ISAC Presents New Default Prevention Program

SPRINGFIELD – The Illinois Student Assistance Commission (ISAC) has unveiled a new program designed to keep students from becoming delinquent and defaulting on their student loans. The Default Prevention Outreach Program expects to reach thousands of Illinois students who are considered at-risk of defaulting on student loans. Those at-risk students include first-generation college students, students from low-income families, students who leave college before graduating, and minority students.

ISAC shared its program initiatives with college and university financial aid officers at last week’s Illinois Association of Student Financial Aid Administrators (ILASFAA) annual conference in Decatur. The agency will provide free posters, change of address postcards, student loan information folders, repayment timeline sheets, banners, and contact cards to financial aid officers to share with students who are borrowing Federal Family Educational Loan Program (FFELP) student loans.

“Many students do not yet comprehend the long-term consequences that default places on their financial future,” explained Larry Matejka, ISAC’s Executive Director. “By providing financial aid administrators with high-profile, colorful materials, we hope to get that message across to students in a clear, more direct manner.”

ISAC is able to provide these outreach materials through use of federal funding specifically earmarked for default prevention and aversion activities. The Commission hopes to see its default rate continue to decline as a result of this program. Last year, the cohort default rate for federal student loans guaranteed by ISAC was 4.5 percent. That figure was lower than the national average of 5.6 percent.

In addition to educating students about how defaulted student loans damage borrowers’ credit status, ISAC is also informing students of other consequences, such as wage garnishment, professional license revocation, and income tax refund offset. The agency counsels students while they are in school and once they begin repayment on their loans. Borrowers who want to learn more about their loan repayment options, financial planning including budgeting and credit card abuse, or career advice can call ISAC toll-free at 1-800-899-ISAC (4722), send an e-mail message to cssupport@isac.org, or visit the agency’s Web site at www.collegezone.com. Borrowers who have already become delinquent can call ISAC toll-free at 800-477-4411 for help from loan counselors on repayment options and loan deferment or forbearance.