Institutional Strategies

Institutional Strategies to Improve
Government Student Loan

Repayment
Report Submitted to
Merv Scott
Director, Student Services Branch
Ministry of Advanced Education
Province of British Columbia
Jennifer Orum
March 31, 2006
Government Student Loan Repayment
Table of Contents
Page
Introduction 2
Part 1: Factors That Play a Role in Government

Student Loan Defaults 3
Part 2: Improving Government Student Loan Repayment
School-based Default Prevention Strategies: US Context 10
Improving Government Loan Repayments: Canadian Context
• British Columbia Post-secondary Institutions 22

• Selected Canadian Post-secondary Institutions 41
• Provincial/Territorial Governments 51
Institutional Strategies & Practices for improving Loan Repayment
• Before post-secondary 62
• Early stages of Enrolment 64
• In-school & Late Stages of Enrolment 67
• After student leaves school 74
Appendices:
A. Preventing Government Loan Defaults: Selected References 76

Additional web-based default behavior resources for
Financial Aid Administrators 94
B. Selected ‘Tools’ for Use in Post-secondary

Institutions 97
1
Government Student Loan Repayment
Introduction
Given the growing emphasis on default prevention, particularly within the context
of the pan-Canadian Designation Policy Framework approved by the Council of
Ministers of Education in April 2003, all partners in the student loan process are
paying increased attention to loan repayment rates. The federal and provincial
governments, as well as service providers, all play key roles in the loan process
and have a responsibility and interest in maintaining the integrity of the student
loan system. Our post-secondary institutions also play an important role in this
system and clearly have an interest in improving the loan repayment rates of
their students.
Research in student government loan defaults over the past decade has
suggested that successful completion of a student’s post-secondary program has
a direct relationship to loan repayment behavior, as does income once the
student leaves school. Thus, ‘student success’, both in the student’s program,
and when they leave post-secondary for the workforce, are being seen as key
variables in limiting defaults on government student loans.
This report endeavours to identify strategies and practices being used in

colleges, universities and institutes to directly or indirectly increase the
government loan repayment rates of their students, including practices intended
to increase student retention and completion rates. The purpose has been to
create an inventory of default prevention and related ‘student success’ practices,
as a useful resource for post-secondary financial aid administrators.
After summarizing the recent research into factors related to loan repayment
behavior, information is provided on the American context and the many system-
wide initiatives directed at increasing loan repayment rates in the United States.
Current strategies and practices in place at British Columbia institutions as well
as selected ones across Canada are then described, followed by a summary of
developments at the provincial/territorial government level. A final summary is
given of institutional approaches, categorized into (a) prior to post-secondary; (b)
early stages of enrolment; (c) in-school and late stages of enrolment; and (d)
after students leave school.
Two appendices are included: A - Selected References Re: Preventing

Government Loan Defaults and Additional Web-based Default Prevention
Resources for Financial Aid Administrators. Then B - Examples of Selected
‘Tools’ for Use in Post-secondary Institutions.
2
Factors That Play A Role in Government
Student Loan Defaults
Introduction
The purpose of this review is to identify factors that play a role in government
student loan defaults. It will attempt to identify those behaviors or conditions that
appear to precede (or are concurrent with) borrowers not following through with
their obligations to repay. This understanding will provide helpful background to
formulating strategies that might increase the repayment rates on government
student loans.
Cause & Effect Versus Correlations
Traditional cause and effect research generally involves making a prediction or

hypothesis about behavior and then testing out that hypothesis. It usually has an
experimental design that involves manipulating variables in specific ways to
isolate causal relationships. Often such studies have a ‘control group’ for
comparison purposes to assist in isolating what is actually a cause for a
particular result. This is a method of controlling all variables except the ones of
interest.
Correlation research endeavors to determine how much of a relationship exists

between variables. It can’t establish whether or not there is a cause and effect
relationship, that ‘X’ caused ‘Y”, rather it can identify that ‘Y’ occurs at the same
time or following ‘X’. Knowing that ‘X’ occurs can therefore help predict if ‘Y’ will
happen, even if we don’t know that ‘X’ causes ‘Y’.
Most of the studies into government student loan default behavior are correlation
rather than cause and effect research. Researchers have attempted to determine
what factors appear to occur at the same time or preceding the occurrence of
loan defaults. Rarely does the experimental design allow one to conclude that ‘X’
condition or behavior or characteristic definitely causes ‘Y’ (default). They
endeavor to establish that certain conditions ‘X’ and ‘Y’ appear to occur either
before or during default behavior. This still provides very useful information, since
being able to identify antecedent conditions for defaults can assist in predicting
when they are likely to occur, even when a causal relationship cannot be
established directly. Actions can then be taken to target specific groups of
students or situations, with the objective of hopefully making default less likely to
occur.
3
Factors Which May Play A Role in Defaults
The categories chosen are, for the most part, those summarized in the
comprehensive literature review on default by Robin McMillion (2005, Texas
Student Loan Corporation), but organized in a slightly different way. References
to research within these categories include both studies identified by McMillion,
plus others.
A fuller description of research referred to in this section can be found in

Appendix A by researcher/author name.
1. Borrower characteristics
These refer to characteristics students have when they enter post-secondary

education.
1.2 Gender
Gender has been found in some studies to relate to default behavior, with men
generally more likely to default on their student loans than women. (Flint 1996)
Three studies have found default not related to gender. (Christman 2000;
Lochner & Monge-Marango 2003; Harrast 2004)
1.3 Age
Several studies have indicated that older students are more likely than younger
students to default. (Flint, 1996; Christman 2000; Harrast, 2004)
1.4 Ethnicity
While some studies have shown that students from certain ethnic backgrounds
may be more likely to default (Volkwein & Szelest 1994; Dynarski 1994; Flint,
1996; Christman 2000; Harrast 2004), others have concluded that borrowers
from various ethnic groups with similar educational attainments, marital status
and family size have similar repayment behaviors.
1.5 Family Background & Income
It has generally been found that students from low income families are more
likely to default, as are those from families with limited education. (Dynarski
1994; Christman 2000) One study did not find any relationship between family
income and education levels and default. (Flint 1996).
4
1.6 Academic Preparedness
A number of studies have shown that students who have higher achievement
prior to entering post-secondary have lower default rates, and alternatively, those
with lower achievement have higher default rates. (Dynarski 1994; Christman
2000). Locher and Monge-Marango (2003) found an interesting U-shaped
relationship between SAT/ACT test scores and default - with default rates highest
for the most able students (quartile 4), the rate for the least able (quartile 1) being
quite close to that for quartile 4. Students in the middle quartile 3 had the lowest
default rates.
1.7 Borrower Attitude
One study of loans to law school students found that default is related to
borrower willingness to pay and ability to pay, not to borrower characteristics or
school characteristics and practices. (Monteverde 2000)
2. Post-secondary Experience Variables
2.1 Institution Variables
Woo’s (1992) research analysis revealed that vocational schools, particularly

privately-owned ones, are more likely to have students who default. Dynaski
(1994) found that students from proprietary schools and two-year colleges were
higher default risks, while Volkwein & Szelest (1995) commented that over half
the defaulters in their study were those who attended proprietary schools.
Human Resources and Skills Development Canada, in their 1997 evaluation of

the Canada Student Loans Program, indicated that borrowers from colleges,
especially private ones, are more likely to default than university students.
Kapsalis (2006), in his StatsCan analysis of 128,000 Canada Student Loan
borrowers who consolidated their loans in 1994/95, found that the average
default rate within the first three years after consolidation for students from
universities (graduate programs) was 12%, universities (undergraduate
programs) 20%, colleges 30% and private institutions 43%.
While default data has often been taken as evidence that type of school effects
default behavior, much recent commentary suggests there is little evidence
school characteristics actually impact default directly. The alternate analysis
emphasizes that it is the characteristics of individual borrowers that can be the
most effective predictor of defaults - that is, it is a function of the types of
students who enroll in programs that relate to defaults, not factors related to the
schools themselves. (Volkwein & Szelest 1994, 1995; Volkwein & Others 1995;
HRSD 1997; Monteverde 2000).
5
2.2 Major/Field of Study
Volkwein & Szelest (1994) as well as Harrast (2004) and Rodgers (2004) found
that students in certain majors/programs may have lower default rates than those
in other programs. Volkwein & Szelest (1995) report that majoring in a scientific
or technological discipline significantly increases the likelihood of repayment.
Lochner & Monge-Marango (2003) found that the differences in default behavior
and major disappear when debt and earnings are taken into account. Flint
(1996) concluded there was no relationship between major chosen and default,
but that the greater the congruency between a student’s college major and their
post-school employment, the higher the likelihood of repayment.
Data from Kapsalis’ StatsCan research (2006) indicates that field of study wasn’t
a significant factor in default rates for college and private institution students, but
did appear to be a factor for university undergraduate students. For example, he
found that average default rates in the three years after loan consolidation for
Arts students was 28%, while the rates for professional program students
(Medicine/Dentistry, Health Sciences and Law) were in the range of 5% to 8%.
2.3 Duration of Attendance Factors
Borrower default rates have been shown to decrease as the length of time in
post-secondary education increases, and vice versa. (Christman 2000; Harrast
2004). McMillion (2004) reports that when students extend their attendance in an
undergraduate program beyond five years, this has a negative impact on
repayment rates.
2.4 Student Employment
Volkwein & Szelest (1998), in their analysis of the National Post-secondary

Student Aid Study, found that working while in college lowers default 7 ½% for
non-white borrowers (with no impact on white borrowers). McMillion (2004) points
out that this study did not look at the default implications of working a small
number of hours versus a large number of hours.
2.5 Counselling
Lein & Others (1993) concluded that counselling has large and beneficial effects,
particularly when it ensures students are aware of their loan obligations. Flint
(1996) found that, controlling for student background, school choice, academic
and other characteristics, no apparent differences in repayment were related to
whether loan counseling was done before, during or after enrolment by either the
schools or the lenders. Howell & Deike’s (2004) research at Pennsylvania State
University suggested that entrance and exit counselling have no effect on loan
defaults.
6
3. Post-secondary Success Variables
3.1 Completion
Based on a large number of studies that have indicated students who do not
complete their post-secondary program, either through failure or withdrawal,
have a higher rate of loan defaults, many have concluded that ‘completion’ (or
non-completion) is a key to predicting repayment and default behavior. (Woo
1992; Volkwein & Others 1995: Rodgers (2004); Rorie & Pierson 2005).
This is borne out by recent statistics from the U.S. Direct Loan portfolio, which
indicates that 71% of defaulters withdrew without completing studies. (Hildebrand
& Walsh, 2006).
Based on his comprehensive review of default literature, McMillion (2004)

concludes that, whereas much of the early research on student default looked at
the association between borrower or institutional characteristics and default
behavior, the general conclusion of most researchers today is that success in
post-secondary education plays a larger role in predicting who will default than
does either the borrower’s background or the type of institution they attend.
3.2 Grade Point Average
Many studies have shown that students with higher GPA’s have lower default
rates, and conversely, students with low GPA’s have higher default rates, while
some have found that students with failed courses are more likely to default.
(Volkwein & Szelest 1994; Flint 1996; Christman 2004; Harrast 2004). Volkwein
& Others (1995) found GPA to be a strong predictor of default behavior for
Caucasian students, but not for minority students.
3.3 Continuous Enrolment
Podgursky & Others (2002) report on a study following students from 1992 to
1999 to determine who defaults on their loans. They found that students who are
continuously enrolled or who complete their program are far less likely to default
than are students who drop out during the same period.
Rodgers (2004) describes a joint study by the Colorado Student Loan Program
and the Colorado Commission on Higher Education that found students who drop
out, re-enrol and then drop out again have lower default rates than students who
withdraw and don’t return.
7
4. Post-college Variables
4.1 Level of indebtedness
Several studies found that students with high indebtedness have lower default
rates than students with lower student debts. It is suggested this reflects the fact
that, for the most part, students with higher debt have continued longer in school
and reached higher levels of educational attainment and thus higher earning
power. One study found default rates increase with amount of educational debt
(Lochner & Monge-Marango 2003), while another concluded there was no
relationship between amount borrowed and default. (Flint, 1996). Kapsalis
(2006) reports that high Canada Student Loan debt levels (defined as over
$20,000) are related to higher default rates.
4.2 Unemployment
Several studies have identified unemployment as one of the most significant

variables associated with loan defaults. (Woo 1992)
4.3 Income
Several studies have found a strong relationship of post-school income to

default, (Woo 1992; Flint, 1996 & 2004). Kapsalis (2006) concludes that
borrowers’ ability to repay their loans depends primarily on their income after
leaving school. Based on a review of an extensive body of research literature
and his own studies on loan default, Mortimer (2006) concludes that student
success in the labour market (income and employment) is the primary
determinant of loan repayment.
4.4 Personal and Family Status
Variables such as being separated, divorced, widowed and having dependent

children have been found to relate to higher default rates. (Volkwein & Others
1995). Flint (1996) found no relationship between post-college marital status and
default.
4.5 Loan Repayment Behavior
One study has shown that borrowers who have been in deferment or forbearance
are less likely to default, while those who went into delinquency more than once
were more likely to default. Monteverde (2000) found that an individual’s credit
bureau score (presumably reflecting the borrower’s history of paying off debt)
was an effective predictor of the probability of default.
8
4.6 Knowledge of Repayment Obligations & Options
Ryan (1993) concluded that for California State University students, loan
repayment is positively associated with borrowers’ understanding of loan
obligations and knowing the rights and responsibilities under loan terms. Lein &
Others (1993) found that default is positively associated with lack of awareness
of loan deferment provisions. Volkwein & Others (1998) concluded that lacking
knowledge of repayment is not a significant factor in default.
4.7 Loan Servicing Factors
Two studies have revealed that students dealing with multiple lenders have
higher default rates. (Flint 1996/1997; Woo 2002) It has also been suggested
(HRSD 1997) that default rates are significantly higher for borrowers dealing with
some financial institutions compared with others. Statistics from the U.S. Direct
Loan portfolio indicated that 56% of defaulters had incorrect telephone numbers
on record, making it very difficult to contact them during the 360-day collection
effort during delinquency. (Hildebrand & Walsh, 2006).
Summary of Factors That Play A Role in Government Loan Defaults
A relationship can be found between many factors and student loan

default/repayment behavior, ones that relate to student characteristics (gender,
age, ethnicity, family background and income, academic preparedness and
borrower attitude); post-secondary experience variables (characteristics of
institution, student major, attendance duration, employment during school, and
loan program counselling); post-secondary success variables (completion,
continuous enrolment and grade point average); and post-college variables (debt
level, employment, income, personal and family status, loan repayment behavior
and knowledge, as well as loan servicing factors.)
While default rates for students who attend private career schools appear to be
higher overall than students who attend public institutions, a number of
researchers believe that the characteristics of individual borrowers may in fact be
more important than characteristics of schools themselves in predicting defaults.
At the same time, post-secondary success variables (specifically program
completion and graduation) appear to be seen as key factors in loan repayment
behavior, as are employment and income after graduation/leaving school.
There seems to be a lack of research in certain areas, particularly the role that
the government loan programs themselves, including their policies and
processes, may play in impacting loan repayment rates. Future directions for
research could include an investigation into whether the increasing number and
complexity of federal and provincial government student aid programs may in fact
be negatively impacting student loan repayment and default behavior.
9
School-based Default Prevention
Strategies: the U.S. Context
Introduction
This chapter describes strategies, practices and tools used either directly or
indirectly to improve the student loan repayment rates at the post-secondary
institutional level in the United States. Given concern for government student
loan defaults has been a significant educational, fiscal and political issue in the
U.S. for considerably longer than it has in Canada, it appears reasonable to learn
from the American experience. The following discussion focuses on ‘school-
based’ government student loan default prevention strategies, referring to other
practices and tools that can be used to supplement institutional approaches.
School-based Default Prevention Approaches
It is clear that there are many points where post-secondary institutions can
interact with government loan borrowers in such a way that risk of defaults is
decreased. In USA Funds’ Debt-Management Best Practices Manual, debt
management and default prevention activities are categorized in four stages:
Stage 1: Application and Loan Origination; Stage 2; In-School Period; Stage 3:
Grace Period; Stage 4: Repayment Period. It also refers to strategies that occur
pre-college, during college orientation of students and parents, when students
are applying for their government loans, while students are attending the college,
and at withdrawal or graduation. The manual can be located at
http://usafunds/financial_aid/debt_management/best_practices/index.html
USA Funds also provides a sample default management plan for post-secondary
institutions, which has sections relating to pre-college, enrolment and application
efforts, plus in-school and graduation/withdrawal efforts. It can be located at
http://www.usafunds.org/financial_aid/debt_management/best_practices/keys_to
_success/develop_plan/sample_plan/index.htm
In Ensuring Student Loan Repayment: A National Handbook of Best Practices

(http://ifap.ed.gov/eannouncements/attachments/0118nhbook1web.pdf) default
prevention strategies are broken down into pre-college, in-school and grace
period & repayment.
The U.S. Department of Education, Federal Student Aid group’s Sample Default
Prevention and Management Plan (http://.ifap.ed.gov/dpcletters/GEN0514.html)
classifies activities into: (1) early stages of enrolment; (2) late stages of
enrolment; and (3) after students leave school. Both in their Default Prevention &
Management Plan and in their Tools for Schools: Default Management (see
http://www.ifap.ed.gov/qamodule/DefaultManagement/DefaultManagement.html)
10
the U.S. Department of Education refers to Late Stage Delinquency Assistance
(LSDA) just prior to a loan being defaulted.
This chapter categorizes school-based default prevention approaches, practices

and strategies into: (1) before post-secondary; (2) early stages of enrolment; (3)
in-school and late stages of enrolment; and 4) after students leave school.
Default-Prevention Approaches: Before Post-secondary
The focus of this stage is to help students and their families learn about the
financial realities of post-secondary and the opportunities to access various types
of repayable and non-repayment assistance, including the nature and
implications of student loans.
Some have recognized the importance of ensuring parents are informed early of
the need to start thinking about financially planning for post-secondary. The State
of Nebraska’s Educational Planning Centre has arranged for such information to
be included in packets going home with parents of newborns from the hospital.
The award-winning FinAid website www.finaid.com has sections to help students

and parents plan (and understand that student loans must be repaid), with a
section on parental information aimed at parents of newborns. The Fin Aid
website also includes a very helpful “Student’s Financial Aid Checklist” which has
a check-off list for important ‘to do’s’ starting with the junior year of high school
and continuing until the student completes their post-secondary education.
(www.finaid.com/students/checklist.phtml ) It would be interesting to develop a
Canadian version of this checklist, one that includes specific reference to the
existence of repayable student loans and non-repayable forms of assistance.
The National Association of Student Financial Aid Administrators (NASFAA) has

developed materials for financial aid administrators and high school counsellors
to put on a ‘Financial Aid Night’. Resource materials available on the NASFAA
website include: Guide to Planning and Conducting a Financial Aid Night, and
Financing Education Beyond Highschool, a financial aid presentation script and
PowerPoint slide show providing basic information students and parents need to
know when applying for financial aid. A similar presentation script and/or slide
show could be developed for the Canadian environment, with expanded
reference to the student loan repayment requirement and the implications for
student loan borrowers. The website can be located at
http://www.nasfaaa.org/subhomes/financialaidnight/faidnight.asp
Mapping Your Future is a national collaborative, public service project of the

financial aid industry in the United States. It brings together the expertise of the
industry to provide free college, career, financial aid, and financial literacy
information and services for students, families, high schools and post-secondary
11
institutions. The early awareness section of the Mapping Your Future website
includes sections aimed as middle and high school students, parents, and
counsellors, as well as post-secondary students and financial aid administrators.
Downloadable PowerPoint presentations for both middle and high school

students and families (http://mapping-your-future.org/mhsc/) can be used by both
middle and high school counsellors as well as financial aid counsellors from post-
secondary institutions involved in early awareness programs intended to provide
information about repayable and non-repayable student aid. The sections on
student loans could be expanded to emphasize the repayment obligation more
fully.
On March 31, 2006, Mapping Your Future announced a new on-line financial
literacy educational tool Show Me the Future - an interactive financial literacy and
life skills game, The game is designed to assist 12 to 20 year olds prepare for
their futures by helping players understand: the cost of living, budgeting, the
difference between wants and needs, the importance of financial planning, the
need to set career goals and the value of higher education. The game can be
found at: http://showmethefuture.org/game/index.cfm
USA Funds introduced Unlock your Future in 2003, an early-awareness program

for middle-school students and their families. It includes a 45-minute Student
Track that informs students of their career and education options and
encourages them to plan for their future. The 30-minute Family Track is a
presentation for family members that complements the student presentation and
encourages adults to play an active role in their child’s future. It covers the value
of higher education for their children, 21st century career options and financial aid
eligibility. Information on Unlock Your Future can be found at
http://www.usafunds.org/financial_aid/resources/unlock_the_future.htm
The College Board has a ‘Pay for College’s section of their website:
http://www.collegeboard.com/student/pay/index.html It includes a Financial Aid
EasyPlanner, information on applying for a government loan, a Scholarship
Search database, and college financing calculators. A Financial Aid Calendar
outlines, step-by-step, what should be done to plan financially and apply for
government assistance, from the summer before senior high school year to the
start of classes in September.
Default Prevention Approaches: Early Stages of Enrolment
The U.S. Department of Education has published a September 2005 update of its
Sample Default Prevention and Management Plan, first issued in 2001 for
schools that have students obtaining federal student loans. It includes sections
on early stages of enrolment, late stages of enrolment and after students leave
school, covering activities, techniques and tools to promote student and school
12
success and reduce student loan defaults in the Federal Family Education Loan
(FFEL) and national Direct Loan programs. It can be found at
(http://.ifap.ed.gov/dpcletters/GEN0514.html
U.S. Federal regulations require that schools provide entrance counselling to

first time FFEL and Direct Loan borrowers, individually or in a group with other
borrowers, or electronically. The counselling must explain how promissory notes
work, emphasize the importance of repaying loans, describe the consequences
of default, stress that repayment is required, regardless of educational outcome
or subsequent employability, and show borrowers sample monthly repayment
amounts based on their program of study. (2005-06 Federal Student Assistance
Handbook). Schools are encouraged to enhance their entrance counselling to
include:
• a review of terms and conditions of the loans and repayment options;

