Financial Aid Default Rate Improves

Over the last 4 years the Financial Aid Office has been working to reduce a steadily climbing Cohort Default Rate. The rising rate is largely due to the economic downturn in 2008 that lead to increased borrowing, and the shift from a 2 year default cohort calculation to a 3 year default cohort calculation. Our default rate reached 24.4, the highest it had ever been at SFCC, and held at that rate for two years. Rather than wait until the default rate reached 30% and face possible sanctions, the Financial Aid Office implemented a default prevention plan. Along with the Directors, the Loan Coordinator Donna Cordova created the details of the plan and diligently works every day to make the plan a success.

In 2014-2015 our loan default rate hit its highest mark at 24.4%. In 2016-2017 we began to see the results of Donna’s hard work, and our default rate dropped to 20%. The Department of Education just released our draft default rate for 2017-2018 and it has now dropped to 16.6%, the lowest it has been in 5 years.

Prior to Donna becoming the Student Loan Coordinator, students at SFCC could receive student loans as long as they were degree seeking and enrolled in a minimum of 6 credit hours. With the economic downturn in 2008, we discovered we had plenty of students who were degree seeking but they weren’t enrolling in classes required for their degrees.

To receive student loans now students must be enrolled in a minimum of 6 credit hours required for their degree. That means that Donna reviews the declared major, enrollment and degree plan for every student who submits a loan application and ensures that they are keeping on track with degree completion.

Additionally, students who have never received a student loan before, or who do not have any outstanding student loan debt, must complete an in-person First Time Borrower’s Class before applying for loans. Donna teaches the class and has designed it to help students understand the long-term impacts and consequences of student loan debt. It’s amazing to see students change their perspective on student loans after this class.

Donna also keeps in close contact with the New Mexico Educational Assistance Foundation (NMEAF) who partners with SFCC to help reduce the number of students entering into default. Their function is to contact students that are in jeopardy of defaulting and offer repayment options and guidance.

Many kudos to Donna and the Financial Aid Office staff!