TISLA



Effective Counseling SeriesBetsy Mayotte, President | The Institute of Student Loan Advisors (TISLA)Chapter 2: Providing the Right Information at the Right TimeThis article is the second in a series of three created for Iron Bridge Resources that will focus on ways your institution can improve student loan counseling.In our first article we shared the data that shows that basic entrance and exit counseling is largely ineffective, with 40% of borrowers stating they don’t remember receiving the counseling at all. We also discussed the increased importance for a school’s bottom line and reputation to ensure that their students have the tools they need to successfully manage their student loan debt.Providing the right information at the right time can be tricky as the right time can be different for every borrower. For many, it’s when the first bill shows up and they realize what their monthly payment will be. For others, it’s a few years down the line when a financial crisis or milestone occurs.The Right TimeOne way an institution can provide impactful counseling is to reach out to their students around the time they will be receiving that first bill. For May graduates, that will be around the beginning of September. Headlining your outreach towards affordable and effective loan repayment is a good way to get their attention. While providing the information passively can be effective, many borrowers will still want to receive some sort of one on one counseling; having such resources available, even via scheduled call or email, can increase your impact.Reaching borrowers at other times when they may be ready to listen can be trickier as every situation is unique. You can’t know when this student lost their job, or got a raise, or married, or is expecting a child, or saving to buy a home. One effective way to ensure you are reaching those students at the right time is to partner with local employers and ask them to be a communication channel. By providing frequent, expert, easy to understand student loan educational resources to employees on a regular basis, it is almost guaranteed that when that right time arrives, the employer will be there with the right information. As the chart below shows, even a small improvement in Financial Wellness Score (as may be achieved by providing useful information on student loan repayment) can make a significant monetary impact to the employer, making this partnership a win/win:The other benefit of partnering with local employers is you can also reach families starting to think about how they will pay for college. Statistics show that families that are educated about the cost of higher education and available financing options prior to making the college decision make better choices and have less debt struggles down the line. Our first article showed us data that parents are reluctant to talk personal finance with their children; partnering with employers or local schools to get this info to families early can change that reluctance and improve the overall effectiveness of early counseling.If your institution isn’t able to create such partnerships, tax time is another good time to reach out and make counseling available. This is when consumers are looking more closely at their finances and setting financial goals. It’s also when struggling borrowers are seeing the negative effects of default in the form of tax refund offset.The Right InformationHere at TISLA, over half the questions we’ve received over the last six months or so were related to loan forgiveness. That’s to be expected based on our current market and press mentions. In general, however, borrowers who are ready to listen to student loan counseling are looking for information on how best to manage their loans. A survey we issued last year shows us what other topics borrowers are seeking help with:Survey ResponseCountGeneral loan/billing question23.71%Dispute3.09%Payment application10.31%Help with repayment options21.65%Loan forgiveness programs10.31%Loan consolidation questions2.06%Other28.87%Using this metric, a school can be confident of having a positive impact on their populations by focusing their counseling resources on student loan repayment (21.65% of our respondents wanted information on this topic), understanding how payments are applied (10.31% ), and how to strategize aggressive repayment and forgiveness options (10.31%). By promoting those topics you’ll get the attention of more than half of those ready to and in need of counseling. Making the other topics available and easy to find (consolidation, default, etc.) ensures you are fulfilling all the needs, but allows you to devote your limited resources where they will have the most impact.In our next article, we will focus on some effective counseling techniques including generational and case based counseling. ................
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