• managing of expenses (budgeting);
• reinforcement of the importance of communicating change of status to the
lender;
• a review of borrower’s rights and responsibilities;
• a review of deferments, forbearance and cancellation options;
• a reminder of refund and other policies affecting withdrawals;
• a reinforcement of the importance of keeping loan records;
• a reminder about the requirement for exit counselling.
Schools are also encouraged to include financial literacy information such as the
income potential of occupations relevant to their course of study and tools to
manage debt. The U.S. Department of Education’s Ensuring Student Loan
Repayment: A National Handbook of Best Practices (2001) recommends that
parents be included in entrance counselling if borrowers are dependent
students.
The Mapping Your Future website includes on-line student loan counselling
(OLSC) modules that meet the U.S. Department of Education’s federal loan
counselling requirements and help students understand education loan
obligations. This is a free public service and there are no requirements to use a
specific guaranty agency or lender to participate. Details of OLSC for financial aid
administrators can be found at:
http://www.mapping-your-future.org/services/oslcpsindex.htm
Other organizations have developed on-line counselling that meets federal

requirements. One example is that made available through the American
Education Services (AES), a division of the Pennsylvania Higher Education
Assistance Agency. It can be accessed at:
https://host208.aessuccess.org/ECounsel/Counseling/Index.do?clientid=PA&loca
le=en
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AES has also developed the www.YouCanDealWithIt.com website, designed
to help college students, as well as recent and soon-to-be-graduates, understand
the importance of financial literacy. The site includes sections on purchasing a
first car, living on a budget, saving for the future, repaying their student loans,
plus resources related to debt management. The component for Financial Aid
Advisors includes an entertaining, downloadable video/with audio Common
Cents Tour, a program that helps first year students become more financially
responsible. The worksheets and exercises were developed by Dara Duguay,
Executive Director of the Jump$tart Coalition for Financial Literacy and author of
Please Send Money: A Financial Survival Guide for Young Adults on Their Own.
The Common Cents Tour is available free of charge for use in Financial Aid
offices and was designed for financial aid administrators to incorporate into the
entrance counselling program. It can be established as a computer workstation
for students to use or promoted for at-home use. It can be found at
http://www.youcandealwithit.com/faas/default.html
USA Funds has developed Life Skills, a financial literacy program designed to
equip post-secondary institutions to teach their students to manage their time
and money wisely while they are on campus and after graduation. Use of the Life
Skills program is limited to institutions that use USA Funds as their primary
guarantor or schools in states where USA Funds is the designated guarantor.
While other schools cannot order and use the Life Skills materials themselves,
the USA Funds website includes a helpful section that describes how schools
using the Life Skills materials have integrated it into their financial literacy and/or
student success programs. This section can be found at:
http://www.usafunds.org/financial_aid/debt_management/usa_funds_life_skills/b
est_practices.html
The Mapping Your Future (MYF) website includes Financial Fitness Tools: Ten
Steps to Financial Fitness and a Debt/Salary Wizard. The Steps to Financial
Fitness is intended to educate high school and college students about personal
finance. The ten steps include: (1) understand the roles of student loan players;
(2) avoid consequences of default; (3) be in control of your finances; (4) balance
your cheque book; (5) establish a budget; (6) pay yourself and invest; (7) use
credit wisely; (8) know your credit report; (9) clean up credit; (10) surf the web for
more info. Students can determine if they are financially fit, get advice on the
wise use of credit cards, learn about the consequences of default and how to
avoid defaulting on their student loans and other debts, and access information
on credit reports and investment options. Mapping Your Future also provides
interactive calculators to help students with budgeting, balancing a cheque book,
savings and loan consolidation. The Financial Fitness Tools are located at:
http://www.mapping-your-future.org/features/dmtensteps.htm
MYF also includes a Debt/Salary Wizard, which is an interactive calculator to

help students and parents determine (a) how much salary is needed to make the
14
payments on current and future student loan debt; and (b) how much can be
borrowed, based on future expected earnings. The wizard can be found at:
http://www.mapping-your-future.org/apps/debtwizard/
Among the additional strategies that can be used early in the enrolment period
include:
• orientation sessions offered to students and parents by the post-

secondary financial aid office personnel to provide information on
financing education and debt-management, including information on
alternatives to borrowing, appropriate borrowing, the responsibilities
related to borrowing and the consequences of default.
• building first year experience sessions, programs or courses around one

of the financial literacy programs available to all institutions such as
Mapping Your Future’s Financial Fitness Tools or the AES Common
Cents Tour.
Default Prevention Approaches: In-school and Late Stages of Enrolment
In their Sample Default Prevention and Debt Management Plan (revised version
September 2005), the U.S. Department of Education emphasizes the importance
of early identification and counselling of students at risk of defaulting. This
includes borrowers who withdraw prematurely from their educational programs,
borrowers who do not meet standards of academic progress, or both.
The Department’s Ensuring Student Loan Repayment: National Handbook of

Best Practices (2001) indicates that those who withdraw within the first year of
enrolment are particularly at risk. The Handbook suggests institutional research
departments at post-secondary institutions do research to develop a ‘profile’ of
defaulters at their schools, when student-based default information is available to
the institution. One example given is the Profile of a Student Loan Defaulter at
the University of Illinois, Chicago, with this specific profile:
• the borrower failed to graduate

• the borrower failed to provide a current address or phone number
• the borrower owes less than $2,000
• the borrower faced poor job prospects
• the borrower had other financial burdens besides education debt
• the borrower did not perform well academically
• the borrower came from a low income household
• the borrower married another student with loan debt
• the borrower was a single parent.
15
In two presentations on Reducing Delinquency and Default, representatives from
the U.S. Department of Education’s Federal Student Assistance Default
Prevention and Management division proposed that institutions develop
strategies for financial aid offices to quickly find out about students who leave
early. They suggest that institutions should be sure that they collect sufficient
contact information while the student is enrolled, so that they can immediately
contact dropouts. Among the strategies proposed to deal with high-risk
populations - monitor students’ ‘satisfactory academic progress’ and counsel
potential ‘early leavers’. (Pierson, Schmidt & LeBorys and Rorie & Pierson:
NASFAA Conference sessions, November 2004 & July 2005)
The Sample Default Prevention and Debt Management Plan suggests that
counselling should focus on the causes of withdrawal or unsatisfactory academic
progress and solutions to resolve these matters. A further suggestion is that
financial and academic counselling be integrated.
The Ensuring Student Loan Repayment Handbook of Best Practices outlines five
ways institutions can more effectively track dropouts:
• establish record-keeping processes and systems to alert the financial aid

office when a loan recipient leaves school;
• communicate with enrolled borrowers frequently;
• ask instructors to alert the registrar’s office when students in their classes
stop showing up, explaining that this will help the financial aid office assist
students with their loans;
• check course drop procedures to ensure they’re designed to identify
borrowers who drop all of their courses and set up a process to contact
those students immediately and inform them they need to come in for
academic and financial counselling;
• send letters to borrowers who don’t use early registration for the next term,
ask them if they’re returning and remind them of loan repayment
obligations
In their Sample Default Management Plan, USA Funds suggests offering

workshops several times each term on topics such as reducing living expenses,
searching for outside scholarships, loan consolidation, transfer procedures,
investing and budgeting. They also suggest designing a communication stream
for students that includes: (1) a debt-management newsletter distributed monthly
via campus mail and e-mail to provide information on student loan application
issues, credit cards, issues to consider when borrowing, and money-saving tips;
(2) an FYI e-mail campaign consisting of brief but effective information e-mails to
students on debt management, saving, credit, repayment, and borrower benefits
- information that students can put into action immediately; and (3) sponsoring a
debt-management day in the middle of term(s) involving informational postings in
student food service facilities, an information table, guest speakers, giveaways
and food. See
16
http://www.usafunds.org/financial_aid/debt_management/best_practices/keys_to
_success/develop_plan/sample_plan/index.html
The U.S. Department of Education requires that Perkins Loan and Direct Loan
borrowers have exit counselling before they graduate or when they drop below a
50% course load. The counselling can be provided to students individually or as
a member of a group, or through audio-visual materials. As is the case with
entrance counselling, exit counselling is offered on the web by guarantors,
lenders, and by the Direct Loan Program. The required elements of exit
counselling, as outlined in the 2005-06 Federal Student Assistance Handbook
are:
• review of information from entrance counselling, particularly the

consequences of default, the importance of the repayment obligation, the
use of the promissory note, the obligation to repay the loan even if the
borrower drops out, doesn’t get a job or is otherwise dissatisfied with the
quality of the school’s educational programs and services;
• providing an average anticipated monthly repayment amount;
• review of repayment options;
• discussion of debt management strategies;
• review of forbearance, deferment and cancellation options;
• notification of the availability of loan information on the National Student
Loan Data System and the availability of the FSA Ombudsman’s office;
• collection and updating of personal and contact information.
It is recommended that exit counselling also include providing the student with
the current name and address of the borrower’s lender, an explanation of how to
complete deferment forms and prepare correspondence to the lender,
emphasizing that borrowers should always keep copies of all correspondence
from and to them about their loans, and stressing that a borrower must make
payments on his or her loans even if they don’t receive a payment booklet or
billing notice.
Developed by AES, Money Matters is a program to help students and recent

grads become more financially responsible. It includes sections on understanding
student loans, determining financial priorities, creating a budget, managing debt,
and saving money. The component on understanding student loans includes
information on borrowers’ rights and responsibilities, loan repayment, the loan
grace period, consequences of default and tax deductions. It includes a student
loan calculator and grace period calculator. This video (with audio) presentation
is available free of charge for use in financial aid offices and compliments the
U.S. Department of Education-required exit counselling program. It can be
established as a computer workstation for students to use or promoted for at-
home use. It can be downloaded from
17
AES also developed a series of entertaining posters for posting on campus
related to various aspects of student loans and finances. For example, the spring
and fall 2002 posters included a series “If time is money, how come I have so
much of one and not the other?”, “Bad credit is like a bad nickname, it will stick
with you for years”, “Do something useful during your grace period, like paying
back your student loan before interest kicks in”, and “Default on your student loan
and watch good credit go bad”, all with eye-catching photos. (AES Default
Aversion Information Sharing Session, Indianapolis, December 2002 found at
http://www.fp.ed.gov/fp/attachments/activities_whatsnew/DA1202.ppt )
Default Prevention Approaches: After Students Leave School
The U.S. Department of Education’s Ensuring Student Loan Repayment: A

National Handbook of Best Practices (2005) outlines a number of strategies for
schools to follow once students have graduated/withdrawn from full-time studies.
It suggests that the best way to help dropouts become successful repayers is to
encourage them to return to school to complete their programs by contacting
them as soon as possible and finding out why they left school and what it would
take to get them to re-enroll. They should be informed that they can defer their
loans as long as they are enrolled. Since technical defaults can occur when
students transfer to another institution and don’t notify the first school, it is
suggested that schools may want to track transfer students.
The importance of the school making early contact with borrowers during the
grace period is mentioned. It is recommended that schools:
• contact borrowers immediately after they enter the grace period and
several times during the grace period, to ensure they know about
consolidation and other repayment options and the deadline for starting
repayment;
• let students retain their school e-mail accounts for at least six months after
they leave school to provide a constant point of contact and a vehicle for
the school to communicate with borrowers;
• use the grace period to set up an electronic payment agreement with the
borrower;
• encourage students to make payments during the grace period to help

them become aware of the existence of loan payments in their budgets as
they leave school and find jobs, and to reduce the total interest to be paid.
The Department of Education’s Sample Default and Management Plan (2005)

describes two stages in providing assistance to delinquent borrowers. Early
Stage Delinquency Assistance (ESDA) begins at the time of separation or
18
early in the grace period, and is a highly-focused effort by lenders, guarantors
and schools to assist borrowers who are at high risk of default to prepare for
entry into loan repayment. In the case of borrowers who are at least 60 days
delinquent, schools are advised to refer their former students to the default
aversion assistance offered by guarantors and direct loan servicers.
Late Stage Delinquency Assistance (LSDA) includes a number of techniques

aimed at rescuing severely delinquent borrowers. It mainly involves the school
making a series of phone calls, in some cases several a month, to inform their
previous students who have become delinquent borrowers that there are options
and help available. It is felt that students respond well to schools. Research has
revealed that the average ‘percent rescued’ for LSDA programs ranges from 25%
to 70%, with the overall average for various types of institutions being 36%.
(Rorie and Pierson, “Reducing Delinquency & Default: How Schools Can Help”
NASFAA Conference presentation, July 2005). This presentation includes a
series of LSDA ‘tips for success’ for schools which include:
• using a light touch, remembering the goal is assistance, not collection;

• calling at different times of the day;
• mailing hand-written notes;
• using contact information from several sources;
• sending out information on repayment options, deferments and
forbearance;
• connecting the student with the Loan Service Center in a three-way call.
Inter-relationship of Student Retention and Loan Repayment
British Columbia has some significant research experience with students who are
early leavers at provincial universities and colleges. The 2000 BC University
Early Leavers Survey (Conway, University Presidents’ Council of British
Columbia, 2001) reported that of every 100 students who start undergraduate
studies, between 30 and 50 will leave prior to degree completion. Of the early
leavers, over half attend another educational institution within 24 months of their
departure. 59% of the leavers were ‘true leavers’ - those whose attrition was
unplanned and permanent. Reasons given by true leavers for departing
university:
• poor academic performance, including, but not limited to, the student
being required to withdraw;
• inadequacy of financial resources to continue study;
• the decision (arrived at sometime after the commencement of study) to

transfer to another institution:
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• changes in personal or life circumstances, including illness and family
obligations;
• the search for, or commencement of, employment;
• dissatisfaction with, or unavailability of, the academic program the student

was interested in.
The B.C. College and Institute Short Stay Pilot Survey collected data on the
outcomes of former students who left public colleges, university colleges and
institutes after completing a relatively small number of courses - between 9 and
13 credits. When asked for their main reason for leaving, 23% of short stay
students said they left early because they had completed their program, or
completed courses they wanted or needed, in many cases, to transfer to another
program or institution; 16% said they left for employment, and 11% said their
main reason for leaving had to do with finances and affordability. 46% of the
early leavers took some further studies.
Given the research indicating that completion of studies is a major factor in

student loan defaults, there has been growing interest in the relationship of
student retention, loan repayment and financial literacy.
USA Funds sponsored a symposium in February 2005 - Solving the Retention

Puzzle: The Link Between Retention and Financial Literacy. (Coleman & Miller,
2005). The symposium summary categorized risk factors associated with
students dropping out of college before completing their program into five
categories: (1) academic; (2) personal; (3) life issues; (4) social; and (5)
institutional. The Student Satisfaction Inventory (SSI), a tool for campus
assessment of student experience that includes a section on financial literacy,
allows institutions to capture both a satisfaction score and an importance score
so they can identify the strengths and challenges of their institution and compare
results to national scores. It recommends using student peer counsellors in a
campus financial literacy program that includes:
• presentations in courses:
• tables or booths at campus fairs and new student orientations
• addressing staff meetings (such as housing coordinators, resident
assistants)
• newspaper articles in school or community newspapers
• flyers, on buses and bulletin boards
One of the public universities using the USA Funds Life Skills program as part of
their financial literacy initiatives is Ohio State University. In a December 2005
web conference Using Financial Literacy Programs as a Student Retention
Tool (Academic Impressions Web Conference, December 1, 2005), Tally Hart,
Ohio State’s Director of Student Financial Aid, outlined ways to build financial
20
literacy into existing campus offerings (e.g. combining with freshman survey
classes, including as part of comprehensive first year experience classes, adding
to student loan entrance counselling). She bases much of her approach on John
Gardner’s work on the first year experience, particularly the identification of
financial literary as one of seven competencies for freshman success and the
research indicating that the third week of a student’s first term is a crucial time to
address financial literacy issues with students. References to Gardner’s research
can be found at http://www.sc.edu/fye/ .
A very helpful resource on student retention is the website of the Center for the
Study of College Student Retention (www.cscsr.org) Alan Seidman, Executive
Director of the Center, proposes a retention formula for student success:
Retention = Early Identification + (early & intensive & continuous) intervention
Seidman bases his theory on the work of other key contributors to the student
retention field, including Astin’s belief in ‘involvement’ as the cornerstone of
retention (1985) and Witt and Handal’s ‘person - environment’ fit and the impact
on satisfaction (1984). In a slide show included on the Center’s website, Seidman
points out the central role of the financial aid office in student retention. He
relates this to factors such as:
• the financial aid office is the second, and possibility the first in many
instances, contact with the student in writing, through the web, telephone
and/or in-person;
• it does many mailings to students;
• it assists students’ ability to attend;
• compared to other parts of the institution, it may have the most contact
with the student during his/her full post-secondary career;
This analysis supports the key role of financial aid administrators in the retention
of students.
21
Improving Government Loan Repayments:
Samples from B.C. Post-secondary Institutions
British Columbia Institute of Technology
1. Financial Aid Office
• As part of an outreach program to provide prospective students

information on student assistance opportunities, has a financial aid advisor
and information station at the bi-annual BCIT Open House, and at ‘Big Info
Sessions’, both at the main Burnaby campus and when such sessions are
offered at external locations.
• Presents special information sessions on student assistance options to

targeted groups (e.g. Trades Discovery classes and selected class intakes
at Aviation and Marine campuses.)
• Presents group information sessions to give an overview on repayable

and non-repayable government and institutional student assistance to
BCIT staff (e.g. Program Advisors).
• Publishes a ‘Student Financial Aid & Awards’ brochure, both in hard copy
and as a downloadable PDF file on the department website, that includes
information on the importance of a financial plan, full-time and part-time
government and institutional assistance (both repayable and non-
repayable), scholarship/award search websites, and includes a budget
worksheet.
• Maintains and keeps up-to-date a very extensive series of bulletin boards

on government loan programs and other types of government assistance,
BCIT bursaries, entrance awards, and transfer awards.
• The financial aid and awards department website presents information on

full-time and part-time government and institutional assistance (both
repayable and non-repayable) and includes information on student loan
repayment. It includes contact information on the National Student Loan
Service Centre and the B.C. Student Loan Service Bureau, as well as a
link to CanLearn’s Student Financial Planner and the University College of
the Fraser Valley’s ‘Comprehensive Financial Planner’. It also includes
downloadable forms for students to apply for BCIT assistance.
22
• Two student use computers are located in the financial aid and awards
reception/resource area to allow access to the web for financial assistance
information, to apply for government assistance on-line and to access
forms for applying for institutional assistance.
• Communicates with students through student intranet e-mail messages,

targeted to announce important developments such as award and bursary
deadlines.
• Has used the back of washroom doors to communicate award deadlines

to a captive audience.
• Offers both BCIT emergency loans and emergency bursaries to assist

students survive financial crises, that in some cases might otherwise
mean they may have to withdraw from courses or their program.
• Has developed system reports to identify student withdrawals on a timely

basis, with front-line team staff and/or financial aid advisors following up in
selected cases to alert students to the implications of dropping their
course load.
2. Other student support services
• Student Services departments (including Student Financial Aid & Awards,

Apprentice Services, Counselling & Student Development, Disability
Resource Centre, Aboriginal Services and Student Housing) work in a
coordinated manner, using inter-departmental referrals when appropriate
to assist students deal with problems impacting their studies.
• Student Services departments set up information tables at a ‘Student

Services Day’ each year in the fall.
• The Counselling & Student Development department offers ‘BCIT

Preparation and Early Orientation’ courses, with topics including factors
contributing to student success, study skills, time management and
accessing support and assistance at BCIT. The ‘Student Financial Aid &
Awards’ brochure is distributed to participants.
• The BCIT ‘Learning for Success’ program offers a student success course
that is part of the Engineering Technology Entry programs. Topics include
learning styles, study skills, time management and how to access Institute
resources.
Camosun College, Victoria
23
• Emergency Bursaries are used to retain students in financial crisis.
• Students in Associate Degree and Business Diploma programs are

required to complete Personal Learning Plans (PLP’s) and meet
with academic advisors to clarify their objectives. While it is planned
that all university transfer students will need PLP’s, discussions are
also underway to require all college students to do one.
• The focus of the college’s student service departments is to

educate students and assist them in acquiring the skills needed to
be more self-reliant. A handbook is provided to new students ‘At
Your Service: A Guide to Student Services for Students’, which
gives a brief description of each service, hours of operation, contact
information and webpage address.
• As a result of an effective system of inter-departmental referrals, a

significant number of students have been prevented from dropping
out. Students reporting to Financial Aid & Awards wanting to
withdraw from a class or program are frequently referred to an
academic advisor, a counselor, or, if appropriate, to the Disability
Resource Centre. Similarly, students who tell an academic advisor
they are withdrawing for financial reasons are referred to Financial
Aid & Awards. Faculty refer students to student services for a
variety of reasons, including students at risk of withdrawing.
Capilano College, North Vancouver
• Proposing to develop a pop-up box such that when a student goes

to withdraw on-line, the pop-up advises them to contact the
financial aid office to find out about the implications of their
withdrawal.
• Considering the establishment of a Banner report generated on a

daily basis, identifying those BCSAP recipients who drop below a
60% course load (40% for students with documented permanent
disabilities); with planned follow-up with students to inform them of
the loss of their funding eligibility, with the hope of some re-
registering to maintain eligibility.
24
• As a way to limit overawards (and hence prevent potential defaults
in students’ graduating year) starting with the 2006/07 year, will not
allow Business and University Transfer students to apply for
BCSAP in an educational period that includes the fall, spring and
summer terms.
College of the Rockies, Cranbrook
• While college students in general are not allowed to withdraw

completely without first speaking to a Financial Assistance Advisor,
BCSAP recipients require the approval of the FAO to either
withdraw from courses or withdraw completely. Such students are
advised of their loan repayment obligations, CSL/BCSL
overawards, tuition refunds, the successful completion/withdrawal
policy and debt management tools.
• As part of the financial assistance advising process, students are

able to access information and assistance regarding student loan
repayment, including federal and provincial debt management
tools.
• Spring financial assistance workshops are delivered to regional

high schools.
• “Debt Free Graduate” books are distributed at Orientation Day
• Error/omission class lists are distributed after the term’s stable

enrolment date to ensure all class lists are accurate. Students who
appear on the list but are not attending are contacted and advised
of the impact their non-attendance will have on their program
success and eligibility for financial assistance.
• When students exit early or complete prior to the end of their

funded term, the FAO is notified to ensure any tuition refunds are
distributed appropriately to CSL/BCSL service providers.
• Among college policies that have a positive effect on

retention/completion rates of student loan recipients are: vocational
student attendance policies; and admission requirements to ensure
only qualified students/those sufficiently prepared are admitted.
25
• Future initiative: Essential Skills for College Success (ESCS 100), a
course designed to increase students’ academic success and
enhance both the students’ college experience and future
employability. Consists of five modules; basic computer use,
thinking skills, writing skills, research skills and keyboarding skills.
• Future initiative: Implementation of a degree audit program to allow

students to track their education plan, monitor their own progress
and allow for intervention by student services if they stray from their
education plan.
Douglas College, New Westminster
• Continue to offer financial aid sessions to assist students

understand the loan program, but attendance has dropped off.
Historically offered in the summer and less frequently throughout
the year, to help students with the application process and to
provide information on (a) institutional funding (scholarships,
awards, bursaries, fee deferrals, emergency loans); (b)
confirmation of enrolment forms need to keep loans in good
standing; (c) loan repayment when they leave full-time study; (d)
the effect of default on credit rating; (e) programs available to assist
them if they run into financial difficulty while in repayment; and (f)
other student services available at the College.
• Two student-use computers in the financial aid office for students to

apply on-line for their student loan and to access web resources,
which encourages them to ask questions if they don’t understand
something.
• A financial aid website with information on program costs, financial

aid programs, awards, scholarships, bursaries and links to other
resources, including CanLearn’s Loan Repayment Calculator. In
the summer 2006, there are plans to add an electronic award
application.
• In co-operation with the college’s Communications and Marketing

Office, has developed a brochure ‘How to pay for college and not
break the bank’ and a new entrance scholarship application.
• Participates in Open House and Student Orientations.
26
• Communicates with students through e-mail
(financialaid@douglas.bc.ca), bulletins through mydouglas.bc.ca,
as well as telephone and in-person enquiries.
• Takes part in Student Success 1100 classes. (see below). The

financial aid office offers a two-hour interactive presentation
‘Financing a College Education’, in which students ask questions
about student loans, are given a free copy of ‘The Debt Free
Graduate’ and encouraged to think about alternative resources. All
participants receive a folder with federal and provincial brochures
including ‘Canada Student Loans for Full-time Students - Investing
in Your Future’. A sample loan amortization table is included that
illustrates the cost of borrowing student loans depending on the
amount borrowed, interest rate and amortization. Students are
encouraged to use www.canlearn.ca for financial planning to
calculate different scenarios for loan repayment.
• Free copies of the “Debt-free Graduate” are available at the

financial aid office and through events such as orientation.
• When confirming enrolment for student loans, for students not

confirmed through the automated ECE process, if it is noticed that a
student is not enrolled full-time, they are contacted to remind them
of the minimum course load required and to inform them of options
such as part-time and upgrading funding.
• Gift certificates to Safeway are used in emergencies if a student is

clearly out of money for food or transportation. Some of the general
bursary funds are used to help students in crisis with unexpected
expenses.
• Students are referred by the financial aid office to other student

support services as needed, to help the student stay in school, or to
help them plan for a return to school if they need to take time out.
• An on-line student orientation was added to the college website in

the summer 2004: http://www.douglas.bc.ca/new-students/student-
orientation/
• An in-person orientation was re-introduced in the summer 2005.
• Student Success STSU 1100, Introduction to College Studies (3

credits) is designed to help students develop the skills, knowledge
and habits necessary to make a successful transition to post-
27
secondary education. It includes components on study skills, writing
a college-level research paper, library research, critical thinking,
personal and career planning, and transferring to other institutions.
• STSU 1100 will be offered to high school students in 2006/07 on a

co-credit basis (students will get both high school and college
credit) to demystify the college and help students get the skills they
will need in post-secondary education.
• A Student Services Open House is held every fall semester to

introduce students to services available at the college.
• A new English requirement was introduced in the fall 2004 to

ensure all students have the skills needed to be successful in their
courses.
• An Office of New Students, approved for September 2006, will

facilitate the transition of new students to the college and their
retention into second year and beyond.
Emily Carr Institute, Vancouver
• Students on assistance that withdraw from the Institute are required

to see the Financial Awards Office before the Registrar’s Office will
remove them from classes. Such students are coached through
various repayment requirements and options.
• A bi-weekly report is produced identifying students who have

dropped below a 60% course load. The students are contacted and
advised of the loan implications of a reduced course load, with the
result that some students return to the 60% level.
• Faculty members issue a warning slip if a student appears to be

heading towards a failing grade (for non-attendance or other
reasons), which usually means they are referred for academic
counselling, disability assistance, writing centre assistance etc.,
which in turn results in a referral to the Financial Awards Office if
the student reveals they are on student assistance or in financial
difficulty. In the case of students who receive several warning slips
for non-attendance, the Records Office passes the information on
to the Financial Awards Office so that student loan recipients can
28
be contacted by phone to remind them of the requirement to attend
classes for continued student loan eligibility, and to remind them of
repayment obligations and options.
Institute of Indigenous Government, Burnaby
• Identifies students who drop below a full course load and discuss
the implications of dropping below full-time before they complete
the paperwork.
• Students who want to withdraw from their program must do so with

the financial aid office.
• Students who are identified by faculty for non-attendance or

potential failing grades are contacted by the financial aid office to
discuss possible solutions.
Justice Institute of B.C., New Westminster
• Since all BCSAP-funded students must study at the 100% course

load level, it is easy to identify those who drop below 60% -
students are either in the program or not.
• A new bursary program has been introduced that provides

additional non-loan options for students. See
(http://www.jibc.bc.ca/studentservices/bursaries/bursaries.htm)
• Rigorous admission requirements, plus the small class sizes and

low instructor/student ratios, allow ‘at risk’ students to be easily
identified and monitored.
• Introduction of eight remedial/reading and review days adjacent to

critical exam points in a program to reduce the withdrawal rate.
• As indicated in the College and Institute Student Outcomes Survey,

