach experiments to develop best practices in building ongoing relationships with borrowers to reduce delinquencies. Our customized outreach to borrowers, from e-mail to phone calls to direct mail brochures and newsletters, is based on where they are in the life of their loan. Our Wellness programs are designed to give borrowers the right information, right when they need it–and the results are proving that we can positively affect their repayment habits:
| Borrower Stage | Program | Results |
|---|---|---|
| Recently graduated, 1-2 months prior to the start of repayment | JourneysContinuous quarterly mailings of financial literacy and career tips for 2 years |
Contacted borrowers have experienced 50% fewer defaults than borrowers with no contact. |
| Withdrawn (traditionally higher chance of default) | TransitionsDirect mail and phone calls provide helpful information on options, such as returning to school and postponing loan payment, beginning standard monthly payments, or exploring alternative payment plans |
While Transitions is too recently implemented to know its effects on repayment habits, 85% of borrowers contacted expressed interest in speaking with ASA and 35% requested additional information. |
| Delinquent | PathwaysSeries of direct mail and phone calls explain consequences of default and ways to get payment back on track |
12% more borrowers who were contacted put their repayment back on track before defaulting, as compared to those who received no contact. |
| Default | Bright BeginningsProvides written and verbal advice, encouragement and support to borrowers on rehabilitating defaulted loans |
50% of borrowers contacted successfully “rehabilitated” their defaulted loan. |
