Default Prevention Grant Program

As Missouri's state-designated FFELP* guarantor, the MDHE believes that helping students make wise borrowing decisions and establish healthy repayment habits is critical to the individual success of Missouri's students as well as to the overall long-term economic health of the state and the nation.

To keep delinquency and default rates as low as possible in Missouri, the MDHE established a Default Prevention Grant program in 2001. Since then, the MDHE has helped as many as 48 postsecondary institutions implement and sustain debt management programs, financial literacy workshops, student success and retention efforts, and default prevention activities.

Since the program's inception, the MDHE has awarded more than $7.1 million to Missouri institutions. During this time, participating schools have seen their two-year Cohort Default Rates (CDRs) decline from an average of more than 14% to a low of 4.9% in 2008. Official two-year CDRs for 2010 as well as offical three-year CDRs for 2009 will be available in September of 2012.

Grant Application Process for 2012-13

The MDHE is now inviting all Missouri postsecondary institutions participating in the Federal Stafford and/or PLUS loan programs to apply for the 2012-13 academic year Default Prevention Grant. The first step in the application process is to submit a letter of intent by the close of business on Friday, April 13. The letter should be very short and simple as its purpose is to provide the MDHE with the number of proposals to expect to review so we can plan accordingly. The official proposal is due by close of business on Friday, May 11, 2012, and grants will be awarded competitively again this year.

For more information, contact:

Marilyn Landrum (marilyn.landrum@dhe.mo.gov)
Sarah Schedler (sarah.schedler@dhe.mo.gov)

*Note: On March 30, 2010, federal legislation was signed into law removing the authority of FFELP guarantors like the MDHE to guarantee new loans after June 30, 2010. All federal student loans first disbursed on or after July 1, 2010 are made by the federal government through the Federal Direct Loan Program. Due to the dwindling of this revenue stream, the MDHE will continue to support the DP Grant program as long as funds are available and it is financially feasible for the state of Missouri.