Institute graduates show strong employment and earning
outcomes, which should result in a direct correlation to the
graduates’ ability to repay their student loans.
29
Langara College, Vancouver
• Interviews students who are thinking of withdrawing from classes to

encourage them not to withdraw. Implications of dropping below a
60% course load are discussed, and appropriate remedial
measures are identified (e.g. use of tutors, meeting with instructors,
referral to the Writing Centre).
• Plans to introduce Financial Literacy workshops.
• The Counselling Department offers success workshops that include

topics such as study skills and time management.
• Many departments follow up on students who do not attend, to

determine how they might be assisted to complete their program.
• While previous policy required students placed on Academic

Suspension (after a semester on Academic Probation) to sit out a
full year before returning to studies at the college, a new success
program has been implemented that allows a student, in the first
semester of absence, to meet with a counsellor and have an
assessment of needs for retention. The student and the counsellor
develop a plan for success, signed by both parties, which obligates
the college to offer remedial assistance where necessary. The
student can thus return to studies after only one semester out.
• The timeline for provision of information on the college offerings

and timetables has been moved up, to allow students to plan their
studies and timetables early and thereby commit to a full program
of study.
Malaspina University College, Nanaimo
• Reports are run regularly that identify students who have dropped
below 60%. Such students are contacted by phone or e-mail to
discuss the implications.
30
North Island College, Courtenay/Comox
• Reports are generated bi-weekly to identify students who have

dropped below 60%. It is planned to have e-mails sent to such
students and to have an exit survey for students dropping on-line,
asking them if they have a student loan, and if so, referring them to
the Financial Aid Office.
• The Financial Aid Office talks to all students that withdraw and
advises them of their responsibilities and options.
• Two ‘plain language’ brochures are planned: (a) the first is to be

sent to the student after they receive their loan, will include
information on a student’s responsibilities, maintaining the minimum
course load, plus contact information for the college’s FAO’s and
the Ministry of Advanced Education contacts; and (b) the second, to
be sent at the end of the student’s last funded semester or when
they withdraw, will advise the student of consolidation and options
available if they can’t repay.
• Counsellors and educational advisors try to direct ‘at risk’ students

to the Financial Aid office.
Okanagan College, Kelowna
• Attends numerous recruitment sessions (info nights) throughout the

year and dispenses financial aid information, including copies of the
‘Debt free Graduate’ and the recent version of the CanLearn
booklet.
• Takes part in first year student orientation (see below).
• Emergency funding (loans and bursaries) is provided to students

who have a financial roadblock that may necessitate withdrawal if
not dealt with.
• Co-ordinates student supports within the institution, e.g. if a student

needs major motor vehicle repairs because they travel to school
31
daily from Penticton to Kelowna for classes, the Financial Aid office
might link them up with the College’s Auto Service department and
give them an emergency bursary, with the Auto Service department
providing free labour,
• Encourages students to use the CanLearn website for financial

planning and to calculate loan repayment scenarios.
• Provides one-on-one interviews at a student’s request (usually

when they are about to graduate), to discuss their accumulated
debt load, how to go about repaying their student loans, and debt
management tools.
• Helps students navigate debt management tools or repayment

processes when they receive notice of student loan consolidation
and don’t know what the document means or can’t start paying and
what to know what their options are.
• Helps students to reinstate previously defaulted loans to put them

back in good standing so they can access debt management tools
and additional funding in order to complete their studies.
• ‘College 101’, a new 1 ½ to 2-hour evening information session for

parents and students (of all ages), includes an overview of
admission requirements and processes, plus information on B.C.
Student Assistance, scholarships, bursaries and how to navigate
the financial aid website to search for awards.
• First year student orientation includes student success initiatives,

encourages students to engage with each other and their
professors to build a sense of community, and includes
presentations by all student support providers on campus to let
students know where they can get help if they need it.
• Learning Centres are located at all campuses where students are

provided with assistance in English, Math and Science on a drop-in
basis. Teaching Assistants run Accounting Study Halls for domestic
and international students.
• The Registrar notifies the Deans of Faculties prior to de-registration

of students for non-payment of fees. The Deans then speak to the
students, sometimes uncover underlying personal or financial
reasons for not paying tuition and then refer them to the student
support providers at the institution.
32
• The Employment Services Office helps students with resumes and
finding jobs.
• The counselling department is planning to establish a student

success program at the beginning of each term starting with the
06/07 year.
Royal Roads University, Victoria
• Visits each loan-eligible program that is nearing completion, to

explain the repayment process and the importance of keeping a
student loan in good standing. Also included are handouts of lender
contact information and instructions of how to update one’s address
with all lenders they’ve dealt with. The Financial Aid Advisor
includes their contact information and invites them to call them
anytime if they have further questions.
• The FAO is a staff member of the University Life office, such that
for each program intake, they visit the classes and introduce their
role. They then take the students on a campus tour. Students are
more willing to seek help from someone when they have seen them
in a relaxed, social setting.
• Since the non-traditional term system results in tuition installments

that do not coincide with the student loan disbursement schedule,
the FAO works closely with Finance to ensure that student loan
recipients are not penalized due to late payments and that, in some
cases, to allow for personalized payment plans to be put in place to
fit the loan disbursement schedule.
Selkirk College, Castlegar
• Scholarships and bursaries assist in supporting student success,

particularly helping high need students pay for basic educational
and living expenses.
33
• Peer tutors, supervised through the College’s Student Access and
Support Department, are hired under the work study program to
help students who are struggling with their studies.
• Disability Advisors assist students with learning disabilities in

accessing equipment or other tools helpful to their success.
Simon Fraser University
• Due to the close connection with Student Advising and Student

Records, the Financial Aid Office is provided a list of students
required to withdraw. These students receive an e-mail and a letter,
but are not required to see a Financial Aid Advisor as part of the
process.
• Some withdrawing students are given information through one-on-

one advising. General topics include important dates the student
should know about for repayment and information on other
assistance programs. If a student is in good standing and drops
below the 60% course load level, there is no specific outreach
carried out.
• Regular ‘unsuccessful semester’ reports are generated for BCSAP

recipients.
• Communicates with those about to graduate via e-mail and/or the

Financial Aid department website, to assist them in understanding
the expectations for repayment and the consequences of default.
• Special programs are run for students on academic probation, as

well as for those required to withdraw from the University.
• General awareness-building of support services that increases

retention and student success. For example, all services offered by
Student Services and the faculties as well as services offered to
students by paraprofessionals (e.g. peer educators, student
learning commons.)
Thompson Rivers University, Kamloops
34
• Tracking withdrawals, and following up with faculty re attendance

problems.
• Does presentations on ‘Financing Your Education’ for high school

students and parents.
Trinity Western University, Langley
• Uses loan repayment materials available from US organizations,

customizing their discussion for Canadian students.
• Planning to implement an on-line exit counselling process for Canadian

students, using a US process that already exits.
• Fact that tuition is very expensive means that students do careful

planning before they attend.
• The university’s Student Life department has an extensive retention

program that involves Financial Aid.
• All students are required to take University 101.
University College of the Fraser Valley, Abbotsford
• Students have a strong relationship with frontline staff and often return
to discuss interest relief options.
• The ‘Comprehensive Financial Planning Workbook’, available at:

http://www.ucfv.bc.ca/future/cfpe/CFPE.htm , was developed to
decrease the amount of student loans required by students and to
increase their financial assistance awareness. Students are referred to
this resource on a regular basis. e.g. those accessing the college
financial aid website. Numerous references to the publication are made
on the general college website.
35
• At Orientation each year, students are given a complementary copy of
the ‘Debt Free Graduate’ and encouraged to read it.
• Students are monitored on a weekly basis for 60% course load. When
they fall below the 60% required course load, Financial Aid Office staff
contact them by phone or e-mail to advise them of the financial
consequences of dropping classes. Often students re-enroll when they
still have a good chance of successful completion. This process builds
a strong relationship and students remain in close contact with the
Financial Aid Office when making decisions that will affect them
negatively.
• Institutional bursaries have been developed to assist the neediest

students meet some of their need unmet by the student loan program.
• The Financial Aid Office has a close relationship with Educational

Advising, Counselling and Disability Services, and when students need
these resources to be successful referrals are quickly made. Financial
concerns expressed by students to staff in these other support areas
are also quickly referred to Financial Aid.
• The Student Union Society has developed a very close relationship

with Financial Aid through the emergency funds they raise to assist
students in crisis, who would otherwise be unable to complete their
studies. Financial Aid administers these funds.
• When the provincial work study program was terminated, the college
developed a work study program open to all students. Students are
able to work on campus, allowing them flexible hours to fit around
classes and an opportunity to have experience related to their field of
interest. Work study positions connect students to the college and
faculty, creating a sense of community and a commitment to program
completion.
• Retention issues have become an area of interest for faculty and

administration, which will result in greater completion and thus
decreased default rates.
• Counsellors continually run student success workshops on study skills.
• Student life activities have increased to encourage engagement with

other students and the school. Activities such as Orientation,
Intramurals, and the Leadership Institute have been successful in
bringing students together and keeping them to program completion.
36
The University of British Columbia, Vancouver
• Presented by UBC’s Financial Aid & Awards in conjunction with the

National Student Loan Service Centre, Exit Workshops are offered to
students who are graduating. They provide information on how to
handle their student loans after graduation and options if they are not
able to repay.
• Workshops on student loans are presented to Faculty and Staff.
• Workshops are delivered at orientations.
• When students’ course registration drops below the required level, e-

mail notifications are sent to them prior to the university withdrawing
their loan eligibility.
• The university offers ‘Imagine UBC’, plus Student Success and

Student Leadership Programs.
The University of Northern British Columbia, Prince George
• Reports are generated by the financial aid office on a regular basis that
identify students who drop below the 60% (‘full-time’) course load.
• The drop/add form advises students to consult with the financial aid
office if they are receiving student loan funding and are dropping
classes.
• The financial aid office follows up on students (on student assistance)

who have been identified by faculty for non-attendance or heading
towards failing grades.
• The financial aid office refers students they consider ‘at risk’ of
withdrawing and/or failing to other support services to assist them stay
in school and/or plan to return to school after time out.
37
• Financial aid & awards presentations are part of Orientation.
• Financial assistance information is provided to prospective students by

University Liaison staff during visits to high schools.
• Students placed on academic probation have the option of returning

earlier than the normal ‘one year out’, by submitting an appeal. The
student may be referred to counselling or other services as a condition
of granting the appeal.
University of Victoria
• Student Awards and Financial Aid presentations are included as part of

all student orientation programs.
• Offers bursary, work study and emergency loan programs that assist in
the retention of students in the margins.
• Reports are generated by the SAFA office on a weekly basis that

identify students who drop below a 60% course loan or 40% for
students with disabilities.
• Phones students who drop below their required course load to inform
them of the implications on their student assistance. As a result, it is
often discovered that the student is concurrently enrolled at UVic and
another institution or has dropped below a full course loan for medical
reasons. The students can be advised of split enrolment and/or appeal
policies and procedures to keep their loan in good standing.
• Refers students considered ‘at risk’ of withdrawing and/or failing to

other support services (e.g. Counselling Services, Health Services) to
assist them to stay in school or withdraw from studies with medical
approval.
• SAFA is included in the Grad Year Orientation program to provide

students with information about the repayment options available prior
to their departure from the University.
• SAFA presentations are offered throughout the year at the Student

Transitions Centre on campus.
38
• Copies of ‘The Debt-free Graduate’ are distributed by SAFA at all
parent and student orientation sessions.
• Orientation programs are offered for both new and transfer students,
and for parents.
Vancouver Community College
• Generates reports twice monthly that identify students who drop below
the 60% (‘full-time’) course load level or who withdraw.
• In some situations, the financial aid office contacts students who drop
their course loads below ‘full-time’, to inform them of the implications
for their student assistance.
• The financial aid office follows-up on students with student assistance

who have been identified by faculty for non-attendance or heading
towards failing grades.
withdrawing and/or failing to other support services such as
counselling. In some cases, students are referred to take Math or
English upgrading either concurrently or before resuming post-
secondary studies. Financial aid works with students who need to
‘insert’ back into advanced levels of a program to complete their
credential.
• Students are encouraged to use the www.bcsap.bc.ca website for

financial planning and to review repayment scenarios.
• Financial assistance information is provided by the college’s Community

Liaison staff members.
• Information on topics such as loan repayment and interest relief is

distributed at events such as the College Information Night and New
Student Orientation.
• There is a plan to resume the practice of having financial aid staff visit
individual classes during the first Orientation weeks of classes in
39
September, to provide information on student loans and financial
assistance.
• Non-credit (‘Ready, Set, Go’) Student Success courses are offered.
• Financial Aid works closely with the Disability Services Advisor to assist
students and ensure that they are aware of financial assistance
opportunities.
40
Selected Canadian Post-secondary Institutions
Acadia University, Wolfville, Nova Scotia
• A campus-wide Financial Literacy program is being developed, with the

objective of improving the knowledge base of students and parents to
ensure they are aware of what needs to be done re financing the student’s
education.
Algonquin College, Ottawa, Ontario
• Distributes the brochure ‘OSAP Repayment’ which covers when and how
to repay student loans, trouble encountered in repaying loans, revision of
terms for those having trouble repaying due to unemployment or low
income, returning to school with outstanding loans, what happens if loans
are repaid, and the availability of non-profit credit counselling.
• Gives information sessions to Business classes as part of their Student

Success class.
• Along with other student services (see below), sets up an information

kiosk twice a year, handing out brochures about OSAP and the repayment
brochure as well.
• When students withdrawing in person are referred by the Registrar’s

Office (see below), they are counselled re their responsibilities related to
their loans, and provided a copy of the ‘OSAP Repayment’ brochure.
• Students withdrawing on-line are sent a repayment information sheet.
• Twice a year the National Student Loan Service Centre presents Loan
Repayment seminars, advertised via the College’s student e-mail account
info board, as well as flyers posted all over campus. This year an ad will
be placed in the College newspaper run by students, with an
accompanying article about the seminar written by a student.
41
• The Registrar’s Office requires students approaching them in person to
withdraw to have a form signed by the Financial Aid office.
• Student Services departments (e.g. Counselling, Employment Services)

together with Academic departments, promote student retention
throughout the year. Twice a year student services departments put up
kiosks in high traffic areas to provide information to students.
Brock University, St. Catherines, Ontario
• In order to establish a relationship with the Student Awards and Financial

Aid office prior to admission, applicants are e-mailed the name and e-mail
address of their financial aid officer, with instructions on how to apply for
government student loans and relevant financial aid at the university.
• During orientation (and just before government loan pickup), Student

Awards and Financial Aid has ‘mandatory’ information sessions for first-
time borrowers which provide targeted information on their loan and begin
to develop financial literacy regarding budgeting, money management,
credit etc.
• A regular e-mail communication strategy is in place to inform OSAP

applicants of deadlines and other issues regarding their loan (e.g.
students who aren’t applying for a government loan but have loans from
the past are reminded to apply for interest-free status.)
• Annual student loan repayment seminars are presented by the National

Student Loan Service Centre and promoted by the Student Awards and
Financial Aid office. Targeted e-mail invitations to sessions held on
campus are sent to graduating students requesting RSVP’s.
• The university has a Retention Committee which designs and coordinates

retention initiatives, with membership including the Director of Student
Awards and Financial Aid.
• Financial Peer Assistants offer one-on-one or group assistance on

budgeting, money management and credit, working with Residence Life
staff and Health Services.
42
• All students who leave the university are requested to complete an Exit
Survey, asking about the issues driving the decision to leave. Next year
the survey is being expanded to students who do not return.
Canadian University College, Lacombe, Alberta
• All graduating seniors are personally contacted prior to April

commencement with information regarding ‘what happens to loans now’, a
one-page letter that includes contact numbers for the National Student
Loan Service Centre. Included is a brochure that discusses options and
programs such as Interest Relief and gives contact numbers for those
programs. As a result, the Financial Aid office receives calls in the fall
from grads asking ‘what was it you told us last spring?’
• Information about loans, repayment options and links are on the

institutional website.
• Course withdrawal forms require a signature from Student

Finance/Financial Aid, so that students are informed about the need to
maintain a 60% course and the implications for college scholarships.
• Students on US government aid are required to complete the on-line

entrance counselling and are advised about on-line exit counselling.
Canadore College, North Bay, Ontario
• Presents one portion of the ‘Beat the Rush’ program (see below),
including having participants do an on-line budget exercise and referring
them to the Financial Aid office to pick up information on loans and
repayment. Students who complete the budget portion of Beat the Rush
are issued a gold card which allows the student into a fast-track line to
pick up their loan documents on the first day of term.
• The College’s Campus Life department coordinates four ‘Beat the Rush’
sessions each summer to provide new and returning students information
on services such as Registrar’s Office, Financial Aid, Special Needs, and
Athletics.
43
Durham College and the University of Ontario Institute of Technology,
Oshawa, Ontario
• Confirmation of Enrolment signing is done in mandatory group sessions

(around 30 students each) during which emphasis is placed on the
importance of repaying OSAP student loans, the consequences of default,
repayment options and programs in place if students end up not being
employed at repayment time. Students are given advice on creating and
sticking to a budget to be successful. A cardboard folder is distributed
(see below). After the first three weeks of classes, documents are then
distributed in one-on-one appointments.
• The cardboard folder issued to students includes the following inserted in

it: (a) a four-page summary of financial aid and awards programs,
including information about the OSAP process, loan repayment, Interest
Relief, and the importance of keeping lenders updated; (b) an OSAP
repayment Q & A brochure, which includes important contacts such as the
CanLearn website, Durham’s Financial Aid & Awards office and bank
student loan 1-800 numbers; (c) a student loan summary form where
students are encouraged to record the details of each loan they receive,
with details on how much borrowed, when, how much of it will be issued to
the school and how much remains for the student; and (d) a budget sheet.
Students are advised to use the folder to store all copies of each loan
document and be sure they have all the information they need at
graduation to stay organized financially.
• Arranges for Lender representatives to come on campus to provide

repayment information, with door prizes to encourage attendance.
• Takes advantage of every personal contact with students to emphasize

the importance of repayment and the consequences of default.
• Has sufficient bursary funding to help students who may otherwise have to
withdraw due to financial hardships.
• Makes sure every OSAP recipient receives a copy of the OSAP

Repayment brochure at graduation.
Laurentian University, Sudbury, Ontario
44
• Offers repayment seminars for students in late winter each year.
• Every student who withdraws from full-time studies is sent information on

their loan repayment obligations.
• Loan repayment information is sent to every student who applies to

graduate.
• An ‘Introduction to University’ program is offered for students who don’t

quite meet the entrance requirements. They are allowed to register in 60%
of a full course load, must take non-credit courses in areas such as study
skills, and are monitored closely to ensure they receive the support they
need to succeed.
• A mentoring and support program which is offered to students who

experience academic difficulties in their first year has proven to be very
effective in keeping students in post-secondary.
McMaster University, Hamilton, Ontario
• Informs students of the implications of dropping courses through the

intranet McMaster University Gateway to Student Information (MUGSI),
and at the time of loan pick-up.
• Has offered loan repayment sessions targeted to upper level

students/those close to graduation, in cooperation with the regional
representative of the National Student Loan Service Centre. Student
participants are given a booklet ‘Information for Graduating Students’ as
well as FAQ sheet (how do I repay my loan? what if I don’t secure a job?
etc.)
• Has held budgeting workshops as a way of showing students that making

wise decisions in their spending now can save them a substantial amount
of money in interest payments later.
• The department website http://sfas.mcmaster.ca/ includes an interactive

‘Budget Builder’. Coming soon is a budgeting game, intended to be a real
eye-opener to spending and an influence on student spending habits.
45
• The Centre for Student Development offers services to help students with
academic skills, personal counselling services to students with disabilities
and a peer helper program.
• Each faculty office provides students with guidance through the help of a
student advisor who provides assistance with course choices and
direction.
Ontario College of Art and Design, Toronto, Ontario
• Implementing a series of information sessions on financial aid issues

throughout the year, including having the National Student Loan Service
Centre on site to deliver repayment seminars. Information sessions are
promoted via the web, e-mail (general and targeted), campus
communications, posters, and the most effective - telephone campaigns,
including calls to recent graduates to invite them to participate.
• Mandatory one-on-one debt management counselling was developed for

inter-session students, who tend to be the College’s students with the
highest debt risk. These were extremely successful in helping students
understand how they accumulated their debt, their loan responsibilities,
and various strategies for repayment. Often after these sessions, students
moved away from their reliance on student loans and self-funded for the
remainder of their studies. (Note that this mandatory counselling is no
longer offered since the preparation and the sessions themselves were
labour intensive and lengthy and proved to be unmanageable as a
strategy.)
• Detailed information is included in withdrawal letters regarding debt

management responsibilities and resources.
• Targeted e-mail is sent to recent grads, providing basic information and

inviting them to come back on campus for one-on-one advising or to
attend info sessions.
• The development of alumni services and communications, as well as

enhanced academic counselling and career advising support, is
anticipated to improve student satisfaction and engagement. It is hoped
that these initiatives will have an indirect (and positive) impact on student
loan repayment.
46
Queens University, Kingston, Ontario
• The publication ‘Financing Your Queen’s Education’ is sent to students

with their offer of admission. Such information is provided to Arts and
Science students as part of their orientation.
• When students obtain their government assistance, they are provided with
an information sheet re what to consider in relation to government
assistance.
• Borrowers who cease to maintain the appropriate course load required for
government assistance are sent a letter informing them of their status and
encouraging them to contact the National Student Loan Service Centre.
• At least two Awards Office staff are available each business day to
conduct ‘financial advising’ sessions, with residence dons encouraged to
contact the Awards Office to arrange these sessions. (Note: most first year
students are living in residence.)
• The Queens Awards office has hosted two professional development

sessions for Awards Officers, with the focus on how to be effective in
financial advising sessions with students.
• Participates with the AMS/student government in a ‘Financial Aid

