Federal Student Loan Repayment Has Changed
With federal student loan repayment changes occurring as of September 30, 2024, many borrowers have struggled to make payments as the on-ramp has ended. The Department of Education will be required to report late or missing payments to credit bureaus for most borrowers starting in January 2025. Your former students struggling to make their loan payments will begin to feel additional consequences of their financial burden.
Some borrowers will continue to miss their payments, defaulting on their loans by late 2025. At that point, borrowers will be subject to the collections process. With federal loan default, wages can be garnished, tax returns withheld, and more. Plus, at the point of default, it will affect your institution’s cohort default rate (CDR).
How Student Loan Repayment Impacts Your School
Your school’s CDR is an accumulated average of how many borrowers have defaulted after beginning repayment. If your school’s CDR reaches 30%, you can lose access to Title IV funds, including federal loans, grants, and work-study. Before the federal student loan repayment pause, CDRs had varied by year and across school types.
It’s time to start thinking not only about the impact repayment has on your former students but also the trend your school will begin for your next CDR period.
What action can you take to help former students struggling in repayment to prevent delinquency? How can you reach them—and how can you monitor your CDR?
How ScholarNet Can Help: Portfolio Navigator
ScholarNet’s Portfolio Navigator uses National Student Loan Data System (NSLDS) data to provide both prioritized delinquency outreach and data-driven federal loan default and portfolio management.
- Use loan portfolio data and Portfolio Navigator’s Action Center, to target borrowers in various delinquency stages with effective messaging that urges them to connect with their servicer for help staying on track or signing up for repayment plans that make payments affordable.
- Portfolio Navigator’s dashboard allows you to track your CDR. Doing regular delinquency outreach using the solution’s Action Center can help prevent problems stemming from high CDRs later.
As a trusted resource, your financial aid office can spend as little as an hour per month using Portfolio Navigator’s Action Center, helping former students avoid the consequences of delinquent student loan payments. By helping borrowers from your institution stay on track and avoid default, you can also manage your school’s CDR and help prevent issues down the line.
Get Started
Learn more about how Portfolio Navigator works—and how you can start effectively tackling delinquency outreach and default management before it becomes a problem for your school. Contact your ScholarNet rep today.