The Missouri Department of Higher Education promotes default prevention and debt management initiatives related to student loan borrowing and repayment. Objectives include increasing the awareness of financing options for postsecondary education, reducing debt among postsecondary students and parents, increasing enrollment retention, reducing loan defaults, and generally increasing students’ knowledge about their personal finances.

Implementing default prevention and student success programs on campus is:

  • Smart for schools! Successfully educating student loan borrowers can help reduce your institution's default rate and prevent potential sanctions against your institution, such as losing federal program eligibility for student loans, Pell Grants, and other Title IV aid programs.
  • Smart for borrowers! Default prevention activities also improve the student loan borrowers' knowledge of their rights and responsibilities. Extending default prevention to implementing financial literacy and debt management programs on your campus also contributes to the overall financial health of Missouri's students, parents, borrowers, and citizens.

Top Ten Best Practices in Default Prevention

Brought to you by the MDHE's Default Prevention Grant program team.

    1. Organize a Default Prevention and/or Student Success Team. Help the team start strong by requesting default prevention training from the MDHE and reviewing a new printed publication, The Smart Approach to Campuswide Retention and Default Prevention Efforts. This pamphlet was created for Missouri's postsecondary staff and administrators to assist with developing and promoting more cohesive retention, student success and default prevention plans. Additionally, Missouri institutions may attend the MDHE's free Default Prevention Day offered in May.
    2. Profile your institution's defaulted borrowers, and put programs in place to specifically address at-risk populations at your school.
    3. Make retention part of default prevention efforts. Focus on academics as well as providing personal or financial counseling for at-risk students.
    4. Emphasize the benefits of paying interest on loans while still in school. Use the MDHE's free publication Planning for Financial Success to get freshmen borrowers off to a good financial start.
    5. Develop a "loan reminder" presentation/counseling session for returning loan borrowers each year. Results of a 2009 MDHE survey of delinquent and defaulted borrowers indicated that more than 50% of borrowers borrowed more than they expected. Help future borrowers avoid this mistake!
    6. Conduct budget and financial management workshops in classes or include it in the new student orientation process. Seek and use outside resources, such as the MDHE, to help make these workshops as interactive and memorable as possible. Complete our online speaking and event request form to request a financial literacy workshop for your students.
    7. Provide a personalized calendar during exit counseling (mark dates such as the half-way point of the 6-month grace period, end of grace period, and first repayment due date). Include comprehensive student loan debt information (total amount owed, estimated monthly payment amounts, etc.) as well as loan holder contact information.
    8. Provide lifetime job placement assistance.
    9. Include financial aid and retention staff in student withdrawal process.
    10. Use creative techniques to contact students and borrowers. 
      - Sidewalk chalk messages to promote financial literacy events and other programs on campus

      - Hand-written mail reminders to borrowers half-way through grade period and again when first payments are due