Awareness’ week, during which sessions are held on financing a Queen’s
education.
• The Faculty of Applied Science offers spring sessions to students who are
struggling, with the aim of helping them to successfully complete first year
and better prepare for the second year.
• Academic Advisors remind students that if they drop a course and are
loan borrowers, they should contact the Student Awards Office.
Red Deer College, Red Deer, Alberta
• An Edulinx representative visits the campus in March each year and

meets with students to talk about consolidation of student loans. A table is
47
set up in a visible area of the college, with good signage, and students
stop and ask questions.
• An information sheet with details about loan consolidation is given to

students along with their graduation credential if they have had
government student funding.
• Information about consolidation is published in the bi-weekly student

newspaper in March.
• The Registrar and Coordinator of Student Funding and Awards meet with
the chairpersons of programs that show high default rates to discuss
strategies for informing students about their responsibilities with student
loans.
Sheridan Institute of Technology and Advanced Learning, Oakville, Ontario
• At loan pick-up time each year, each student who is receiving a loan is
provided with a 3-page information package which includes information
from (a) the Ministry of Training, Colleges and Universities, including
contact information for assistance; and (b) Sheridan, which details where
and how the student loan funding is to be directed (i.e. towards tuition fees
and other education-related costs) and directions to contact the Financial
Aid office if there is any change to the student’s personal circumstances
(program change, withdrawal, reduction in course load, marital status,
financial status, residence change, etc.) The package also outlines the
consequences of failing to meet these obligations.
• Communicates with all students who have been placed under academic
progression warning status to ensure that they are aware of the
requirements to continue their eligibility for student loan funding. All
students who have been flagged with this status are checked to ensure
they have fulfilled the academic requirements to retain their student loan
eligibility.
• When a student has been identified as having academic progression

issues, a one-on-one interview is initiated to ensure the student is aware
that a program withdrawal or reduction is course load (below 60%) will put
the student into loan repayment status in six months.
• Hosts ‘Loan Repayment Seminars’ given by Edulinx on an annual basis.
48
• A healthy financial bursary program is intended to help students who have
financial need. In addition to providing funding for students ineligible for
government loan assistance, bursaries can also be used by the student to
repay student loan overpayment or to make monthly loan repayments
while they are still in school.
• A Sheridan work/study program is in place for students who do not qualify

for the provincially-funded work study program, to assist them with
education and living costs and/or help them make monthly loan
repayments or cover loan overpayments while they are still in school.
University of New Brunswick, Fredericton
• Budgeting 1001 Workshops are offered to first year students to increase

awareness of all financial options. Comedy skits are also used with first
year students to provide a fun, interactive way to provide information.
• The financial aid office website includes a sample budget and budget
worksheet, Edulinx Government Student Loan Repayment Information, a
student debt fact sheet, information on ‘Assessing Your Net Worth: Living
on Your Own After Graduation’ and a link to the CanLearn website.
http:www.unbf.ca/studentservices/departments/finaid/
• Repayment seminars offered two or three per year, with direct e-mail sent
to graduating students inviting them to the seminar. Handouts, which
include information on Interest Relief, Debt Reduction in Repayment, as
well as provincial resources, are sent to those students who do not attend.
Individual appointments are given to students who require more
personalized information.
• A handbook developed by the Fredericton campus financial aid office is

provided to U.S. students, with repayment strategies reviewed one-on-one
if requested.
University of Ottawa, Ontario
• Hosts loan repayment sessions given by representatives of the National

Student Loan Service Centre, publicized on campus and via e-mails to
fourth year students.
49
• Financial Counsellors are available on a daily basis to meet with students,
assisting them with their budgets and informing them of the impact of
debts during and after their studies.
• The university has several programs to help students succeed in their

studies and complete their academic goals, including University 101, study
skills counselling, writing help and resources and a student mentoring
centre.
University of Toronto, Ontario
• An information sheet is mailed to students who have withdrawn or reduced

their course load to make them aware of loan repayment, interest relief,
return to classes, and updating their address.
• A National Student Loan Service Centre representative comes on campus

to do workshops on Repaying Your Student Loans. It is advertised as
‘Including Tips on Saving Yourself Money.’
• The Financial Aid office website has detailed information about repayment
of student loans:
http://www.adm.utoronto.ca/fa/counselling/loan_repayjment.htm
• E-mail reminders are sent to students about keeping their previous

student loans interest-free if they are not continuing to borrow.
• Institutional funds assist students who might otherwise have to withdraw

due to financial reasons.
50
Provincial/Territorial Governments
Alberta
• Currently in the preliminary stages of developing a Loan Repayment

Communication Strategy intended to educate students on loan repayment
as well as debt management tools (Interest Relief and Revision of Terms).
A number of communication tools are being explored, including different
channels of communications: (a) direct to students via phone calls, Inter-
active Voice Response (IVR) messaging, e-mail messaging and letters at
different points throughout their loan lifecycle; (b) improved
communications to students in their educational institutions (e.g. posters);
(c) improved communications to financial aid administrators to assist in
educating themselves and students.
• Has an extranet site that all registered educational institutions can access
for information on student assistance. The documents approved under the
Pan Canadian Designation Policy Framework (the framework itself, plus
the Best Practices Guidelines) are being added to the site.
• Offers module-based training to educational institutions in various aspects

of student loans. The addition of a training module relating to default
prevention strategies is being explored.
• In August 2005 introduced self-serve web-based entrance and exit

counselling sessions as a default prevention strategy through their service
provider Edulinx. Within the context of their communication strategy will be
working on promoting the use of these tools.
• Alberta’s service provider Edulinx offers Repayment Preparation Seminars

in educational institutions.
• Has numerous guides distributed and available to students and parents

which range from planning for post-secondary to exiting post-secondary.
The guides are available on the Alberta Learning Information Site (ALIS)
at: http://www.alis.gov.ab.ca/studentsfinance/prepare.asp
• Guides to educate students and parents about planning for post-

secondary include PowerPoint presentations (with instructor’s notes).
• Mails an Exit Guide to all students in their final year of study. The Exit
Guide, which describes strategies for paying back a student loan, can be
found at: http://www.alis.gov.ab.ca/pdf/studentsfinance/exit.pdf
51
• As of August 31, 2006, a self-service website will be available to allow
students to manage their loan on their own by revising the terms of loan,
including changing their payment amount, the loan term (how long they
will take to repay the loan), and/or the payment date.
• During 2006/07, a communication strategy will be put in place to educate

students about loan repayment and debt management tools, such as
revision of terms and interest relief. These include posters in educational
institutions, wallet cards for students, envelopes for student to store loan
documents which provide key messages and contact information, review
of communications to students to ensure language is plain and key
messages are easy to find, promotion of entrance and exit counselling, as
well as the new on-line self-service options, and an outbound e-message
campaign which will provide students with key messages at specific points
during their loan life cycle.
• Has a new website ‘Learning Clicks’ which includes a Grade 9 to 12

Checklist of things students need to do to plan for post-secondary,
including financial planning. A section entitled ‘Look for Free Money’
describes how to do a scholarship search. A budget calculator is included,
as well as a link to ‘Stretch Your Dollars: Budgeting Basics’, a publication
of the Credit Counselling Services of Alberta. An on-line version of the
publication ‘Money 101, Alberta’ is available, which includes sections on
educational costs, budgeting techniques, financial management skills, and
sources of financial assistance. Learning Clicks can be found at:
http://www.alis.gov.ab.ca/LearningClicks
British Columbia
• Jointly funded and developed a four-year pan-Canadian communications

initiative aimed at encouraging K-12 students and their families to plan for
post-secondary education.
• Initiated and funded, partnered with the Canada Millennium Scholarship

Foundation, an advisory committee of K-12 teachers and their
development of a Career Planning 10 teacher resource (an interactive
DVD re post-secondary options).
• Funded the B.C. Business Council’s development of an interactive career

choices DVD ‘The Third Option’ (current edition called ‘The Third Option
Rocks’), which includes information on expected salary, can be rented free
at Rogers Video stores in B.C.
• Sends student loan brochures to K-12 administrators as a resource for

teachers and to be distributed to targeted students/families.
52
• Re-designing the B.C. Student Assistance website to provide more access
for K-12 administrators, students and families to tools for post-secondary
planning, financing, career and school choices.
• Re-designing the BCSAP website to provide easier access for financial aid
administrators to tools, products and services including downloadable
presentations and products, research papers, a new html version of the
BCSAP policy manual, a new loan administration manual, a sample B.C.
Student Loan Improvement Plan, and loan administration forms and
letters. It is expected that the sample B.C. Student Loan Improvement
Plan will provide schools with tools to improve the administration of
BCSAP at their institutions, resulting in a reduction of withdrawals and
unsuccessful completions, and an increase in loan repayment rates.
• Developed series of brochures on various components of student financial

assistance, including planning, applying and repaying.
• Promotes public post-secondary institution-based initiatives by: (a)

engaging Presidents (promoting student success through the
accountability framework and attaching student aid policy requirements to
government funding); (b) promoting discussion through sponsoring and
publishing research on default indicators and school-based improvement
techniques; (c) providing funding for pilot projects, such as North Island
College’s efforts to develop an on-line system for early identification of
high-risk students and enhanced communications; (d) supporting financial
assistance officers and departments.
• Actively engages private school owners and operators in strengthening

designation requirements and supporting their default performance
improvement efforts (e.g. sponsoring/providing awareness conferences
and presentations, assisting in cross-industry development of ‘The
Student Success Plan’, assisting in the development of the B.C. Career
Colleges Association Loan Administration Workshop and Default
Management Workshop.)
• Presented ‘The lifecycle of the loan’ (in PowerPoint) to graduating

students at the University of Victoria to provide them with an
understanding of their obligations and options with respect to B.C. Student
Loans.
• Randomly conducts site visits to private institutions to provide them with

information and tips on improving their BCSAP administration efforts.
Approximately 20 to 30 schools are visited annually.
53
• Participated in the development of the Pan Canadian Designation Policy
Framework which formally authorizes engaging post-secondary
institutions in student loan performance improvements.
• Actively participates and promotes federal/provincial Inter-governmental

Consultative Committee on Student Financial Assistance (ICCSFA) sub-
committees examining and developing administrative improvements and
research-based policy/funding options focused on student success (e.g.
access, retention and repayment assistance).
• Initiated and co-chaired federal/provincial committee to promote and

develop default management initiatives, including policy and
administration enhancements, and awareness of best practices (e.g.
sponsoring/providing presentations to institutional/industry conferences.
• Conducted a pilot project through the ICCSFA Special Investment Fund

(SIF) on communications with students during their grace period (six
months following graduation). New and innovative communication
materials were developed, with monitoring done of the enhanced
materials’ success in reducing default rates for a small sample of students.
• Working with the BC Student Loan Service Provider: (a) implemented a

new customer service satisfaction survey; (b) conduct contract
performance audits and cohort analysis to develop operational and policy
improvements (e.g. recently obtained B.C. Interest Relief policy changes
aimed at reducing application barriers and providing opportunity for on-line
application for B.C. Interest Relief; (c) conducted a review of all form
letters and web communications; (d) introduced very successful on-line
PC and tele-banking services; (e) initiated a mass e-mail campaign to
remind students to update their address and interest-free status; (f)
initiated a more integrated process between the service provider and the
Student Services Branch to update student addresses, using government
resources, to prevent skips and get students back on track prior to them
becoming serious defaulters; (g) assisted the service provider to enhance
their website and include an updated log-in process for students to access
their on-line statement, including message ‘pop-ups’ to inform them of
important information such as ‘default status - contact the service provider
immediately’; (h) enhanced the flexibility of the loan repayment process by
allowing borrowers to make their scheduled payment at any time in the
month, rather than just the last day.
• Will be soon posting a new Request for Proposals to re-procure a service

provider with an enhanced focus on performance, client service and
portfolio analysis.
54
• Reorganizing Student Services Branch resources to better support
institutions by improving access to student financial assistance application
information and loan repayment data, improving communications products
and web-based services, and improving access to dedicated school
liaison staff.
• Targeting SSB resources to the prevention of defaults by establishing the

Debt Management Unit, which will work both internally and externally (with
the service provider, and in the case of borrowers beyond 150-day default,
with the government collection agent) to manage student debt.
Manitoba
• Offers to assist post-secondary institutions to help them develop entrance

and exit sessions and other tools. Several schools have requested a
review of their in-house literature/presentations/correspondence about
loan repayment, and they have worked with these schools to improve
content and message.
• Provides copies of a brochure on loan repayment and debt reduction

opportunities ‘From Start to Finish’ to schools on an annual and requested
(supplementary) basis.
• Is in the early stages of developing a debt servicing tool, which will be in

the form of web-based exit counselling, to assist students with post-
secondary planning.
• Has five student advisors assigned to educational institutions in a

caseload system. The advisors work directly with students at the schools
or with school staff to educate and advise about loan repayment, as well
as provide help with rudimentary financial planning.
• There are two government loan counsellors who follow up with students
after they’ve graduated. They offer options to ‘at-risk’ graduates such as
extended interest relief and reduced payments on their Manitoba Student
Loan in order to ease some of the financial pressure on graduates who
might otherwise default on their loans.
• Has details regarding loan repayment on their website:

http://www.gov.mb.ca/educate/sfa/pages/repaying_en.html
• Delivers ‘From Start to Finish’ Orientation/Repayment Sessions, targeted

at student loan recipients enrolled in participating Private Vocational
institutions. These PowerPoint presentations are one-hour in duration,
with the initial half hour for students in the first six weeks of their program
55
and the last half hour for students in the final six weeks. The objective is to
ensure students are aware of (a) their responsibilities as students and as
borrowers; (b) their rights and responsibilities as consumers; (c) the
Canada Millennium Scholarship Bursary and Manitoba Bursary eligibility
requirements; (d) loan repayment requirements; and (e) debt reduction
opportunities. Handouts include PowerPoint presentation notes, brochures
detailing Canada/Manitoba Student Aid programs, ‘Start to Finish’
brochures, and contact information. Individualized handouts are produced
for students detailing sample repayment calculations of both their federal
and provincial loans.
• Has delivered exit sessions facilitated by a Manitoba student advisor at a

number of private vocational institutions to cover student repayment
responsibilities. The exit session for Manitoba Emergency Services
College covered both Manitoba and Saskatchewan loan recipients. Private
institution Scientific Marvel requires that all students who complete a
program must attend an exit session, and will not issue students a diploma
until they have attended the session. Optional attendance exit sessions
are hosted by Academy of Learning (Winnipeg North and Winnipeg
South), while CDI College hosts optional attendance entrance sessions.
Manitoba student advisors have made presentations of the entrance/exit
material at Robertson College to all their incoming students.
• Delivers orientation sessions to student loan recipients enrolled in

Hairstyling/Esthetics programs. Facilitated by Manitoba student advisors,
the monthly sessions involve mandatory attendance at a PowerPoint
presentation and discussion which covers similar content to the ‘Start to
Finish’ orientation sessions outlined above. Additional material and
handouts are included on the Apprenticeship component attached to the
Hairstyling/Esthetics field. Students do not get their loan documents until
they attend the session. In addition, loans to these students are disbursed
in four installments (two CSLP, two MSLP) instead of two (one CSLP, one
MSLP) to reduce the risk to the overall portfolio since these programs
have substantial dropout and default rates.
New Brunswick
• The Post-Secondary Liaison Officer provides debt management

sessions to graduating students at public and private institutions on an
as needed basis.
• The anticipated release date of the new designation policy to

educational institutions is tentatively scheduled for June 2006.
56
• After the release of the designation policy, Student Financial Services
(SFS) will be working with and encouraging institutions to come up with
strategies and practices to improve their students’ loan repayments.
• Plans are in the works to hire a Designation Officer to work with

educational institutions on, among other things, improving the loan
repayment rates of students.
Newfoundland
• Offers both student and parent information sessions across the

province in conjunction with local career fairs in the fall and spring.
Typically the target audience includes high school students and
parents. In the past two years have partnered with Regional Economic
Zonal Boards who organize events for their local high schools.
Presentations include details of the Newfoundland and Labrador
Integrated Student Loan process and on the importance of making
informed career decisions that will ensure students graduate post-
secondary in a timely manner with reasonable student loan debt.
• About two years ago offered a brief information session on repayment

to the private schools in St. John’s, targeting students about to
graduate. Students were informed about Interest Relief and debt
reduction opportunities and of the importance of ensuring the lender
has up-to-date contact information. One of the esthetics/hair design
private schools has requested this session yearly.
• There are two Career Counselling Specialist positions within the

Student Financial Services Division of the Department of Education.
The goal is to provide career/financial counselling and information to
Newfoundland and Labrador students to ensure they make sound
career decisions, leading to timely completion of post-secondary with a
reasonable student loan debt.
• The students that are seen by counsellors are typically from internal
referrals (i.e. within the Student Financial Services Division). Reasons
for referral include: (a) current high student debt and requesting loans
for a subsequent program; (b) switching programs of study after the
permissible time (after the end of the fourth semester or midpoint of the
program); (c) Not completing the program of study in a timely manner;
(d) High unmet need of over $5,000 per semester; (e) Referrals from
Management, Appeals Officer and/or Senior Assessment Officer.
• Once the student is contacted and an appointment scheduled, the

following information is reviewed with the student. Review career plan:
57
(a) academic background; (b) limitations and supports; (c) suitability as
it relates to interest, values and perceived attitudes; (d) labour market
awareness. Review financial plan: (a) cost of training; (b) accumulated
debt; (c) projected debt; (d) total debt ratio; (e) available resources; (f)
feasibility.
Nova Scotia
• A planned ‘pilot’ project will focus on students who are either entering
repayment or are in repayment, with the intention to work with schools
to provide supports to such students (exit counselling, Interest Relief
information etc.) A ‘Case Management’ pilot will involve identification
of students who’ve missed their first or second payments, and then, in
cooperation with schools, attempts will be made to contact the student
to remediate the loan through strategies such as Interest Relief. While
a number of educational institutions have expressed interest in this
project, the privacy office is being worked with to determine if individual
repayment information can be discussed with schools. (A pilot was
previously tried using only the Nova Scotia Student Assistance Office,
but out of two hundred and twenty-five attempted contacts, only five
students were actually spoken to.)
• A second potential ‘pilot’ involves a private school strengthening their

admission process. For many of the private schools in Nova Scotia, a
student can enroll as a mature student, with entrance requirements
being very flexible. In many cases, students who do not have the
academic background to be successful enroll and end up withdrawing.
This school is looking at running a ‘bridge’ program similar to
upgrading, in which students would receive a better academic
foundation before enrolling in post-secondary studies. Students would
not be eligible for government assistance during this upgrading. Once
the school is satisfied that the student has a more solid academic
foundation, the student would enroll in the post-secondary program
and apply for assistance as necessary.
Ontario
• Institutions in Ontario are required to participate in the annual

collection of graduation rates by program. These rates and default
rates by program and institution are accessible to prospective students
from the Ministry/OSAP website.
• Schools with Ontario Student Loan default rates above 25% for three
consecutive years, or a most recent rate above 40%, are required to
engage an experienced third-party default management firm to assist
58
the school in developing a default reduction plan. Schools must also
file a mid-year and year-end report on implementation of the plan.
• Institutional Admissions/Enrollment Responsibilities and Initiatives

Identified in Default Reduction Plans:
o review graduation rates by program

o review standards for admission and adequacy of entrance
exams and minimum test scores
• Institutional Financial Aid Responsibilities:
o meet with students to develop a budget

o inform students of other financial resources that might be
available (e.g. scholarships/bursaries)
o conduct entrance loan counselling sessions and provide
information materials (e.g. grace period, consolidation process,
interest relief program, revising the term of the loan, implications
of default for the student, contact information for loan servicing)
o develop and administer a student loan repayment quiz
o conduct an exit loan counselling session and provide
information materials
• Data Management and Monitoring Implementation of the Institutional

Default Reduction Plan:
o track student attendance and academic progress

o develop a form/protocol for students to provide the institution
with address/telephone number updates
o Excel file with a layout for monitoring implementation of the
plan, the names of loan recipients and the dates that each
student is provided with each of the default management
services and the date they complete or withdraw from the
program.
o for schools that are required to submit a plan, the Ministry also
requires a detailed report from the default management firm
upon its implementation.
o some schools engage the default management firm to maintain
contact with students when they exit school and enter
repayment. The default management firm reminds students of
repayment obligations, repayment assistance programs, and
loan servicing contacts.
• Institutional Career Services/Placement Assistance Activities:
o develop a Resource Centre for Career Information.
59
o conduct Grace Period Employment Surveys and Counselling
• Collecting and Sharing Institutional Information on Student Outcomes:
o the Ministry coordinates an employment survey of graduates

through a common independent and experienced survey firm.
Schools pay the survey firm for completed surveys.
o schools have the option to select an enhanced survey whereby
they can gather information on graduates’ post-study incomes
and whether they obtain employment in a related field.
o information on graduation rates, graduate employment rates,
and default rates by program are posted on the Ministry and
institutional websites for prospective students to review.
o institutions also use this information to assess relative
performance of programs. Some institutions have elected to
discontinue or significantly revise programs that have poor
outcomes.
• Institutional Enhancement and Expansion of Relations with Employers:
o many post-secondary institutions in Ontario, including all public

colleges, conduct surveys of employers’ satisfaction with
graduates.
Quebec
• Student loan repayment information is included in every publication

and on the Aide financiere aux etudiants website.
• Repayment obligations are clearly explained on the loan agreement

forms, and a description of a ‘borrower in default’ is provided.
• A letter is sent after the student has completed his or her full-time
studies indicating the start date for student loan repayment, how
interest is calculated, the Deferred Payment Plan available for those
with financial problems and where to call for further information.
• A loan remission program is available for students who have

completed a Bachelor’s degree or college-level technical training within
the normal time limits. When remission is granted, 15% of the student
loan debt is forgiven. Information on this program is available on the
Aide financiere au etudiants website and in all financial aid publications
at post-secondary institutions in the province.
60
Saskatchewan
• Is in the process of developing a number of tools for use by

department staff and educational institutions. Types of materials that
have been developed or are being developed include:
o a student handbook which provides information on the entire

loan cycle.
o a Repayment Quick Tips sheet that provides information about
the repayment process and repayment assistance tools that are
available:
http://www.sasked.gov.sk.ca:7777/branches/sfa/student_loans/p
dfs/repaymentquicktips.pdf
o PowerPoint presentations on repayment that can be used by
educational institutions.
o PowerPoint demo on how to use the CanLearn on-line account
manager
o a fact sheet for students with dependents that outlines the other
federal and provincial income supplements that are available to
individuals both while they are in school or working (e.g.
Saskatchewan has an employment supplement program and a
rental supplement programs for families, as well as the
Saskatchewan Child Benefit).
• Department staff will provide information sessions to students at the

educational institutions at the request of the institution.
Yukon
• While there are no territorial loans, the Yukon Grant program provides
non-repayable assistance to students.
• Students who come to the government Financial Aid office are

informed of the eligibility criteria and have access to the Canada
Student Loan pamphlets. Clarification is provided if students have
enquiries regarding repayment. Students are advised to seek
assistance through the Federal government’s Interest Relief/Extended
Interest Relief, Revision of Terms and Debt Reduction in Repayment
programs.
• The Yukon financial aid booklet addresses some generic questions
61
Summary of Institutional Strategies & Practices for
Improving Loan Repayment
Introduction: Key Players in the Government Loan System
Given the research findings on factors that play a role in defaults, it is clear that
increasing repayment rates on government student loans should be viewed as a
multi-faceted challenge.
There appears to be a number of key dimensions related to defaults, as well as a

number of central players in the government loan system, all of whom can be
seen to have a role and responsibility related to preventing defaults and thus
maintaining the integrity of the system. The latter include federal and provincial
governments who create legislation, regulations, policies and processes which
determine who gets loans, how students obtain and repay them, and what
student rights and responsibilities are. The activities and approach of Student
Loan Service Providers, contracted by governments to assist in loan delivery and
repayment and provide information to students at various stages of their loan
experience, also have an impact. Post-secondary institutions, dealing directly
with students and providing information and assistance as they apply for and
receive their loans, and, in some cases during repayment, have opportunities to
have an impact on student loan defaults. And of course, the students themselves
have a role to play and choices to make regarding how they approach meeting
their student loan debt obligations.
This chapter summarizes selected strategies, practices and tools currently used
by Canadian post-secondary institutions intended to impact student government
loan repayment rates. They are described in four categories: (1) before post-
secondary; (2) early stages of enrolment; (3) in-school and late stages of
enrolment; and 4) after students leave school. Included are both strategies that
are directly intended to improve loan repayment and those that appear to be
indirectly impacting repayment, some via an institutional commitment to student
success and completion of programs. It is important to recognize that these
school-based activities are only one part of a much larger picture, where other
key players in the government loan system have equally important roles to play
in limiting defaults.
1. Institutional Approaches to Improving Loan Repayment:

