When a student defaults on their federal loans after they leave DePaul, the university’s default rate increases. Default rates help determine a university’s future federal aid eligibility, so keeping them low is crucial for safeguarding federal financial assistance for students. This is especially important for an institution as heavily dependent on tuition revenue as DePaul.
The Office of Financial Aid (OFA), a department within Enrollment Management and Marketing, is responsible for managing the university’s default rate and plays a pivotal role in breaking down financial barriers for students. OFA’s efforts are paying off. DePaul’s 3-year cohort default rate is 3.3 percent, compared with an average rate of 11 percent in Illinois and 14.7 percent nationally.
“Our goal is to help students graduate with a manageable debt level,” says Paula Luff, associate vice president of Enrollment Services, who oversees OFA. “It’s critical for us to help students understand their repayment options so they can prevent excessive borrowing and make the best financial decisions possible.”
The average federal debt level of a DePaul graduate is $25,000. About 67 percent of students receive federal loans, while only 12 percent use private loans. OFA provides upfront counseling to students, especially those who are at risk of excessive borrowing, to manage the default rate. By proactively working with students to understand and manage their debt, OFA helps position them to successfully repay their loans.
In 2013, OFA contracted with a third-party vendor, Inceptia, to help manage DePaul’s default rate through backend counseling. Inceptia provides a free service to students that explains their repayment options, answers questions and demystifies a process that can be intimidating and complex to navigate alone. Inceptia counselors specifically reach out to students who are in repayment grace periods, or are delinquent on their accounts. This effort has paid dividends, as DePaul’s default rate has dropped nearly 3 percentage points in the last two years.
DePaul’s Financial Fitness program, administered through OFA, is another way to help students manage financial costs and help keep the default rate down. Going on seven years, the program offers free resources, workshops and one-on-one advising. Educational topics include budgeting and money management, loan repayment strategies, saving and investing, and debt management.
OFA’s efforts have been successful in preparing students for repayment, but external factors such as an improving economy play a role as well.
“DePaul’s default rate has always been historically low,” shares Luff. “An expanding job market and increased opportunity have also helped since students who are employed are able to pay back their loans more easily. At the end of the day, when our students are successful, we all succeed.”
For more information about the services offered by the Office of Financial Aid, contact Paula Luff
, associate vice president of Enrollment Services.