Nov 1, 2012 - By Katie Roenigk, Staff WriterCentral Wyoming College is working to lower the number of local students who default on loans through the federal government.
Statistics show 25 percent of students who began repaying loans in 2009 defaulted on those payments within three years. Cory Daly, associate vice president for student services at CWC, said the percentage represents 56 students out of 223 who started repaying loans in 2009.
"The statewide average is 17.3 percent for community colleges," Daly said during a CWC Board of Trustees meeting Wednesday. "So we are high."
If the number reaches 30 percent, Daly said CWC could receive sanctions from the federal government, so she and her staff have taken steps this year to address the default issue.
First, Daly said a loan default task force has been developing a strategy to reach out to delinquent borrowers before they default on their loans.
"The second element is data review -- who are these students and what can we do to prevent (default) from happening?" Daly said. "Then there's communication with students."
A financial literacy course was initiated this semester to teach students about personal finance, and Daley said first-time borrowers are required to enroll in the class. She also is planning interventions for students who are at high risk for default.
"We're paying closer attention to them," Daly said. "They're having to fulfill additional requirements and progress reports to make sure they don't fall through the cracks."
Some of the requirements include creating an educational plan, and Daly said students' enrollment levels can be limited to ensure they complete 80 percent of their attempted credit hours with a minimum 2.0 grade point average.
Finally, she said staff members will be more vigilant when updating rosters. Daly said in the past some students who dropped classes or never showed up to school were left on enrollment lists.
"Now we can take them off the books so they're not penalized for future attempts to register and get financial aid," she said.
Trustee Scott Phister commended Daly on the new "aggressive" approach to loan defaults, and Trustee Frank Welty offered information about an expert in the field who has experience with students who are in danger of default.
"If their income is falling below certain levels you can get the amount they're expected to repay reduced so they don't go into delinquency or default," Welty said. "After 25 years, the loan is forgiven by the government if (the student has) not gotten to a point to have jobs or actually meet requirements of repayment."
Loan repayment must begin six months after a student leaves college, and if a payment is missed, Daly said the student becomes delinquent. Failing to pay for 360 days puts the student in default, and if that happens Daley said the student is added to CWC's cohort default rate.
"The only way a student is no longer considered to be in default is if they satisfactorily make up nine payments in 10 months, in accordance with the loan servicer's parameters," Daly said. "Repaying the loan in full does not rehabilitate the default for the purposes of a college's CDR."
In 2012, a total of 2,092 students sought degrees at CWC. Of that group, 559 people, or 27 percent of the student population, were issued student loans. The average loan granted in 2012 was for $3,178.
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