Before Post-secondary
• Financial aid advisors have a booth or display at open houses and other
prospective student orientation or recruitment events to inform prospective
students as early as possible about the cost of post-secondary and
62
financial assistance options. (BC Institute of Technology, Douglas College;
Okanagan College; Okanagan College)
• Information on topics such as loan repayment and interest relief is

distributed at events such at the College Information Night and New
Student Orientation. (Vancouver Community College)
• Special, targeted information sessions are offered to specific groups of

students such as those completing preparatory/pre-entry programs (BC
Institute of Technology)
• Spring financial assistance workshops are delivered to regional high

schools. (College of the Rockies)
• As of 2006/07, Student Success 1100 will be offered on a co-credit basis

to high school students. (Douglas College)
• A new evening information session ‘College 101’ for parents and students
(of all ages) includes an overview of admissions requirements and
processes, plus information on government and institutional student
assistance. (Okanagan College)
• Presentations on ‘Financing Your Education’ are given for high school

students and parents. (Thompson Rivers University).
• Students are encouraged to use the www.bcsap.bc.ca website for

financial planning and to review repayment scenarios. (Vancouver
Community College)
• The ‘Comprehensive Financial Planning Workbook’, available at

http://www.ucfv.bc.ca/future/cfpe/CFPE.htm was developed to decrease
student reliance on loans and increase financial assistance awareness.
(University College of the Fraser Valley).
• The timeline for provision of information on the college offerings and

timetables has been moved up, to allow students to plan their studies and
timetables early and thereby commit to a full program of study. (Langara
College)
• A financial aid & awards publication summarizing available government

and institutions student assistance is circulated to prospective students.
(BC Institute of Technology.)
• Financial assistance information is provided to prospective students by

University/Community Liaison staff during visits to high schools.
(University of Northern B.C.; Vancouver Community College)
63
• Has developed a brochure ‘How to pay for college and not break the bank’
(Douglas College)
• Comprehensive information on all types of government and institutional

student assistance is provided on the financial aid department website.
(British Columbia Institute of Technology, Douglas College).
• Students are referred to the financial planning tools at the federal

government’s CanLearn website. (BC Institute of Technology; Douglas
College)
• Expensive tuition means that students do careful planning before they

attend. (Trinity Western University)
• In order to establish a relationship with the student aid office prior to

admission, applicants are e-mailed the name and e-mail address of their
financial aid officer, with instructions on how to apply for government
student loans and relevant financial aid at the university. (Brock University,
Ontario)

Early Stages of Enrolment
• The university has a Retention Committee that designs and coordinates

retention initiatives, with membership including the Director of Awards and
Financial Aid. (Brock University, Ontario)
• The Registrar and Coordinator of Student Funding and Awards meet with
the chairpersons of programs that show high default rates to discuss
strategies for informing students about their loan responsibilities. (Red
Deer College, Alberta)
• A handbook describing available student services is circulated to new

students, to ensure they are aware of assistance and resources available
to them when in school. (Camosun College) Queens University has a
similar publication ‘Financing Your Queen’s Education’ sent to students
with their offer of admission.
• Student Success workshops or courses are offered by a Student Service

or educational departments, many having a financial aid component (B.C.
Institute of Technology; Langara College; University College of the Fraser
Valley) Student Success 1100 at Douglas College carries 3 college
credits; College of the Rockies has a plan to offer Essential Skills for
College Success ECS 100; Okanagan College’s Counselling Department
64
is planning to establish a student success program at the beginning of
each term beginning with the 06/07 year; University 101 is mandatory for
all students at Trinity Western University. Non-credit ‘Ready, Set, Go’
Student Success courses are offered. (Vancouver Community College)
• ‘Imagine UBC’, plus Student Success and Student Leadership programs

are offered by the university, while the financial aid and awards office
presents workshops at orientation. (University of B.C.)
• Financial aid presents information sessions to Business classes as part of

their Student Success course. (Algonquin College, Ottawa)
• The university has several programs to help students succeed in their

studies and complete their academic goals, including University 101, study
skills counselling, writing help and resources, and a student mentoring
centre. (University of Ottawa)
• Financial aid & awards presentations are part of Orientation. (University of

Northern B.C.; University of Victoria)
• Orientation programs are offered for both new and transfer students, and
for parents. (University of Victoria)
• Student awards and financial aid presentations are offered throughout the
year at the Student Transitions Centre on campus. (University of Victoria)
• A financial literacy program is planned. (Langara College, Acadia

University)
• Copies of the Murray Baker’s book ‘the Debt Free Graduate’ are given out
at student orientation and/or student success workshops/courses (College
of the Rockies; Douglas College; Okanagan College; University College of
the Fraser Valley).The University of Victoria distributes copies at all
parent and student orientation sessions. Okanagan College also
distributes the recent version of the CanLean booklet.
• There is a plan to resume the practice of having financial aid staff visit
individual classes during the first Orientation weeks of classes in
September, to provide information on student loans and financial
assistance. (Vancouver Community College)
• An on-line student orientation has been added to the college website

(Douglas College).
• First year orientation includes student success initiatives, encourages

students to engage with each other and their professors to build a sense
65
of community, and includes presentations by all student support providers
on campus. (Okanagan College)
• Financial aid group sessions are offered in the summer, to provide

information on all types of student aid and loan repayment. (Douglas
College, although noting a drop in enrolment lately).
• A student services day/open house is held every fall to introduce students

to available services. (BC Institute of Technology, Douglas College)
• The financial aid office sets up an information kiosk twice a year with other
Student Services, handing out brochures about government student
assistance and loan repayment. (Algonquin College, Ottawa)
• The awards office participates with the student government in a ‘Financial

Aid Awareness’ week, during which sessions are held on financing a
Queen’s education. (Queens University)
• The financial aid administrator is on the staff of the University Life office,
such that for each program intake, he/she visits the classes and
introduces their role. The class is taken on a campus tour, establishing a
good rapport that will encourage the students to go to financial aid for
assistance (Royal Roads University)
• An Office of New Students will be established in September 2006 to

facilitate the transition of new students to the college, and their retention
into second year and beyond. (Douglas College)
• Student-use computers are available in the reception area to allow

students to obtain web-based financial aid information and apply for
government aid on-line. (BC Institute of Technology, Douglas College)
• Educational and admissions polices ensure that only qualified students

(those who are sufficiently prepared, and have a good chance for
success) are admitted. (College of the Rockies; Justice Institute of B.C.).
Douglas College introduced a new English requirement in the fall 2004.
• A degree audit program is planned for implementation, one that allows

students to monitor their own progress, and for intervention by student
services. (College of the Rockies)
• During orientation, and just before government loan document pickup, the
student aid office has ‘mandatory’ information sessions for first-time
borrowers which provide targeted information on their loans and begin to
develop financial literacy regarding budgeting, money management,
credit, etc. (Brock University, Ontario)
66
• Confirmation of Enrolment signing of loan documents is done in
mandatory group sessions during which emphasis is placed on repaying
Ontario student loans, the consequences of default, repayment options
and programs for students unemployed at repayment time. Students are
given advice on creating a budget and a cardboard folder to be used to
store all documents and correspondence regarding their loans. (Durham
College, Ontario)
• At loan pickup time each year, every loan recipient is given a 3-page
information package on government assistance and institutional directions
(e.g. if a portion of the loan will be directed to tuition fees, and a reminder
to contact the financial aid office if there is any change in the student’s
personal circumstances such as course load reduction). The package also
explains the consequences of failing to meet these obligations. (Sheridan
Institute of Technology & Advanced Learning, Ontario).
• The college’s Campus Life department coordinates four ‘Beat the Rush’
sessions each summer to provide new and returning students information
on services such as the Registrar’s Office, Financial Aid and Special
Needs. The Financial Aid section includes an on-line budget exercise,
that when completed, allows the student to be issued a gold card which
allows the student into a fast-track line to pick up their loan documents on
the first day of term. (Canadore College, Ontario)
• An ‘Introduction to University’ program is offered for students who don’t

quite meet the entrance requirements. They are allowed to register in 60%
of a full course load, must take non-credit courses in areas such as study
skills, and are monitored closely to ensure they receive the support they
need to succeed. (Laurentian University, Ontario)

In-school and Late Stages of Enrolment
• Up-to-date, detailed bulletin boards on government and other types of

student assistance are used to encourage students to investigate all
assistance options. (British Columbia Institute of Technology)
• A regular e-mail communication strategy is in place to inform government

assistance applicants of deadlines and other issues regarding their loan
(e.g. those with past, not current loans, are reminded about maintaining
interest-free status.) Brock University, Ontario
67
• Group information sessions on student loans and other forms of
assistance are given to faculty and staff, (University of B.C.; B.C. Institute
of Technology)
• Attendance policies are in place for vocational programs. (College of the

Rockies)
• Learning Centres located at all campuses provide students with

assistance in English, Math and Science on a drop-in basis. (Okanagan
College)
• Teaching Assistants run Accounting Study Halls for domestic and

international students. (Okanagan College)
• Financial Peer Assistants offer one-on-one or group assistance on

budgeting, money management and credit, working with Residence Life
staff and Health Services. (Brock University, Ontario)
• Communication with students through school intranet e-mail messages,

targeted to announce important developments such as award and bursary
deadlines. (BC Institute of Technology, Douglas College)
• Students are informed of the implications of dropping courses through the

university intranet e-mail system and at the time of loan pickup. (Queens
University; McMaster University, Ontario)
• Academic Advisors remind students that if they drop a course and are
loan borrowers, they should contact the Student Awards Office. (Queens
University)
• Has used the back of washroom doors to communicate award deadlines

to a captive audience. (BC Institute of Technology)
• A plain language brochure is planned to be sent to the student after they

receive their loan, to include information on a student’s responsibilities,
maintaining the minimum course load, plus contact information for the
financial aid office. (North Island College)
• The financial aid website includes an interactive ‘Budget Builder’, with a

budgeting game coming soon. (McMaster University, Ontario) website
http://sfas.mcmaster.ca
• Budgeting 101 Workshops are offered to first year students to increase

awareness of all financial options. Comedy skits are also used with first
year students to provide a fun, interactive way to provide information.
(University of New Brunswick)
68
• Reports are system-generated on a regular (e.g. weekly or bi-weekly)
basis from the student records system to identify student withdrawals at as
early a stage as possible. Students are then contacted to ensure they
know the implications of withdrawal, with some students re-enrolling in a
full-course load (College of the Rockies; Douglas College; Emily Carr
Institute; Langara College; Malaspina University College; North Island
College; University College of the Fraser Valley; University of Victoria)
• In some situations, the financial aid office contacts students who drop their
course loads below ‘full-time’, to inform them of the implications for their
student assistance. (B.C. Institute of Technology, Vancouver Community
College)
• When students withdrawing in person are referred by the Registrar’s

Office, they are counselled re their loan responsibilities and provided a
copy of the Ontario Student Assistance Program brochure. They have a
form that must be signed by the financial aid office. Students withdrawing
on-line are sent a repayment information sheet. (Algonquin College,
Ottawa)
• Students identified as having dropped below a full-course load (60%, or

40% for students with permanent disabilities) are often discovered to be
concurrently enrolled at the university and another institution, or have
dropped below a full-course load for medical reasons. The students can
be advised of split enrolment and/or appeal policies and procedures to
keep their loan in good standing. (University of Victoria)
• An information sheet is mailed to students who have withdrawn or reduced

their course load to make them aware of loan repayment, Interest Relief,
re-instatement of interest-free status upon a return to classes, and the
need to update their addresses. (University of Toronto)
• Plans are being made to develop a pop-up box such that when a student
goes to withdraw on-line, the pop-up advises them to contact the financial
aid office. (Capilano College)
• The course drop/add form advises students to consult with the financial
aid office if they are receiving student loan funding and are dropping
classes. (University of Northern B. C.)
• Government student assistance recipients cannot withdraw from the

school without the signature of a financial aid advisor, in order to ensure
students are aware of implications of withdrawal and the detail of loan
repayment. (Capilano College; Emily Carr Institute; Institute of Indigenous
Government; Canadian University College, Alberta)
69
• The financial aid office talks to all students who withdraw, advising them of
their responsibilities and options. (North Island College)
• Due to the close connection with Student Advising and Student Records,
the financial aid office is provided a list of students required to withdraw
from the university. These students receive an e-mail and letter from
financial aid, but they are not required to see a financial aid advisor as part
of the withdrawal process. Some withdrawing students are given
information through one-on-one advising on loan repayment and other
assistance programs. (Simon Fraser University)
• Borrowers who cease to maintain the appropriate course load required for
government assistance are sent a letter informing them of their status and
encouraging them to contact the National Student Loan Service Centre.
(Queens University)
• Student withdrawals are tracked by the financial aid office, and follow-ups
done with faculty re attendance problems. (Thompson Rivers University)
• Students can be referred to the financial aid office by instructors who note
students are not attending class, failing courses etc. The student is then
contacted to be reminded of the requirement to attend their classes and
their loan repayment responsibilities. (Emily Carr Institute; Institute of
Indigenous Government; Langara College; University of Northern B.C.
Vancouver Community College)
• Retention issues have become an area of interest for faculty and

administration, which will result in greater completion and thus decreased
default rates. (University College of the Fraser Valley)
• The Registrar’s Office notifies Deans prior to the de-registration of

students for non-payment of fees. The Deans speak to the students and if
they uncover underlying personal or financial issues for not paying tuition,
they refer the students to student support providers on campus.
(Okanagan College)
• Students placed on academic probation have the option of returning

earlier than the normal ‘one year out’, by submitting an appeal. The
student may be referred to counselling or other services as a condition of
granting the appeal. (University of Northern B.C.)
• A new success program has been implemented that allows a student, in

the first semester of having been placed on Academic Probation, to meet
with a counsellor to develop a plan for success, which when signed by the
student and the counsellor, obligates the college to offer remedial
70
assistance where necessary. The student can thus return to studies after
only one semester out. (Langara College)
• The financial aid office communicates with all students placed under
academic progression warning status to ensure they are aware of the
requirements to continue their eligibility for student loan funding. All
students flagged with this status are checked to ensure they have fulfilled
the academic requirements to retain their student loan eligibility. A one-on-
one interview is initiated to ensure the student is aware that a program
withdrawal or reduction in course load (below 60%) will put the student
into loan repayment status in six months. (Sheridan Institute of
Technology & Advanced Learning, Ontario)
• At least two awards officers are available each business day to conduct
‘financial advising’ sessions, with residence dons encouraged to contact
the department to arrange these sessions. (Queens University)
• In order to limit overawards (and prevent potential defaults as a result of

high debt), students in specific programs will not be allowed to apply for
B.C. Student Assistance covering the fall, spring and summer terms.
(Capilano College).
• Emergency loans, and in some cases Emergency Bursaries are made

available to retain students in financial crises: (BC Institute of Technology;
Camosun College; Douglas College; Okanagan College)
• Safeway gift certificates are used in emergency to help students with food
costs. (Douglas College).
• Scholarships and bursaries assist in supporting student success,

particularly helping high need students pay for basic educational and living
expenses. (Selkirk College)
• Institutional bursaries have been developed to assist the neediest

students cover some of their need unmet by the government student loan
program. (University College of the Fraser Valley)
• Bursary, work study and emergency loan programs are available to assist
in the retention of students at the margins. (University of Victoria)
• Students are required to complete personal learning plans and meet with
academic advisors to clarify their objectives (Camosun College)
• The Student Union Society has developed a close relationship with

financial aid through the emergency funds they raise to assist students in
71
crisis who would otherwise be unable to complete their studies. (University
College of the Fraser Valley)
• The college work study program provides on-campus employment with

flexible hours to fit around classes and an opportunity to have experience
related to a student’s field of interest. Work study positions connect
students to the college and faculty, creating a sense of community and a
commitment to program completion. (University College of the Fraser
Valley)
• An effective system of inter-departmental referrals is in place among

student service departments such as Counselling and Disability Services
to ensure students receive support to address their problems. (Camosun
College; Douglas College; North Island College; Okanagan College;
University College of the Fraser Valley; Vancouver City College)
withdrawing and/or failing to other student support services to assist them
stay in school, withdraw from studies with medical approval, and/or plan to
return to school after time out. (University of Northern B.C.; University of
Victoria)
• In some cases when students have been identified as ‘at risk’, they are
referred to take Math or English upgrading either concurrently or before
resuming post-secondary studies. Financial aid works with students who
need to ‘insert’ back into advanced levels of a program to complete their
credential. (Vancouver Community College)
• Small class sizes and low instructor/student ratios allow ‘at risk’ students
to be easily identified and monitored. (Justice Institute of B.C.)
• Eight remedial/reading and review days are adjacent to critical exam

points to reduce the withdrawal rate. (Justice Institute of B.C.)
• Peer tutors, supervised through the College’s Student Access and Support
Department, are hired under the work study program to help students who
are struggling with their studies. (Selkirk College)
• A mentoring and support program offered to students who experience

academic difficulties in their first year has proven to be very effective in
keeping students in post-secondary. (Laurentian University, Ontario)
• Special programs are run for students on academic probation, as well as

for those required to withdraw from the university. (Simon Fraser
University)
72
• There is general awareness-building for support services that increases
retention and student success. e.g. all services offered by Student
Services and the faculties as well as services offered to students by
paraprofessionals through peer educators and student learning commons.
(Simon Fraser University)
• E-mail reminders are sent to students about keeping their previous

student loans interest-free if they are not continuing to borrow. (University
of Toronto)
• One-on-one interviews are provided at a student’s request, usually when

they are about to graduate, to discuss their accumulated debt load, loan
repayment and debt management tools. (Okanagan College)
• Students are helped to reinstate previously defaulted loans to put them

back into good standing so they can access debt management tools and
additional funding in order to complete their studies. (Okanagan College)
• A plain language brochure will be sent at the end of the student’s last
funded semester or when they withdraw, to advise them of consolidation
and options available it they can’t pay. (North Island College)
• The financial aid office visits each loan-eligible program that is nearing
completion, to explain the repayment process and the importance of
keeping a student loan in good standing. Contact information for the
financial aid office and lenders is included (Royal Roads University).
• The expectations for loan repayment and the consequences of default are
communicated to students about to graduate via e-mail and/or the
financial aid department website. (Simon Fraser University)
• The financial aid office uses loan repayment materials available from U.S.
organizations, customizing the information for Canadian students. An on-
line exit counselling process is planned for Canadian students, using a
U.S. process that already exists. (Trinity Western University)
• Student Life activities have increased to encourage engagement with

other students and the school. Activities such as Orientation, Intramurals
and the Leadership Institute have been successful in bringing students
together and keeping them to program completion. (University College of
the Fraser Valley)
• The university’s Student Life department has an extensive retention

program that involves financial aid. (Trinity Western University)
73
• Presented by the financial aid office in conjunction with the National
Student Loan Service Centre, workshops are offered to students either
generally, or targeted to those who are graduating. They provide
information on how to handle their student loans after graduation and
options if they are not able to repay. (University of B.C; Algonquin College,
Ottawa: Brock University, Ontario; McMaster University, Ontario; Sheridan
Institute of Technology & Advanced Learning, Ontario; University of
Ottawa; University of Toronto) Durham College, Ontario, uses door prizes
to encourage attendance.
• Loan repayment seminars are offered two or three times per year, with
direct e-mail sent to graduating students inviting them to the seminar.
Handouts, with information on Interest Relief, Debt Reduction in
Repayment, as well as provincial resources, are sent to those students
who do not attend. Individual appointments are given to students who
require more information. (University of New Brunswick)
• A National Student Loan Service Centre representative visits the campus

in March each year to talk to students about consolidation of their loan,
with a table set up in a visible area of the college. (Red Deer College,
Alberta)
• An information sheet with details about loan consolidation is given to

students along with their graduation credential if they have had
government student funding, and consolidation information is published in
the bi-weekly student newspaper in March. (Red Deer College, Alberta)
• All graduating seniors are personally contacted prior to April

commencement with information regarding ‘what happens to loans now’, a
one-page letter that includes contact numbers for the National Student
Loan Centre. Included is a brochure on options such as Interest Relief.
The financial aid office receives calls in the fall from grads asking ‘what
was it you told us last spring?’ (Canadian University College, Alberta)
• Student awards and financial aid is included in the Grad Year Orientation
program to provide students with information about loan repayment
options prior to their departure from the university. (University of Victoria)
• Loan repayment information is sent to every student who withdraws and to

everyone who applies to graduate. (Laurentian University, Ontario)
4. Institutional Approaches to improve Loan Repayment:

After Students Leave School.
74
• Students have a strong relationship with frontline staff and often return to
discuss Interest Relief options. (Okanagan College)
• Students are assisted in navigating repayment processes and debt

management tools which they receive notice of student loan consolidation.
(Okanagan College)
• The college Employment Services Office helps students with resumes and
finding jobs. (Okanagan College)
• Targeted e-mail is sent to recent graduates, providing basic information

about loan repayment and inviting them to come back to campus for one-
on-one advising or to attend information sessions. (Ontario College of Art
& Design, Toronto)
• All students who leave the university are requested to complete an Exit
Survey, asking about the issues driving their decision to leave. In the
future the survey is being expanded to students who do not return. (Brock
University, Ontario)
• As indicated in the College and Institute Student Outcomes Survey,

Institute graduates show strong employment and earning outcomes, which
should result in a direct correlation with the graduates’ ability to repay their
student loans. (Justice Institute of B.C.)
75
Appendix A:
Preventing Government Loan Defaults

Summary of Selected References
Association of Universities and Colleges of Canada. Submission to Human

Resources Development Canada in response to the Consultative Document
entitled Designation and Default - A Consultation Paper. Ottawa. September
1999. Available at:
http://www.aucc.ca/publcations/reports/1999/default_09_13_e.html
In response to the proposed “Core Elements of a Framework for Designation”,

the AUCC indicated it feels strongly that, for student loan purposes, designation
of government-chartered, not-for-profit universities and colleges should be
automatic, and that designation of private career colleges for student loan
purposes should be based on their complying, on an on-going basis, with
rigorous and effectively enforced provincial licensing and regulatory
requirements. The response also outlined an understanding that designation
should be of institutions as a whole and not of individual academic programs. In
response to the proposed “Roles and Responsibilities of All Stakeholders in
Reducing Student Loan Defaults”, AUCC indicated that ‘type of institution
attended’ should be added to the list of factors that may directly or indirectly
influence student defaults. They suggest that when default levels among the
former students of a particular educational institution are well above the level for
other institutions, this should trigger an analysis to identify the causes of the
default level and to identify remedial actions. Factors are proposed to be taken
into account when identifying the causes of high default levels at specific
institutions: (a) the economic climate; (b) whether borrowers actually
consolidated their loans prior to being placed into default; (c) public institutions’
public access mandates to reach out to non-traditional and disadvantaged
students; (d) completion rates and the reasons for non-completion; (e) whether a
private vocational institution has conformed to provincial licensing and regulatory
requirements; (f) whether lenders of the bulk of defaulted loans have met their
service obligations and have default levels consistent with other lenders; (g)
whether the educational institution has a student financial assistance office
staffed by qualified personnel, with service available to all students; (h) whether
the educational institution is meeting its obligations to provide information to
students regarding student assistance, to lenders and to governments, regarding
a student’s last known address, and to government when a student has
withdrawn from full-time studies; and (i) where an educational institution makes
specific marketing claims about job placement rates to recruit students, whether
it has substantiating information.
76
Christman, Dana. Multiple Realities: Characteristics of Loan Defaulters at a
Two-Year Public Institution. Community College Review, Vol. 27, No 4.
Spring 2000. pp 16 to 33.
Provides an analysis of previous research related to four perspectives: economic

(human capital theory, ability-to-pay theory), sociological (student-institution fit,
structural/functional perspective, act of deviance), psychological (attitude
formation), and federal government perspectives (holding institutions
accountable for defaults).This study looks at borrowers who defaulted on their
student loans from 1993 to 1995, using data from the US Department of
Education’s National Student Loan Data System. 39 variables were analyzed.
Gender was found to be unrelated to default behavior while a number of
variables were: low ACT scores, being Native American or African American,
coming from a low income family, have a GED, being over 25 years old, being
enrolled in less than two semesters, GPA less than 2.00, failing any classes,
losing financial aid thru Student Financial Aid suspension, being on Student
Financial Aid probation.
Cofer, James & Somers, Patricia. An Analytical Approach to Understanding

Student Debt Load Response. NASFAA Journal of Student Financial Aid,
Vol. 29, No 3. Fall 1999. pp 25 to 44.
The influence of student debt load on college persistence was examined using
data from the 1992-93 National Post-secondary Aid Survey, plus a model of
student persistence that includes either accumulated debt or threshold of
accumulated debt. It was found that the threshold of accumulated debt was more
effective in explaining student debt response. The researchers found that
borrowers in repayment expressed anger at having to assume more debt than
students in the decade earlier.
Coleman, Marcia & Miller, Chris. Solving the Retention Puzzle: The Link
Between Retention and Financial Literacy. Presented at the USA Funds
Symposium: It Takes A Campus to Retain a Student. February 2005.
Available at:
http://www.usafunds.org/forms/financial_aid/Financial_Literacy_Symposiu
m.ppt
Outlines risk factors associated with students dropping out of college before
completing their program in five categories: (a) academic; (b) personal; (c) life
issues; (d) social; (e) institutional. Describes the Noel-Levitz Student Satisfaction
Inventory (SSI), a tool for campus-wide assessment to understand the student
experience inside and outside the classroom. The SSI allows institutions to
capture both a satisfaction score and an importance score so they can define the
strengths and the challenges at their institution, and to compare their results to
national scores. The inventory includes a section on financial literacy. Suggests
using student peer counsellors in a campus financial literacy program.
77
Conway, Chris. The 2000 British Columbia Universities Early Leavers
Survey. The University President’s Council of British Columbia. January
2001. Available at:
http://www.tupc.bc.ca/student_outcomes/publications/early_leavers
The BC Universities Early Leavers Survey asked 5,991 early leavers from the
University of BC, Simon Fraser University, the University of Victoria and the
University of Northern BC why they attended university and why they left, what
they thought of their university experience and what their educational and
employment outcomes were. Early leavers were defined as those non-graduating
students who last registered at one of the four institutions 1997/98, summer 1998
or winter 1998/99 and who had not since re-registered in the winter 1999/2000 as
of November 1, 1999. The report indicates that of every 100 students who start
undergraduate studies, between 30 and 50 will leave prior to degree completion.
Of the total early leavers, over half attend another educational institutional within
24 months of their departure. 59% of the early leavers were ‘true leavers”, that is
those whose attrition was unplanned and permanent. Reasons given by ‘true
leavers’ for departing university: (a) poor academic performance, including but
not limited to, the student being required to withdraw; (b) inadequacy of financial
resources to continue study; (c) the decision (arrived at sometime after the
commencement of study) to transfer to another institution; (d) changes in
personal/life circumstances, including illness and family obligations; (e) the
search for, or commencement of employment; and (f) dissatisfaction with, or
unavailability of, the academic program in which the student was interested.
Council of Ministers of Education Canada. Designation Policy Framework.

