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Improvement in loan default rate among CWC students
Apr 3, 2014 - By Katie Roenigk, Staff Writer
Only 2 percent of students who borrowed money to attend Central Wyoming College in 2013 have defaulted on their federal loans, officials said this month.
The number shows drastic improvement over the 2011 cohort of borrowers, who recorded a 23 percent student loan default rate over a three-year period.
"(They borrowed) prior to any of our default prevention plans we've put in place," said Connie Nyberg, president of CWC's professional personnel association.
In 2011, the school decided that students who borrow money must undergo one-on-one loan counseling, and certain students must submit budgets and justification documents along with their loan applications.
Since last fall, all students at CWC have been required to take a financial literacy course to meet their general education requirements, and first-time borrowers have to pass the class with a C or better before they can receive all of their loan money.
The college also is working with K12 school districts throughout the county to address financial issues that students may face when transitioning from high school to college.
In addition, Nyberg credited Wright International Student Services with the improved loan default rates. The Wright group contacts "delinquent" students in order to help them avoid loan default, which comes after nine months of nonpayment.
"They track all of those (delinquent) students on a monthly basis," said Jacquelyn Burns, assistant dean for enrollment services at CWC. "The minute they're 31 days (past their last payment) they'll start contacting the students to try to work with them."
Nyberg said students don't necessarily pay cash in order to avoid delinquency or default.
Often, they are simply put in touch with their lenders to explore other options, like income-based repayment plans.
"They're communicating ... so they can make arrangements and get caught up," Nyberg said.
The 2012 borrowing group is now at about 19 percent default, Nyberg noted. That cohort includes 306 borrowers.
For the 2013 cohort, Nyberg said the Wright company has "cured" 39 students so far out of 285 total borrowers.
"So I think that we're on the right track," she said. "(We're) pleased with what's going on with that."
The CWC Board of Trustees echoed her excitement, exclaiming at the low percent of 2013 students in default.
"That's great news," board chair Charlie Krebs said. "We're not anywhere close now to that 30 percent."
A 30 percent three-year loan default rate triggers federal interventions and potential punitive actions after repeated offenses. CWC had come uncomfortably close to that number before adopting default prevention mechanisms: The three-year loan default rate was set at 25.8 percent in 2010 for CWC students.