November 2004. Available at:
www.cmec.ca/postsec/DesignationPolicyFramework.en.pdf
Initially produced by the Intergovernmental Committee on Student Financial

Assistance, the Pan-Canadian Designation Policy Framework was approved by
CMEC in April 2003. The Framework was based on four principles: (a) taxpayer
protection; (b) accountability and informed choice; (c) consumer protection; and
(d) complementarity to other post-secondary education policies; and was
developed to be used by provinces and territories to establish designation
policies and criteria for educational institutions operating within their jurisdiction.
Among the common elements required to be in the provincial designation policies
are that institutions provide students with adequate consumer protection and
information on which to make an informed choice about their post-secondary
education, and that designated institutions are also expected to focus on student
success, improve ways to retain students, and ensure students improve their
overall employability. The Framework indicates that risk to student assistance
programs would be assessed through a measurement of three types of
78
performance: (a) portfolio performance (e.g. repayment and default data); (b)
institution performance (e.g. administrative compliance, student support
services); and (c) student performance (e.g. completion, employment and
withdrawal data). Among the Framework’s “Common Elements” described in
Attachment A is reference to the requirement for institutions to provide student
financial assistance information and counselling, plus several requirements, to be
at the option of the province/territory, including (a) requiring institutions to have a
withdrawal/exit management plan to assist students; and (b) requiring institutions
to meet specific requirements for student retention prior to designation.
Dynarski, Mark. Who Defaults on Student Loans? Findings from the

National Post-secondary Student Aid Study. Economics of Education
Review, Vol. 13, No. 1. March 1994. pp. 56 - 68.
Based on National Post-secondary Student Aid data, this study analyzed the
characteristics of student loan borrowers, and compared defaulters and non-
defaulters along various dimensions, including (a) demographic profiles; (b)
socio-economic characteristics; and (c) educational attainment. Borrowers from
low-income households and minority groups, high school dropouts, and students
attending proprietary schools and two-year colleges were found to be at higher
risk of default.
Federal/Provincial/Territorial Working Group on Designation. Best

Practices Guidelines: “School Tools” for Improving Repayment
Performance. 2005
Describes factors causing default as (a) students poorly informed of financial aid
information; (b) students’ poor understanding of loan obligations and terms; (c)
withdrawals from school; (d) unmanageable non-education debt; (e) family
status; (f) personal and financial management; (g) unemployment and low
income relative to debt obligations. Factors supporting repayment are listed to
include (a) students’ good understanding of loan obligations and terms; (b) clear
admission criteria; (c) program completion; (d) employment and income
adequate to meet debt obligations; (e) students well prepared for personal and
financial management. Outlines a Default Prevention Plan built on borrower
education, alliance building, leveraging technology, personal and financial
management, loan obligation enforcement, student retention and employment
initiatives/services.
Flint, Thomas. Predicting Student Loan Defaults. Presented at the Annual

Meeting of the Association for the Study of Higher Education, Memphis.
1996. [Plus an article of the same title in the Journal of Higher Education,
Vol. 68, No. 3. May-June 1997. pp 322 - 354.]
79
Refers to previous default research based on economic, sociological and
psychological models. This study analyses data from the 1987 National Post-
secondary Student Aid Study, looking at over 1,000 borrowers from 510
institutions. Variables included: student background, school choice, student
academic achievement, loan counselling and post-college, point-of-survey
variables (the last category including disposable income, congruence between
students’ undergraduate major and latest job held, marital status and number of
dependents.) Findings suggest that economic variables show no significant
association with default (i.e. parental income levels, number of friends/relatives
willing to assist with loan payments, types of financial aid received in college,
number of loans and totals borrowed, the degree of post-college support), with
the exception of borrowers’ own disposable incomes during repayment.
Sociological variables also showed no relation to defaults, with these including
parental educational and occupational levels, institutional status indices for
selectivity, degree levels, students’ status indices such as academic majors, and
post-college marital status. It was found that controlling for student background,
school choice, academic and other characteristics, there were no differences in
repayment behavior related to whether counselling was done before, during, or
after enrolment, by either schools or lenders. Individual student characteristics
found to relate to default behavior included: gender, race, age, cumulative GPA,
disposable income and congruence between major and latest job held. Includes
an extensive bibliography.
Hansen, Kristie, Fitzgibbon, Tim, Craig, Jo-Ann, & Hopkins, Gary. Loan
Repayment. Presented at the US Department of Education Federal Student
Assistance Electronic Access Conference, San Diego. 2003. Available at
http://www.ifap.ed.gov/presentations/03GeneralSessLoanRepayment.html
Outlines the life cycle of a government loan, with four stages: (a) in school (from
loan origination until graduation or drop below half time; (b) in grace (from end of
school for six months; (c) repayment (from point of leaving grace through
successful repayment or discharge; (d) default (from 270 days of delinquency or
until loan is cured.) Includes a table on national student loan default rates,
showing a high in 1992 of 22% to around 5% by 2003. Describes the common
characteristics of delinquent and defaulted students: having withdrawn from
school and didn’t complete their studies, did not get the benefit of their full 6-
month grace period as a result of late enrolment notification, and having incorrect
telephone numbers. Outlines default prevention initiatives of the Iowa College
Student Aid Commission, as well as Rutgers, the State University of New Jersey,
the latter including the Rutgers Default Prevention Listserve. Describes the US
Department of Education’s default processes.
Harrast, Steven. Undergraduate Borrowing: A Study of Debtor Students

and Their Ability to Retire Undergraduate Loans. NASFAA Journal of
80
Student Financial Aid. Vol. 34. No. 1, 2004. Available at:
http://www.nasfaa.org/Annualpubs/Journal/Vol34n1/Harrast.PDF
A study at Southeastern University that found a number of factors related to the

student loan debts of recent graduates: college major, ethnicity, grade point
average, age and the number of semesters required to complete a degree.
Gender was found to be unrelated to student loan balances. It was concluded
that a large percentage of recent graduates have student loans above lender-
recommended levels, raising a concern that the benefits of higher education are
being slowly eroded by the increasing debt burdens of graduates. The study
suggests that the most controllable factor influencing student loan debt is the
number of semesters to graduation. The author concludes that minimizing the
time to graduation can be accomplished with academic preparation and planning
and thus comments that students who need additional preparation before
undertaking a university degree program may wish to do so at a lower-cost
institution.
Hildebrand, Sherry & Walsh, Mark. Default Prevention Training for Financial
Aid Professionals. Web Conference sponsored by the U.S. Department of
Education and Mapping Your Future. March 15, 2006.
Described statistics on the characteristics of U.S. Direct Loan defaulters: (a) 84%
didn’t receive full grace period due to late enrolment notification; (b) 71%
withdrew without completing studies; 56% had incorrect phone numbers; 83%
were not successfully contacted by phone during the 360-day collection effort
during delinquency. Suggested that schools can take advantage of the
opportunities to minimize delinquent borrowers while the borrower is enrolled,
before the borrower leave school, and after the borrower is gone. Strategies
while the borrower is enrolled include: (a) entrance counselling; (b) borrower
education; (c) development of financial literacy; and (d) ensuring students
understand their rights and responsibilities. Proposed that, while the borrower is
enrolled, the emphasis should be placed on initiatives that support student
success. Stresses the importance of schools identifying their potential defaulters.
The ‘before the borrower leaves school’ component described as including exit
counselling and ensuring that borrower contact information is correct. After the
borrower has left the school, late stage delinquency assistance techniques are
suggested to rescue borrowers from default. These include identifying the
severely delinquent borrowers, reaching out to them (using a ‘soft touch’), and
connecting the student to student loan servicer via a three-way call. Refers to the
U.S. Department of Education’s Sample Default Prevention Plan and the many
components of Mapping Your Future, including on-line counselling, the student
loan repayment calculator, budget calculator and Debt/salary wizard.
Howell, Shari & Deike, Randy. Do Entrance and Exit Counseling Make a
Difference in Title IV Default Rates? Presented at the US Department of
81
Education Federal Student Aid Conference, New York. Spring 2004.
Available at http://www.ifap.ed.gov/presentations/04Session12.html
Provides an overview of research carried out at Pennsylvania State University,

developed as part of PSU’s participation in the Experimental Sites Initiative, to
study the impact of entrance and exit counselling on student government loan
defaults. Using an experimental design involving separate student cohorts given
(a) government regulatory entrance and exit counselling; (b) modified exit
counselling but no entrance counselling; and (c) no counselling, the students
were tracked for seven years from 1996 to 2003. At no point in the research
were the differences in default rates among the student cohorts found to be
statistically significant, suggesting that entrance and exit counselling have no
effect on loan defaults.
Human Resources & Skills Development Canada. Evaluation of the Canada

Student Loans Program. October 1997. Available at: http://www11.hrdc-
drhc.gc.ca/pls/edd/CSL_brf.shtml
The summary of key findings refers to evidence suggesting that the CSLP assists
students to complete their studies successfully, by limiting the amount of time
they must devote to work while at school. The conclusions section indicates that
borrowers from colleges, especially from private colleges, are more likely to
default than university students. Evidence is also referred to that indicates
student loan default rates are significantly higher for borrowers of some financial
institutions than for others. In the full text of the report, Section 6.1 Designation of
Educational lnstitutions, reference is made to default rates having limited utility in
the designation process, with the nature and quality of education, as evaluated
by the provinces, the best foundation for designating post-secondary institutions
for Canada Student Loan purposes. It is pointed out that, in addition to using
default rates to de-designate schools, the US government implemented a
number of reforms over the past decade to address high default rates: (a)
stronger oversight of at-risk schools; (b) an improved process for granting
eligibility and certification of schools and programs; c) a requirement for financial
counselling to student borrowers when they first take out loans, and when they
leave school; (d) borrower loan deferments were simplified; (e) more repayment
options were added; and (f) stiffer penalties were imposed on defaulters (e.g.
income tax refunds applied to loan defaults and garnishing of defaulter wages. A
discussion of default reasons suggests that individuals default for individual
reasons, with the possibility that institutional rates may be high because
borrowers from the institution share common characteristics, not as a result of
the nature of their training.
Kapsalis, Constantine. Factors Affecting the Repayment of Student Loans.

Statistics Canada/Human Resources and Social Development Canada.
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March 2006. Available at http://www.statcan.ca/english/research/81-595-
MIE/81-595-MIE2006039.pdf
Analyzes the experience of approximately 128,000 students who consolidated

their Canada Student Loans in the 1994/95 loan year, from that date to nine
years after consolidation September 2003. Key variables reviewed included: the
total amount of the loan at consolidation (indebtedness); the current status of the
loan and the annual income of the borrower. Current loan status was categorized
as one of: paid in full, in repayment or defaulted (i.e. in arrears for three months
or longer). Found that 39% of borrowers had repaid their loans in full, 30% were
still making payments and 31% were in default. 90% of those who defaulted
(28% of the borrowers) did so within three years of consolidation, suggesting that
repayment problems tend to occur soon after consolidation. The report examined
the relationship among default, debt size and income in the three years following
consolidation. Conclusions included: (a) debt size is a factor only for very large
student debt (the situation of 2% of borrowers, who had debt over $20,000 and
higher default rates than other borrowers); (b) the ability of students to repay their
loans depends primarily on their income after graduation, rather than the debt
they accumulated; (c) income after graduation, as well as the probability of loan
repayment, is strongly related to the type of education (type of degree, field of
study and type of institution). Also comments that other key determinants of
borrowers’ ability to pay include employment opportunities for new labour market
entrants and general income trends. Data tables indicate that the average default
rate within the first three years after consolidation for students from universities
(graduate programs) was 12%, universities (undergraduate programs) 20%,
colleges 30% and private institutions 43%. Data is also given that appears to
indicate field of study wasn’t a significant factor in default rates for college and
private institution students, but did appear to be a factor for university
undergraduate students. For example, average default rates for Arts students
was 28%, while those for professional program students (Medicine/Dentistry,
Health Sciences and Law) were in the range of 5% to 8%.
Leborys, Ben & Walsh, Mark. Default Aversion: Managing the Risk of
Default. Presented at the National Association of Student Financial Aid
Administrators Conference, Minneapolis. July 2004. Available at
http://www.ifap.ed.gov/presentatioins/04NASFAADefaultAversion.html
Describes ‘risk management’ as the continuous management of reducing

exposure to loss from non-performing loans, through the life of the loan. Points
out that the US government has $319 billion in outstanding loans, with
approximately 9% of the total outstanding principal balance is in default. Defines
Cohort Default Rate (CDR) as the percentage of borrowers entering repayment
on loans in a fiscal year and subsequently defaulting (or meeting other
conditions) in that same fiscal year or the next fiscal year. Refers to the
Department of Education’s Sample Default Management Plan issued June 2001.
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Proposes schools form a Default Prevention Team. Outlines four aspects of
borrower contact for schools: (a) communicate while student in school; (b)
pursue those who leave without notice; (c) communicate during their grace
period (letting student keep their e-mail for two years); (d) identify and contact
delinquent borrowers. Includes a section describing the process and advantages
of schools providing Late Stage Delinquency Assistance and suggests a possible
Early Stage Delinquency Prevention approach for schools that includes timely
reporting of student separations, outreach to dropouts and counselling potential
dropouts earlier in the process.
Lein, L. , Richards, R. & Webster, J. Student Loan Defaulters Compared

with Repayers: A Texas Case Study. NASFAA Journal of Student Financial
Aid, Vol. 23 (1). Spring 1993. pp. 29 - 40.
Studying small samples of state technical institute students, as well as students

from a number of proprietary schools, found that default is positively associated
with lack of awareness of deferment provisions. Sources of information about
loans were shown to influence the likelihood of default. The researchers
concluded that the effects of loan counselling were both large and beneficial.
Lochner, Lance & Monge-Marango, Alexander. Education and Default

Incentives with Government Student Loan Programs. Preliminary paper.
December 2003.
A preliminary report on research analyzing default patterns of 2,796

undergraduate borrowers who graduated from college 1992-93 and didn’t go on
to graduate school, with data from the Baccalaureate and Beyond Surveys. It
was found that default rates for men and women are nearly identical, while rates
increase with amount of educational debt. Default behavior varies across
undergraduate majors, but those differences disappear when controlling for debt
and earnings. Surprising, it was found that the relationship between SAT/ACT
test scores and default was U-shaped, with default rates highest for the most
able (quartile 4), with the rate for the least able (quartile 1) being quite close.
Students in the middle 3rd quartile had the lowest default rate.
Lombardi, Anthony & Marsh, Adele. Meteor and Mapping Your Future:
Informing Students and Default Aversion Assistance. Presented at the US
Department of Education Electronic Access Conference, Orlando. 2004.
Available at: http://www.ifap.ed.gov/presentations/04EACSession28.html
The section on Mapping Your Future describes the website, the topics it covers
for students (Planning a career, selecting a school, and paying for school) and its
intended audiences. It also outlines those parts of the website that assist with
default prevention, including the Online Student Loan Counselling (OSLC),
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Financial Fitness Tools (10 Steps) and four Calculators - Repayment,
Consolidation, Budgeting and Debt/Salary Wizard.
McMillion, Robin. Student Loan Default Literature Review. Texas

Guaranteed Student Loan Corporation. December 2004. Available at:
www.tgslc.org/pdf/default_lit_review.pdf
A very comprehensive review of literature that describes research into factors

which may play a role in government student loan defaults. It includes material
on (a) college success variables (graduation, GPA, continuous enrolment,
number of hours failed); (b) college experience variables (college major,
attendance factors, class level, student employment; exit counselling); (c) post-
college variables (unemployment, income, personal & family, loan repayment
factors, knowledge of repayment obligation, repayment after default); (d)
background characteristics of borrowers (gender, age, ethnicity, family
background and income, academic preparedness, borrower attitude); (e) debt
(level of indebtedness, perception of debt); (f) school-type variables; (g) loan
servicing factors; and (h) default definition and trends. The author concludes that,
whereas much of the early research on student default looked at the association
between borrower or institutional characteristics and default behavior, the
general finding of most researchers today is that success in post-secondary
education plays a larger role in predicting who will default than does either the
borrower’s background or the type of institution they attend. He suggests that, all
else being equal, students who are successful in their studies tend to have lower
default rates that those who aren’t. He sees this as hopeful, given his conclusion
that loan repayment seems to hinge on factors that are at least to some extent
under the control of the borrower and/or the school.
Monteverde, Kirk. Managing Student Loan Default Risk: Evidence from a

Privately Guaranteed Portfolio. Research in Higher Education, Vol. 41. No.
3. 2000. pp 331 - 352.
Begins with a comprehensive review of previous research on loan defaults,

indicating that there appears to be general consensus among investigators that
the determinants of student loan default are primarily borrower-based rather than
linked to the borrowers’ school of attendance. The current study looked at 60,000
students who had loans under a privately guaranteed Law Access Loan program
that provides funds to law school students at American Bar Association-
accredited schools. Concludes that loan repayment is basically a matter of the
borrower’s ability and willingness to repay. An individual’s credit bureau score
was found to be an effective predictor of the probability of default. While the
study identified a statistically significant association of school of attendance with
graduates’ default risk, it is suggested that the statistical school effect may be a
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result of graduates’ ability to repay their loans, based on a school’s location, its
reputation and the labour market in the region.
Mortimer, John (Personal correspondence) Senior Policy Advisor, Student

Support Branch, Ontario Ministry of Training. Colleges and Universities.
2006.
Researched an extensive body of literature and conduced studies on government

student loan default using data on repayable debt, student loan post-study
income and other administrative data. Concluded that, overwhelmingly, research
indicates that student success in the labour market (sufficient income and
employment) is the primary determinant of government loan default. Also found
that the significance of post-study income can be moderated if borrowers revise
the term of their loan or participate in the Interest Relief program during periods
of unemployment or low income. In the context of an individual institution,
determined that graduates will typically have more success in the labour market
and higher repayment rates than non-graduates. Warned that this does not
mean, however, that repayment rates of graduates will necessarily be high. For
example, the overall graduation rate for private career colleges may in some
case be higher than graduation rates for public institutions, yet default rates for
students from private career colleges can be higher than graduation rates for
students from public career colleges.
Outcomes Working Group. Short Stay Summary Report. Spring 2003.

Available at:
http://outcomes.bcstats.gov.bc.ca/Publications/collegereports/Short_Stay.
pdf
The 2003 BC College and Institute Short Stay Pilot Survey collected data on the
outcomes of former students who left public colleges, university colleges, and
institutes after completing a relatively small number of courses-between 9 and 23
credits. The survey collected data on these former students' overall satisfaction
with their institution, objectives for enrolling, reasons for leaving, employment
outcomes, and further studies. Six BC institutions participated in the survey :the
University College of the Cariboo , Okanagan University College, Douglas
College, the BC Institute of Technology; Selkirk College and North Island
College. Respondents rated a number of possible reasons for leaving, with the
top three factors being (a) they had completed all the credits needed or intended;
(b) they changed their mind about their program or job goals; and (c) they
transferred or qualified for admissions elsewhere. When asked for their main
reason for leaving, the 23 % of short stay students said they left early because
they had completed their program, or completed courses they wanted or needed,
in many cases, to transfer to another program or institution. 16% said they left for
employment and 11 % said their main reason for leaving had to do with finances
and affordability. Of the leavers, 27% dropped or withdrew from one course and
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18 %, dropped or withdrew from two or more. 18% of the early leavers indicated
they had failed two or more courses. 46% of the early leaves took some further
studies.
Pierson, John, Schmidt, Connie & LeBorys, Ben. Reducing Delinquency

and Default. Presented at the US Department of Education Federal Student
Assistance Electronic Access Conference, Orlando. November 2004.
Available at: http://www.ifap.ed.gov/presentations/04EACSession08.html
The first section “How Schools Can Help” is an early version of the presentation
made by Craig Rorie and John Pierson at the NASFAA 2005 Conference. [See
above listing.] The second section “The Guaranty Agency Perspective” by
Connie Schmidt outlines how GA’s work in cooperation with schools to reduce
default through four strategies of education, communication, retention and
restoration. The ‘education’ component helps students manage their money and
control debt, using web and electronic default prevention information and sources
such as “Mapping Your Future”, and “Meteor”. The ‘communication’ component
refers to keeping in touch with students and counselling. Retention is a school-
based component described as including the identification of high-risk
populations, monitoring Satisfactory Academic Progress (SAP), counselliing
potential ‘early leavers’ and providing additional instructional support. The last
component “restoration” refers to getting defaulted borrowers back on track
through initiatives such as the Default Rescue Program. The third section “Why is
LSDA Working?” by Ben LeBorys outlines the advantages of schools providing
Late Stage Delinquency Assistance to their former students. Reference is made
to the LSDA User’s Guide and the new Department of Education’s LSDA Report
which provides a school with contact information on Direct Loan borrowers from
their institution that are between 241 and 260 days delinquent on their loan
payments. LSDA Tips for Success are included and statistics on LSDA rescued
borrowers for fourteen schools using it, ranging from 25% to 70%.
Podgursky, Michael, Ehlert, Mark & Others. Student Loan Defaults and
Enrolment Persistence. NASFAA Journal of Student Financial Aid, Vol. 32,
No. 3. 2002. pp. 27 to 42.
This describes a model of student loan defaults using a panel data file, which
was created by merging student loan administrative data, higher education
enrolment and performance data, as well as ACT test data for a large group of
first-time, full-time degree program students entering Missouri two-year and four-
year public post-secondary institutions. Borrowers were followed from 1992 to
1999 to determine who defaulted on their loans. While a number of factors were
identified as relating to defaults, the variable with the largest effect on the
likelihood of default was continuous enrolment. It was concluded that students
who are continuously enrolled or who completed their program are far less likely
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to default than students who drop out during the same period. The potential use
of the model is suggested for targeting default prevention resources at students
at risk of default.
Rodgers, Dan. Defaults by Degree. Presented at the NASSGAP/NCHELP

Financial Aid Research Network Conference. San Francisco, June 2004.
Outlined a joint study by the Colorado Student Loan Program and the Colorado
Commission on Higher Education. Borrowers who withdrew were found to be
almost eight times more likely to default than graduates. Those who dropped
out, re-enrolled and then dropped out again had lower default rates than students
who withdrew and didn’t return. Students who transfer schools and then graduate
had a very low risk of withdrawal. Differences in default rates were identified by
major, with the lowest default rates for the sciences and the highest rates for
vocational training. Concluded that it was most effective to target default aversion
efforts on students who withdraw
Rorie, Craig & Pierson, John. Reducing Delinquency and Default: How
Schools Can Help. Presented at the National Association of Student
Financial Aid Administrators Conference, New York. July 2005. Available at
http://www.ifap.ed.gov/presentations/05NASFAADefaultPrevention.html
Describes school-based strategies to reduce default rates, including the

establishment of a Default Prevention Team composed of a senior school official,
representatives from all relevant offices and a student representative. Indicates
strategies should be targeted at those who are most likely to default: (a) students
who fail to complete their program or leave early; and (b) students who fail to
respond to repayment counselling by lenders, guaranty agencies or direct loan
servicers. Advises F. Aid office staff to work with faculty, administrators and
student success specialists to support students to complete their programs. In
the case of early leavers, stresses the importance of being able to contact
dropouts immediately. Suggest that students who don’t respond to lender, GA or
DL Servicer loan counselling will more likely respond to financial aid offices
following Late Stage Delinquency Assistance strategies. Includes tips to be used
by financial aid administrators providing LSDA.
Ryan, L. D. California State University Loan Defaulters’ Characteristics.

NASFAA Journal of Student Financial Aid, Vol. 23 (2), Summer 1993. pp. 29
- 42.
Found that loan repayment is positively associated with borrowers’

understanding of loan obligations and knowing their rights and responsibilities
under the loan terms.
88
Seidman, Alan. A Retention Formula for Student Success. and College
Student Retention: A Primer. Center for the Study of College Student
Retention. 2004. Slide shows available at: http://www.cscsr.org
Proposes a retention formula for student success in college:

Retention = early identification + (early + intensive + continuous) intervention.
Stresses the importance of involvement of faculty and the campus community in
a college’s retention efforts, and suggests establishment of a campus Retention
Committee. Discusses three models related to student retention: Tinto’s concepts
of separation, transition and integration; Astin’s student involvement theory, and
Witt’s person-environment fit theory. Outlines details of early identification
approaches, both prior to and after enrolment and describes approaches to the
intensive and continuous intervention parts of the retention formula.
Seifert, Charles & Worden, Lorenz. Two Studies Assessing the

Effectiveness of Early Intervention on the Default Behavior of Student Loan
Borrowers. NASFAA Journal of Student Financial Aid, Vol. 34, No. 3. 2004.
Available at:
http://www.nasfaa.org/Annualpubs/Journal/Vol34N3/Seifert.PDF
Short-term and longitudinal studies were carried out to evaluate the effectiveness
of an early intervention program implemented by the Advocate Unit of the New
York Higher Education Services Corporation. The unit received lists of recently
withdrawn borrowers and had staff contact each borrower with information on
available repayment options and make referrals to external support organizations
if appropriate (e.g. Department of Labour for job enhancement strategies or not-
for-profit credit and debt counselling agencies for debt management and
budgeting assistance.) Results for the short-term, two-year study provided strong
evidence that an early intervention program can positively impact the default
behavior of student borrowers. The longitudinal study supported this conclusion,
although the positive effects had diminished somewhat over time.
Strauss, Linda & Volkwein, J. Fredericks. Predictors of Student

Commitment at Two-Year and Four-Year Institutions. Presented at the
Annual Meeting of the Association for the Study of Higher Education,
Richmond, VA. November 2001.
The predictors of institutional commitment were studied for over 8,000 students
at 128 two-year and 23 four-year public institutions. An underlying principle of the
study, identified in earlier research, was that institutional commitment is a
precursor or predictor of student persistence behavior. It was found that the most
important student variables influencing such commitment were academic growth
and development, financial attitudes and being in receipt of financial aid, with the
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pre-college characteristics of age, ethnicity and marital status also being
significant predictors of commitment.
US Department of Education, Federal Student Aid. Ensuring Student Loan

Repayment: A National Handbook of Best Practices. 2001. Available at
http://ifap.ed.gov//eannouncements/0118nhbook1web.pdf
Based on the US Department of Education’s first Student Loan Repayment

Symposium held in October 2000, the handbook summarizes trends in student
loan defaults and describes best practices throughout the life of student loans:
(a) before a student enrolls in college; (b) between enrolment and repayment;
and (c) at the repayment stage. The sections on best practices during the in-
school and payment periods include not only the descriptions of specific
practices in current use, but gives a contact person for follow-up purposes. The
last chapter summarizes proposals made by symposium participants for
improving the student loan programs, including (a) providing flexible government
due diligence requirements to allow a new emphasis on ‘profiling’ or ‘targeting’ to
focus on borrowers most likely to default; (b) establishing incentives to
encourage all partners in the loan process (schools, guaranty agencies,
students) to maximize repayment. For schools, incentives could include
regulatory relief for high-performing schools, public recognition of successful
programs, sharing in the savings realized through reduced defaults with partners,
and paying an administrative allowance to schools based on their loan volume so
they can enhance service during the in-school and repayment periods. Examples
of incentives for students include rewarding students who start payments early,
either while they are in school or during the grace period, and providing tax
incentives for employers so they can offer a pretax payment as a fringe benefit.
Includes an annotated bibliography.
US Department of Education. 2005/2006 FSA Handbook. Available at:

http://www.ifap.ed.gov/IFAPWebApp/currentSFAHandbooksYearPag.jsp?p1
=2005-2006&p2=c
The Federal Student Aid Handbook Volume 2 - School Eligibility and Operations,
Chapter 6 (Providing Consumer Information) includes a Loan Counselling section
from page 2-98 to 2-106 that describes the required and suggested elements of
entrance and exit counselling
US Department of Education, Federal Student Aid. Sample Default

Prevention and Management Plan. September 2005. Available at:
http://www.ifap.ed.gov/dpcletters/GEN0514.html
90
This is a new version of the Department of Education’s Sample Default
Management Plan initially published in 2001. It provides schools with activities,
techniques, and tools to promote student and school success and reduce federal
student loan defaults. Schools newly participating in Title IV federal student aid
programs, as well as those having undergone a change in ownership, are
required to implement default prevention and management activities. The
activities include (a) Early Stages of Enrolment (entrance counselling; financial
literacy for borrowers; early identification and counselling of students at risk;
default prevention communication campus-wide; and dedicated default
prevention and retention staff; (b) Late Stages of Enrolment (exit counselling;
service to students who withdraw; timely and accurate enrolment reporting; (c)
After Students Leave School (updating National Student Loan Data Service DER
(Date Entered Repayment) report; Early Stage Delinquency Assistance (ESDA);
Late Stage Delinquency Assistance (LSDA); maintaining contact with former
students; reviewing the school data provided on the Loan Record Detail Report
to ensure accuracy of student contact and loan information; analyzing defaulted
loan data to identify defaulter characteristics. Recommendations for enhanced
entrance and exit counselling are given, as well as a comprehensive list of web
resources that describe tools for schools to ensure data accuracy and employ
effective loan counselling and default prevention and management techniques.
Volkwein, J. Fredericks & Others. Characteristics of Student Loan

Defaulters Among Different Racial and Ethnic Groups. Presented at the
Annual Forum of the Association for Institutional Research, Boston. May
1995.
Includes a summary of previous research on the characteristics of defaulters.

The current research analyzed data from the 1987 National Post-Secondary
Student Aid Study, comparing default among Whites, Asians, African Americans,
Hispanics and Native Americans. It concluded that default behavior can be
substantially predicted by the pre-college, college and post-college
characteristics of individual borrowers, rather than the institution attended. It was
found that differences among different racial/ethnic groups are more a matter of
degree than kind, and that three variables, degree completion, marital status and
dependent children are more important in predicting default than race or ethnic
group, grades earned and the choice of major. College GPA was found to be a
strong predictor of default behavior for whites, not minorities. The findings
suggest that schools can best assist their student borrowers by creating an
environment that promotes good academic performance, encourages study in
pure and applied scientific disciplines, and ensures degree completion.
Volkwein, J. Fredericks & Szelest, Bruce. The Relationship of Student Loan

Default to Individual and Campus Characteristics. Presented at the Annual
Forum of the Association for Institutional Research, New Orleans. May
1994.
91
A theoretical framework for this research was developed based on four
perspectives: theories of human capital and public subsidy; borrowers’ ability to
pay, organizational structural/functional approaches; and student-institution fit
models. Data from three national databases were merged for the study: the 1987
National Post-secondary Student Aid Study of federal financial aid recipient; the
Integrated Post-secondary Education Database System of campus
characteristics and the College Board Survey. No support was found for the
hypotheses that institutional characteristics have an impact on student loan
default. Significant influences on default behavior were found to be predictable
from borrower characteristics - one pre-college characteristic (race), two college
measures (major and GPA) and three post-college measures (highest earned
degree, marital status and taxable income). Suggests that government policy and
practices holding institutions accountable for the defaults of their students is
counterproductive and it is unfair to blame institutions that serve risky borrowers
for default behavior that may occur years after students have left the campus.
Volkwein, J. Fredericks & Szelest, Bruce. Individual and Campus

Characteristics Associated with Student Loan Default. Research in Higher
Education, Vol. 36, No. 1. 1995. pp. 41 - 72.
Summarizes the same research outlined in Voklwein & Szelest (1994),

addressing the question of whether student loan repayment and default
behaviors are more highly related to the characteristics of the college attended or
to the characteristics of the individual student aid recipient. Indicate that majoring
in a scientific or technological discipline, earning good grades, persisting to
degree completion, getting and staying married, and not having dependent
children are all actions that significantly increase the likelihood of repayment. In
two populations (all borrowers and those at non-proprietary schools), they found
virtually no evidence of a direct link between default behavior and type of
institution or highest degree offered. On the other hand, they report that more
than half the defaulters are students who attended proprietary schools, pointing
out that proprietary school borrowers appear to be importantly different from
borrowers at accredited degree-granting colleges and universities. They point out
the paradox that the federal government not only allows, but encourages
institutions to give loans to students who are poor credit risks, and then blames
the institution when they default. Indicates that their model demonstrates that
educational institutions, especially propriety schools, serving high-risk student
borrowers and offering them lower levels of training and education can expect to
have relatively high default rates. Concludes that individual borrowers, rather
than institutions, should be held accountable for high default rates, since much
default behavior results from factors that are clearly beyond school control, like
broken marriages, dependent children and future earnings. Warns that
institutions, concerned about high default rates of their students and the impact it
may have on their institutional future due to government policy, may look to
simplistic admissions indicators that may predict and screen out likely loan
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defaulters - with the result that at some accredited two-year and four-year
colleges, educational opportunity for deserving students could be diminished.
Concludes with advice that their model suggests schools can best assist their
student borrowers by creating a climate that promotes good academic
performance, encourages study in both pure and applied scientific disciplines,
and ensures student degree completion.
Volkwein, J. Fredericks & Szelest, Bruce. Factors Associated with Student

Loan Default Among Different Racial and Ethnic Groups. Journal of Higher
Education, Vol. 69, No. 2. March/April 1998. pp. 206 - 237.
This provides an analysis of National Post-secondary Student Aid Study data for
11,000 student borrowers at 1,400 institutions. Borrowers with similar earned
degrees, marital status and number of dependent children showed similar levels
of income and loan default, regardless of the ethnic group. Among the findings -
working while in college appeared to have lowered default by 7 ½% for non-white
borrowers, but didn’t influence black borrowers. It was also found that lacking
knowledge about repayment obligations was not a serious problem, given over
90% of borrowers surveyed understood the loan should be repaid. Less
optimistic was the fact that one in four was confused about the payment process
and three of four were not aware of loan deferment options. The authors
conclude that their overall findings dispute national policy and suggest campuses
assist student borrowers by promoting good academics performance and degree
completion.
Woo, Jennie. Factors Affecting the Probability of Default: Student Loans in

California. NASFAA Journal of Student Financial Aid. Vol. 32, No. 2. 2002.
pp. 5 - 23.
Factors that predict default in the Federal Family Education Loan Program were
examined by linking a database of California student borrowers with background
financial and demographic information and post-college employment data. The
study identified several factors as strong determinants of default (a) student
background demographic and financial characteristics; (b) leaving school without
a degree; (c) having low wages after leaving school; and (d) experiencing
unemployment. Controlling for these socioeconomic variables, an analysis
showed that vocational schools, particularly privates, are more likely to have
students who default on their loans.
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Additional Web-based Default Prevention Resources for
Financial Aid Administrators
Canadian Bankers’ Assocation Your Money Website
Among the resources included in There’s Something About Money website is a

pop quiz on money matters, a budgeting tool, and a ‘Credit 101’ module. The
website serves as a portal to the YourMoney Network which includes links to a
large number of websites relating to money matters for young people and their
parents.
http://www.yourmoney.cba.ca/eng/index.cfm
CanLearn Website
Developed by Human Resources and Skills Development Canada in

collaboration with provincial and territorial governments, the CanLearn website is
a one-stop on-line resource for students and their families to plan, save and pay
for post-secondary education. Among the many components are: a Financial
Knowledge Assessment, a Debt Management Quiz, a Financial Planner including
an Education Cost Calculator and Budget Estimator & Planner, and Loan
Repayment Calculator.
http://www.canlearn.ca
Mapping Your Future Website
Mapping Your Future is a public service website providing career, college,

financial aid and financial literacy information and services. It provides high
school and post-secondary students and parents information about planning a
career, selecting a school, paying for post-secondary education, as well as
preparing for life after college. It includes entrance and exit On-line Student Loan
Counselling (OSLC) for Stafford and Perkins Loans. A special section for
financial aid professionals includes a list of default prevention and debt
management techniques. Sponsored by a group of guaranty agencies
participating in the US Department of Education’s FFELP (Federal Family
Education Loan Program), this award-winning website is found at:
http://www.mapping-your-future.org
NASFAA Financial Aid Night and Counselor’s Materials
The National Association of Student Financial Aid Administrators (NASFAA) has

developed materials for financial aid administrators and high school counsellors
taking part in Financial Aid Nights. The materials include: Guide to Planning and
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Conducting a Financial Aid Night and Financing Education Beyond High School,
a financial aid presentation script and PowerPoint slide show providing the basic
information students and parents need to know when applying for financial aid.
Available at http://www.nasfaa.org/subhomes/financialaidnight/FANight.asp
National Default Prevention Listserve
Hosted by Rutgers University, this is a forum for all those involved in financial aid
to exchange ideas on default prevention issues. Includes regular postings by the
US Department of Education Federal Student Assistance office. To subscribe,
send a message to: LISTSERV@EMAIL.RUTGERS.EDU with this command in
the body: SUBSCRIBE DEFAULT_PREVENTION@EMAIL.RUTGERS.EDU
Your Name (do not put anything in the subject line)
Tools for Schools: Effective Practices Database
The database is a part of the US Department of Education’s Federal Student Aid

Quality Assurance Program and located on the IFAP website (Information for
Financial Aid Professionals Library). While it initially became operational in the
early fall 2005, QAP staff expect the volume of school submissions to increase in
2006. The database is a mechanism for schools to share financial aid
management practices that work well on their campus. Among the school-based
practice categories is ‘Default Management’ The website can be found at
http://www.ifap.ed.gov/IFAPWebApp/qualityassurance/AppendixD.jsp
Tools for Schools: FSA Assessments School Default Management Web

Module
This is one of five modules developed by the US Department of Education’s

Federal Student Aid Quality Assurance Program to support key school
management tasks. Through a series of statements, questions and links to
additional resources, it is designed to assist schools manage their cohort default
rates and to prevent students from defaulting on federal student loans. The
module can be located at:
http://www.ifap.ed.gov/qamodule/DefaultManagement/Default Management.html
USA Funds Best Practices in Debt Management Online Manual
This manual provides suggestions and tools to assist financial aid administrators
with their school’s debt-management and default-prevention efforts. It is
organized into keys for successful debt management and best practices for each
stage of the life of a loan: (1) application and loan origination; (2) in-school
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period; (3) grace period; (4) repayment period. Includes a guide for developing a
default management plan and a sample plan. The manual is located at:
http://www.usafunds.org/financial_aid/debt_management/best_practices/index
USA Funds Education Access Report
This electronic newsletter sponsored by USA Funds, offers financial aid

administrators and lending professionals weekly updates on the latest
education/access and higher education finance issues and trends. A previous
newsletter “Debt Management Perspectives” has been incorporated into the
Education Access Report. This section provides information on programs that
campuses are using to prevent defaults, debt management updates and the
latest news about workshops, consultations and other programs of offered
through USA Funds’ debt management initiative. The website includes the
current issue of EAR, plus an archive of all former issues. The Education Access
Report can be found at: http://www.usafunds.org/news/aboutear/index.htm
USA Funds Debt Management Forum
This forum was established by USA Funds to promote the sharing of best
practices in debt management and education loan default prevention among
financial aid professionals. Campus-based financial aid professionals can post
questions and share challenges, sources and best practices regarding debt
management for students and former students, as well as techniques and
practices that help prevent defaults on federal education loans. Financial aid
administrators wanting to subscribe to the list can do so by sending an e-mail
message to majordomo@lists.usafunds.org with the following text in the body of
the message: subscribe debtmanagement your e-mail address
USA Funds Solving the Retention Puzzle: Best Practices in Student

Retention Online Manual
This manual helps campus administrators solve the student retention puzzle by
offering resources, tools, checklists and case studies in successful retention
practices. The manual is located at
http://www.usafunds.org/financial_aid/debt_management/solving_retention/index
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Appendix B:
Selected ‘Tools’ for Use in Post-secondary Institutions
This section describes specific strategies and tools that can be used by post-
secondary institutions to improve the government student loan repayment of their
students. It includes ideas that emerged from the surveys of student aid
administrators across Canada and the developments in the ten provinces and
territories, as well as approaches and resources found on the many websites in
the US and Canada that are targeted at improving financial literacy in general,
improving the knowledge students and their families have about student aid/loan
opportunities and obligations, and increasing student success in post-secondary
studies.
These ideas are organized into (a) overall default management planning; (b)
before post-secondary; (c) early stages of enrolment; (d) in-school and late
stages of enrolment; and (e) after students leave school. In many cases, either a
website reference is included or an actual document is referred to and attached
at the end of this appendix.
Overall Default Management Planning
There are a number of helpful resources to assist a post-secondary institution

prepare and implement a default management plan
1. USA Funds’ Default Management Plan:

http:///www.usafunds.org/financial_aid/debt management/best practices/keys to
success/develop_plan/sample_plan/index.htm
2. US Department of Education Sample Default Prevention and Management

Plan:
http://ifap.ed.gove/dpcletters/GEN0514.html
3. The Federal/Provincial/Territorial Working Group on Designation’s Default

Prevention Plan outlined in Best Practices Guidelines: “School Tools” for
Improving Repayment Performance. See attached Document #1 (p. 107- 111)
for a copy of this plan.
Before Post-secondary
1. NASFAA Financial Aid Night & Counselor’s Materials, which could be used as
a template for Canadian schools, with expanded reference to the student loan
repayment requirement and the implications for student loan borrowers:
http:///www.nasfaa.org/subhomes/financialaidnight/FANight.asp
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2. Workshops offered to students (and parents) to provide information on
financing education, identifying repayable and non-repayable sources of
assistance, including specific information on student loan obligations and the
consequences of default. See attached Document # 2 (p. 113) for an outline for
a 3-hour workshop. ‘Paying for College and University’.
3. Mapping Your Future’s downloadable PowerPoint presentations about

repayable and non-repayable student aid for use with high school students.
These could be customized for the Canadian context and the specific post-
secondary institution:
http:mapping-your-future.org/mhsc/
4. The award-winning FinAid website’s helpful ‘Student’s Financial Aid Checklist’,

which includes important ‘to do’s’ starting with the junior year of high school. This
could also be adjusted to fit the Canadian context, including reference to
repayable student loans and non-repayable forms of assistance:
www.finaid.com/students/checklist.phtml
5. A Grade 9 to 12 checklist of things students need to do to plan for post-

secondary can be found on the Government of Alberta’s Learning Clicks website:
http://www.alis.gov.ab.ca/LearningClicks/checklist.asp
6. Financial aid and financial planning information distributed to Grade 12

students by college and university high school liaison reps when visiting schools.
7. Student Success courses established by colleges and universities can be

delivered at high schools.
8. High school graduates who have gone on to post-secondary can provide very
useful information to students nearing completing of grade 12 by sharing
information about ‘things they wish they’d known when entering post-secondary’.
An example of this is information developed by a Vancouver-area school. See
attached Document #3 (p. 113).
9. Publications (hard copy or web-based) on costs and financing of post-

secondary can be made available to prospective students. One example is the
University of British Columbia’s ‘Financing Your Education’ module on the
Awards & Financial Aid Office website, which provides a comprehensive look at
planning starting with ‘goals and values’, an interactive costs and resources
worksheet, and key information on options to investigate when the student
discovers a budget shortfall. See http://students.ubc.ca/welcome/finance.cfm
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10. Referring students to web resources such as:
Comprehensive Financial Planning Workbook, created by the University College

of the Fraser Valley, in co-operation with the Province of British Columbia:
http://www.ucfv.ca/fineaid/cfpe.htm (http://www.ucfv.bc.ca/future/cfpe/CFPE.htm)
The Canadian Bankers’ Association YourMoney website which has a section

There’s Something About Money incorporating a pop quiz on money matters, a
budgeting tool, and a ‘Credit 101’ module, a well as a portal to the YourMoney
Network which includes links to a large number of websites relating to money
matters for young people and their parents.
http://www.yourmoney.cba.ca/eng/index.cfm
CanLearn, which includes a number of tools for students and parents, including a
financial planner, an Education Cost Calculator, an on-line budget planner, and
several quizzes (ones dealing with Financial Knowledge Assessment, Financial
Fitness and Debt Management):
Early Stages of Enrolment
1. Admissions policies ensuring only qualified students are admitted to the

institution, sufficiently prepared to have a good chance of success.
2. Effective pre-entry programs offered to bring students’ knowledge and skills to

the level required for success before entry to post-secondary level programs. An
example is the Laurentian ‘Introduction to University Program’ offered to students
who don’t quite meet entrance requirements, which allows students to register in
60% of a full course load (to meet government student assistance requirements)
and supplement their post-secondary courses with non-credit courses in areas
such as study skills.
3. The Financial Aid office could present special targeted information sessions on
student assistance to students nearing completion of pre-entry programs.
4. Ensuring the institution’s Financial Aid Office is pointed out or a stop on any
student tours of the campus.
5. Financial Aid information can be sent to all students with their offer of
admission.
6. In order to establish a relationship with the Financial Aid office prior to

admission, applicants can be e-mailed the name and address of ‘their financial
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aid officer’, with instructions on how to apply for government student loans and
other student assistance.
7. Setting up a Financial Aid office table/kiosk at campus fairs, on orientation and

student services days, and at Open Houses to provide information to new and
prospective students on financial assistance.
8. Orientation sessions, including key information on student aid and financial

planning/budgeting, can be offered during the summer months. An example is
Canadore College’s “Beat the Rush’ program.
9. For students who are not able to attend Orientation sessions in-person, a web-
based version can be established. Douglas College’s on-line orientation, which
includes information on the Financial Aid office, can be found at:
http://www.douglas.bc.ca/new-students/student-orientation/index.html .
10. The Financial Aid office can sponsor ‘financial aid awareness weeks or days’
to focus students’ attention on important information on student aid and financial
literacy issues. This can be done in co-operation with the campus student
association/government.
11. Financial Aid office staff members can visit classes at program starts, to
introduce their role and provide general information about student assistance.
This can be particularly useful for programs that commence at non-standard
times of the year and those that have been identified as having students with
high default rates.
12. Offering ‘student success’ or ‘first year experience’ programs that include
components such as study skills, time management, writing college/university-
level research papers, library research, critical thinking, personal and career
planning and transferring to other institutions.
Including a module in ‘student success’ or ‘first year experience’ programs built

around one of the financial literacy programs such as:
Mapping Your Future’s Financial Fitness Tools, particularly the Ten Steps to
Financial Fitness:
http://mapping-your-future.org/features/dmtensteps.htm
AES’ Common Cents Tour:

CanLearn’s Financial Knowledge Assessment, Financial Fitness and Debt

Management components:
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13. Hiring students as Peer Counsellors to assist with financial literacy programs
on topics such as budgeting, money management and credit, which can be
offered to the general student population or targeted to specific areas such as
residence students.
14. Establishing a student-staffed ‘Student Mentoring Centre’, and encouraging

the centre to refer clients to the Financial Aid office for information on student
assistance.
15. Entrance Counselling when students obtain their first government student
loans, either through group sessions, individual in-person interviews, or via on-
line versions. The counselling could include:
• a review of the terms and conditions of the loans;

• a review of borrowers’ rights and responsibilities;
• a review of policies relating to withdrawals and failures;
• notification that there are various repayment options, including some for
students running into problems when they are repaying their loans;
• a review of the consequences of default;
• a reinforcement of the importance of keeping comprehensive loan records;
• a reminder of the importance of communicating change of status and
contact information to the institutional financial aid office and the student’s
loan service provider(s);
• a referral to a student loan budgeting/financial planning website such as
CanLearn;
• a suggestion for students to review Canada Revenue Agency’s student-
related income tax policies, specifically student deductions and credits via:
http://www.cra-arc.gc.ca/tax/individuals/segments/students/menu-e.html
An on-line version of entrance counselling for Alberta students is available on the

Edulinx website at: https://www.edulinx.ca/ABDLWeb/en/entrance_intro.html
16. In cases where students pick up their government student loan documents
from the institutional Financial Aid office, an information sheet can be included
with the documents that outlines key points about the student’s responsibilities,
particularly the importance of updating the Financial Aid office if there is any
significant change in their personal circumstances (e.g. program change,
dropping courses or withdrawing, change to marital status or substantial change
to their financial situation.) Students can be reminded of the importance of
ensuring the Financial Aid office is notified of any address or contact information
changes.
17. Providing students with Murray Baker’s The Debt-Free Graduate, which can
be ordered through: http://www.debtfreegrad.com/pages/debtfree_cnd.html
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18. Using various incentives to encourage students to attend financial literacy or
student loan counselling sessions, including:
• making sessions mandatory, prior to issuing loan documents

• prize draws (eg. copies of the Debt Free Graduate, gift certificates to the
campus bookstore or food services)
• serve food, snacks etc.
• issue some form of limited passes to special access to financial aid office
services
• use of comedy skits, including interactive ones, presented by senior students.
19. Issuing student loan borrowers a folder, initially filled with important financial
aid and student loan information, but mainly focussed on encouraging student to
use it keep all copies of correspondence and documentation about their loans.
See sample of the folder used by Durham College and the summary page used
by their students to list their student loans as they receive them - attached
Documents # 4 and # 5 (p. 114 and 115).
20. Use of institutional financial aid websites, to provide important information

about all types of repayable and non-repayable assistance, plus give reminders
about key dates relating to students’ government loans. Such sites can
incorporate interactive exercises such as McMaster University’s ‘Budgeting
Bonaza Game’ found at: http://sfas.mcmaster.ca/budgeting/budgetbonanza.htm
In-school and Late Stages of Enrolment
1. Post-secondary institutions could have their Institutional Research

departments do research to develop a ‘profile’ of defaulters in their schools, when
student-based default data is available at their institution. The results could be
used to target specific strategies to this at-risk group.
2. Institutions can establish a Student Retention or Student Success Committee

with representatives from key areas of the campus, including the Financial Aid
Office, to develop strategies specifically targeted at retaining students in general
and at-risk students specifically, and to evaluate their implementation.
3. Encouraging the development of a co-operative ‘student services referral

network’ on campus, such that front-line and professional staff from various
services across campus meet at least once a year to share key information about
their services and how to refer students to access them. Invitations to participate
in such a referral network should be broadly-based whenever possible,
incorporating people and departments that might not necessarily be defined as a
‘student service’. These could include the broader student support community
such as Registrar’s Office staff, academic advisors in faculties/schools and
chaplins.
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4. Training students, including those on Work Study programs, to act a peer
helpers or tutors to assist students having academic difficulties.
5. Workshops can be offered several times each term on topics such as

budgeting, reducing living expenses, and searching for outside scholarships.
6. Articles can be included in the campus student newspaper on topics as

outlined in item 3.
7. Establishing an automated ‘degree audit program’ to allow students to track

their education plan, monitor their own progress and to allow for intervention by
student services if they stray from their education plan.
8. Developing an information sheet outlining the requirement for students to

maintain a sufficient course load (usually 60%) for government loan eligibility.
See attached Document # 6 (p. 116) used by the University College of the Fraser
Valley.
9. Rapid follow-up on students dropping courses or withdrawing:

• course add/drop form advises student loan borrowers to contact the
Financial Aid office;
• for those institutions with on-line course withdrawals, a ‘pop-up’ box
appearing when students attempt to withdraw on line, advising them to
contact Financial Aid;
• academic advisors remind students dropping courses to see the Financial
Aid office if they are government loan/grant recipients;
• institutional student data systems set up to provide automated
reports/notifications to the Financial Aid office when students withdraw
from courses or their program;
• staff in the Financial Aid office make telephone contact with students who
are withdrawing from courses or programs;
• an information sheet (or e-mail) is sent to all student borrowers who are
withdrawing, with information relevant to their student loans. See attached
Document #7 (p. 117) which is the notice sent out by the University of
Toronto;
10. E-mail reminders can be targeted to students who have previous student
loans but are not continuing to borrow, alerting them to the need to keep their
previous loans in interest-free status.
11. In the case of colleges and institutes with vocational job training programs,
the Financial Aid office could establish agreements with some of these programs
to be able to refer high-need students for services (e.g. to Auto Service
departments for emergency car repairs with no labour charges, for students
commuting long distances).
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12. Students identified by faculty for non-attendance or potential failing grades
are contacted by the financial aid office to discuss implications for their student
aid.
13. Exit counselling when students are nearing graduation from their program or
when they drop below the course load required to retain government student loan
eligibility. Provided through one-on-one in-person interviews or on the phone, in
group sessions or via on-line versions, this counselling could include:
• a review of information given in entrance counselling, including repayment

obligations and the consequences of default;
• a review of repayment options, including programs for students having
difficulties repaying;
• emphasizing the importance of ensuring the government loan service
centres(s) they are dealing with have their current contact information;
• a reminder to continue maintaining a comprehensive record of all
correspondence and documents about their student loan(s).
14. A success program could be established for students who have been placed
on academic probation, whereby they are allowed to return to studies but are
required to meet with a counsellor to identify a plan for success, signed by both
parties. This plan would establish the responsibilities of the institution to provide
remedial assistance and the responsibilities of the student to meet specified
requirements that will support their success.
15. Student Loan Repayment presentations or ‘Exit Workshops’ are given to

graduating students, in conjunction with the federal government’s National
Student Loan Centre. These can include information on how to handle student
loans after graduation and options if the student is not able to repay. Students
who don’t attend these presentations can be sent a ‘sorry you couldn’t make it’
letter, together with an information sheet covering loan repayment information.
16. A kiosk can be set up in a high visibility area on campus towards the end of
the academic year, staffed by Financial Aid office representatives and/or the
National Student Loan Centre.
17. A series of posters put on campus bulletin boards, or other creative locations
such as the back of washroom doors, similar to the AES series of entertaining
posters including “Default on Your Student Loan and Watch Good Credit Go
Bad”. See http://www.fp.ed.gov/fp/attachments/activities_whatsnew/DA1202.ppt
18. A letter or e-mail sent to graduating students with government loans,

providing information on government loan repayment and programs for students
having difficulty repaying, plus contact numbers for student loan service centres.
An invitation can be included to contact the Financial Aid office.
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19. An information sheet on student loan repayment could be included with
graduation diplomas/credentials.
20. Use of the college/university’s intranet and student e-mail for targeted, timed
messages re important student loan information such as reminders re
maintaining interest-free status and loan repayment obligations and options, plus
advertising for loan repayment presentations or exit workshops.
21. Information about government student loan consolidation, repayment

processes and repayment assistance can be included in student newspapers
towards the end of the academic year.
22. Encouraging the use of the CanLearn website to assist students with financial
planning and calculation of loan repayment scenarios. The Loan Repayment
Calculator can be found at:
http://srv650.hrdc-drhc.gc.ca/cslp-pcpe/cl/30/lrc-
crp/nlindex.jsp?langnslsc=en&bundle=stu
23. Assisting students to reinstate previously defaulted loans to put them back in
good standing so they will be able to access debt management tools and
additional funding in order to complete their studies.
24. The Financial Aid office visits loan-eligible programs that are nearing
completion, to inform students about the loan repayment process and the
importance of keeping loans in good standing, to provide handouts giving contact
information for student loan service centres and to give instructions to students
on how to update their address with the loan service centres. This can be
particularly helpful for programs that graduate students at non-standard times of
the year or for those programs that have been identified as having high default
rates.
25. The Director/Manager of Financial Aid could meet with the chairpersons of
programs whose students have high default rates to discuss strategies for
informing students about their student loan responsibilities.
26. Presentations can be given by the Financial Aid office to faculty and staff,
providing information on the services offered to students and explaining how to
refer students for help.
After Students Leave School
1. Students leaving the college/university can be asked to complete a ‘exit

survey’, asking about their reasons for leaving and the extent to which financial
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issues drove their decision to leave. This type of survey can be expanded to be
used for students who are expected to return to school in the fall, but don’t.
2. Letting students maintain their college or university e-mail account for at least
six months after they leave school so that e-mails can be sent through the
campus intranet to students who are graduating.
3. Effective student employment and placement programs, offering assistance

finding career employment, writing resumes, handling job interviews, could be
offered to alumni as well as students still in school.
4. Encouraging students to return to speak with Financial Aid office staff when
they receive their notice of student consolidation, particularly if they don’t
understand what it means or can’t start paying. Students can be helped to
navigate repayment processes and debt management tools.
5. Considering involvement in a Late Stage Delinquency Assistance Program,

whereby post-secondary Financial Aid offices contact students who are about to
default. Approaches to LSDA recommended by the U.S. Department of
Education include:
• a ‘soft touch’ focusing on assisting the student, not collecting the loan
• calling at different times of the day
• mailing hand-written notes
• using contact information from several sources
• sending out information on repayment options and programs for students
having difficulty repaying
• connecting the student with the loan service centre in a three-way call
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The following Default Prevention Plan (pages 107 - 111) is an excerpt from the
document Best Practices Guidelines: “School Tools” for Improving Repayment
Performance prepared by the Federal/Provincial/Territorial Working Group on
Designation, 2005.
Introduction
In the Designation Policy Framework, it is acknowledged that post-secondary

educational institutions play a key role in managing the financial risk to student
loan portfolios via their role in providing a quality education to the borrower and
preparing them for their chosen career.
From the time that students start their studies to the time they graduate, post-
secondary educational institutions are a critical point of contact and support for
the students. During a program of studies, post-secondary educational
institutions have multiple opportunities to interact with students and ensure that
they understand all their academic and financial obligations with respect to their
education. It is in this role that the Federal and provincial governments feel that
post-secondary educational institutions can play a greater and increasingly
positive role in students’ academic lives and obligations (including student loans).
Improving Repayment Performance –A Default Prevention Plan
The purpose of student loan financing is to produce a product: a student

borrower who will be a payer, a success personally, financially, and socially. To
do so requires efforts at every stage of the student’s school and employment
experience and prevention is crucial in avoiding default. In turn, default
avoidance carries a positive lifelong impact on the personal life of each student—
and on society in general.
Default prevention can be seen from two perspectives:

1. mitigating factors that cause default and
2. supporting factors that promote good repayment behaviour.
Factors causing default include:

• Poorly informed of financial aid information
• Poor understanding of loan obligation and terms
• Withdrawal from school
• Unmanageable non-education debt
• Family status
• Personal and financial management.
• Unemployment/Low income relative to debt obligations
Factors supporting repayment include:

• Good understanding of loan obligations and terms
107
• Clear admission criteria
• Completion of program
• Employment/adequate income to meet debt obligations
• Well prepared for personal and financial management
From these two sets of factors, key areas can be targeted when developing a
default prevention plan:
• Borrower Education
• Alliance Building
• Leveraging Technology
• Personal and financial management
• Loan obligation enforcement
• Student Retention
• Employment Initiatives/Services
A default prevention plan based on some or all of these factors will help improve
student success, increase repayment rates, and make the student’s experience a
more positive one.
Key Components of a Default Prevention Plan

Borrower Education
Starting with clear admission criteria, the post-secondary educational institution

can ensure that a “good fit” is established between a prospectus student and a
program of study. Once a student has been admitted to a program, providing
comprehensive entrance and exit counselling sessions is an excellent way to
educate students on the rights and responsibilities of borrowing a student loan.
This type of interactive session creates an environment in which the borrower
can ask questions and voice concerns. A requirement for students to attend
yearly review sessions can reinforce the information covered during the entrance
counselling session.
1. Enhanced Entrance Counselling
• Invite loan specialists and lenders to present at the sessions.

• Distribute materials containing loan information to the borrowers for future
reference.
• Provide counselling on:
¾ Responsible borrowing
¾ Budgeting,
¾ Debt management plans,
¾ Repayment options,
¾ Salary expectations.
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• Provide access to information, where available, on graduation rates, graduate
employment rates and default rates by institution and program
• Delay certification of loan applications until first time borrowers have attended
a session.
• Offer sessions intermittently throughout the semester to promote attendance.
• Offer one-on-one entrance counselling to students who cannot attend group
sessions.
• Meet with borrowers at the end of the semester/program to identify students
who may need additional counselling.
2. Review Sessions
• Discuss with students information about their loans including:

¾ Cumulative amount borrowed,
¾ Estimated interest,
¾ Estimated monthly payment.
• Confirm with students that they have received a recent loan summary.
• Update students on changes in financial aid office procedures.
• Remind students of their rights and responsibilities.
• Gather updated information from students, including:
¾ New addresses and telephone numbers,
¾ Changes in their permanent addresses,
¾ Reference information, and
• Cover the consequences of default and what the borrower can do to avoid it.
• Provide borrowers with online entrance counselling sites where available by
lenders and service providers.
• Direct students to online websites where updates to student information can
be performed.
3. Enhanced Exit Counselling
• Invite lenders and service providers to present at sessions.

• Include and emphasize the correct procedures transfer students should follow
when notifying their lenders that they have transferred and in applying for
interest free status.
• Provide students with the most up to date information on the names and
phone numbers of lenders and service providers.
• Offer one-on-one exit counselling to students who cannot attend group
sessions.
• Let students know they can call the school for assistance, provide them with
the name and phone number of a contact person.
• Verify that all exit interview forms are completed in full.
• Send borrowers a letter or brochure if they were unable to attend an exit
counselling session during their grace period reminding them of their rights
and responsibilities and listing phone numbers to call for assistance.
109
Alliance Building
For an institution to successfully improve its repayment score, it must have the
support of its own campus in addition to lenders and service providers. Forging
alliances facilitates learning and promotes progress.
Work Closely with Other Campus Departments to Promote Positive

Repayment Behaviour
• Stress the importance of default prevention to upper administration and

request their assistance in helping secure resources.
• Make default prevention a priority for the entire financial aid office by
educating front counter staff and advisors on default prevention measures.
• Invite placement office counsellors to present at exit sessions.
Work Closely with Outside Agencies to Promote Default Prevention
• Participate in pilot programs.

• Take advantage of services where offered by lenders and service providers,
such as entrance and exit counselling via the web.
• Invite industry experts to train financial aid office staff on default prevention
methods.
• Contact the provincial loan program and request any tools/information that
may be available to help counsel borrowers.
• Assist with skip tracing activities.
Leveraging Technology
Internet Access
• Create a financial aid web page for students to view and use as a
reference.
• Provide links for students to other financial aid and scholarship sites.
• Provide computers for students to use, either in the lobby of the financial aid
office or in a lab setting, to access financial aid information online.
Email
• Use email to communicate with borrowers and/or parents in the form of

newsletters on a semester basis.
• Ask the school’s administration to allow students to use their school e-mail
addresses for up to two years after leaving school to keep in contact with
borrowers.
• Encourage students to use e-mail as a way to communicate with financial
aid office staff and service providers.
110
Student Retention
Reducing attrition is a key factor in preventing default, as those borrowers who
do not complete their program are more likely to default on their loan. Student
retention should be dealt with systematically throughout the institution rather than
through isolated policies implemented by various departments or sections of an
institution. Some best practices with respect to retention are:
1. Academic Advising
• Academic advisors should strongly encourage their advisees to make efforts

to establish memberships in the social communities of their collegiate
institution.
2. Administrative Policies and Procedures
• Have effective methods for the communication of rules and regulations

important to students.
3. Withdrawal Management Plan
Develop a withdrawal management plan to ensure that those students who do

leave the institution before completing their program are informed of their
responsibilities with respect to their student loans.
• Establish formal withdrawal procedures that require “sign off” by the financial
aid office before a student is allowed to withdraw. This will ensure proper
counselling on loan repayment obligations.
• Offer transfer scholarships or gift aid to provide students with incentives for
re-enrolling.
4. Monitoring of Graduation Rates by Program
Institutions that monitor program graduation rates will be in a better position to

identify, rectify and/or eliminate programs that have low repayment rates
improving overall institutional performance.
Employment Initiatives/Services
• establish/enhance an employment resource centre which includes job

postings, job search websites, resources on resume writing and interview
skills
• Monitor the performance of programs with respect to graduate employment
rates and graduate’s other labour market outcomes (e.g. post study income)
through graduate employment surveys.
• Enhance relationships with employers of former graduates and other potential
employers.
111
Workshop: Paying for College & University
Format: Three-hour presentation
Brief Description: Strategies for identifying and applying for government student assistance
and other financial aid available to college and university students. Covers types of aid, both
repayable and non-repayable, eligibility criteria and tips on how to complete application forms,
Useful for high school students and parents, as well as those planning to attend post-secondary
after a period away from school.
Outline:
1. Introduction
1.1 Objectives of presentation
1.2 Cost of attending post-secondary
1.3 Differences between repayable and non-repayable aid
1.4 Differences between ‘need-based’ and ‘achievement-based’ assistance/wards
2. Student Aid for Full-time Students

(Each described in terms of award amounts, eligibility criteria, how to apply
and where to get more information)
2.1 Government student assistance

• Canada Student Loans, including repayment obligations & repayment options
• Provincial Loans & Grants
2.2 College and University awards
• Entrance & transfer awards
• Bursaries
• Scholarships & other merit-based awards
2.3 Canada Millennium Foundation Excellence Awards
2.4 Awards with special criteria
• Affiliation awards
• Students with disabilities
• Women students
• First Nations students
2.5 High school and community-based awards
2.6 Incentive programs
2.7 Sports awards
2.8 Work Study
2.9 Canada Employment Insurance funding
3. Student Aid for Part-time Students

4. Student Aid for Upgrading Programs
5. Other ways to help pay for college and university
5.1 Registered Educational Savings Plans
5.2 Co-operative Education programs
6. Conclusion
6.1 Student budgeting
6.2 Where to go for more help
• helpful websites
• financial aid offices at colleges and universities
J. Orum 2005
112
113
114
115
116
[University of Toronto Notification sent to all borrowers who have withdrawn]
______________________________________________________________________
Surname Given Name S.I.N.
The Ministry of Training, Colleges and Universities has recalculated your OSAP
entitlement due to a reduction in your course load during the current academic year.
OSAP requires that students maintain a course load of 60% in each semester to
continue to be eligible for assistance (40% course load for students with a permanent
disability). OSAP does not allow course loads to be averaged over two semesters to
equal 60%.
Canada Student/Ontario Student Loans will become repayable

SIX months from ______________________________________.
Your lender(s) will be notified of this change. It is your responsibility to set up a monthly
repayment schedule with your lender(s) and ensure your address is up-to-date.
Unable to Repay Canada/Ontario Student Loans?

If you are unable to repay your student loans due to lack of employment, illness or
disability, you should investigate the Interest-Relief Program. Applications are available
from the National Student Loans Service Centre 1-888-815-4514. Detailed information is
available at http://osap.gov.on.ca and http://canlearn.ca/nslsc/
Return to School and Reinstate to Interest-Free Status

If you return to school in at least 60% of a full-time course load (40% with a permanent
disability) for at least 12 weeks, you can reinstate your interest-free status on
outstanding Canada/Ontario Student Loans. Have your College/Faculty complete a
Continuation of Interest-Free Status (Schedule 2) after classes begin. This form notifies
the National Student Loans Service Centre, your bank and the government of your
registration.
Satisfactory Academic Progress

OSAP recipients must successfully complete 60% of a course load in each semester
(40% for students with a permanent disability). Failure to meet this criterion will lead to
OSAP probation. Subsequent failure in a second period of study will lead to a loss of
OSAP funding for a minimum of 12 months.
OSAP Overpayments Can Affect Future OSAP Funding
More Information: http://osap.gov.on.ca
National Student Loans Service Centre 1-888-815-4514

For OSAP loans borrowed prior to September 2001:
- CIBC National Student Centre 1-800-563-2422
- Royal Bank Student Loan Centre 1-800-363-3822
- Bank of Nova Scotia Student Loan Centre 1-888-284-3044
117

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Institutional Strategies to Improve

Government Student Loan

Part 1: Factors That Play a Role in Government

Part 2: Improving Government Student Loan Repayment

School-based Default Prevention Strategies: US Context 10

Improving Government Loan Repayments: Canadian Context

• British Columbia Post-secondary Institutions 22

Institutional Strategies & Practices for improving Loan Repayment

A. Preventing Government Loan Defaults: Selected References 76

B. Selected ‘Tools’ for Use in Post-secondary

This report endeavours to identify strategies and practices being used in

Two appendices are included: A - Selected References Re: Preventing

Cause & Effect Versus Correlations

Traditional cause and effect research generally involves making a prediction or

Correlation research endeavors to determine how much of a relationship exists

A fuller description of research referred to in this section can be found in

These refer to characteristics students have when they enter post-secondary

1.5 Family Background & Income

1.7 Borrower Attitude

2. Post-secondary Experience Variables

2.1 Institution Variables

Woo’s (1992) research analysis revealed that vocational schools, particularly

Human Resources and Skills Development Canada, in their 1997 evaluation of

2.3 Duration of Attendance Factors

2.4 Student Employment

Volkwein & Szelest (1998), in their analysis of the National Post-secondary

Based on his comprehensive review of default literature, McMillion (2004)

3.2 Grade Point Average

3.3 Continuous Enrolment

4.1 Level of indebtedness

Several studies have identified unemployment as one of the most significant

Several studies have found a strong relationship of post-school income to

4.4 Personal and Family Status

Variables such as being separated, divorced, widowed and having dependent

4.5 Loan Repayment Behavior

4.7 Loan Servicing Factors

Summary of Factors That Play A Role in Government Loan Defaults

A relationship can be found between many factors and student loan

School-based Default Prevention Approaches

In Ensuring Student Loan Repayment: A National Handbook of Best Practices

This chapter categorizes school-based default prevention approaches, practices

Default-Prevention Approaches: Before Post-secondary

The award-winning FinAid website www.finaid.com has sections to help students

The National Association of Student Financial Aid Administrators (NASFAA) has

Mapping Your Future is a national collaborative, public service project of the

Downloadable PowerPoint presentations for both middle and high school

USA Funds introduced Unlock your Future in 2003, an early-awareness program

Default Prevention Approaches: Early Stages of Enrolment

U.S. Federal regulations require that schools provide entrance counselling to

• a review of terms and conditions of the loans and repayment options;

Other organizations have developed on-line counselling that meets federal

MYF also includes a Debt/Salary Wizard, which is an interactive calculator to

• orientation sessions offered to students and parents by the post-

• building first year experience sessions, programs or courses around one

Default Prevention Approaches: In-school and Late Stages of Enrolment

The Department’s Ensuring Student Loan Repayment: National Handbook of

• the borrower failed to graduate

• establish record-keeping processes and systems to alert the financial aid

In their Sample Default Management Plan, USA Funds suggests offering

• review of information from entrance counselling, particularly the

Developed by AES, Money Matters is a program to help students and recent

Default Prevention Approaches: After Students Leave School

The U.S. Department of Education’s Ensuring Student Loan Repayment: A