10 tips for better communication with borrowers

Submitted by: Shannon Cross, USA Funds account executive

As financial aid professionals, we know reaching out to borrowers in various stages of repayment is an important part of reducing or maintaining your institution’s cohort default rate. Here are some tips to improve your borrower outreach:

1. Create a strategy for your institution’s individual goals and unique borrowers.
Every institution is different. Work with your team to analyze your borrower data to determine what you would like to accomplish with your borrower outreach efforts and where you should focus your attention.

2. Manage all active cohorts.
Managing multiple borrower cohorts is like holding four ice cubes in your hand. The one you’ve held the longest is almost gone, but if you focus only on that one and ignore the others, then you’re just going to be faced with the same dilemma next year when that one has melted and a new one takes its place. Focus on the cohorts on which you can have the most impact, but proactively reach out to borrowers in all cohorts.

3. Employ a variety of communication methods.
Because each borrower is unique, you can’t expect to reach all of your borrowers in the same way. For example, phone calls are effective because you can have a conversation with the borrower to answer questions about their specific situation and, hopefully, assist the borrower in reaching out to their loan servicer and resolving any issues immediately. However, not all borrowers are going to be available via phone, and you may not have current phone numbers for some borrowers. In that case, emails or letters can be an effective way to reach out and encourage the borrower to call you to have that conversation.

4. Start counseling borrowers in the grace period.
The grace period is the 6-month period after most subsidized and unsubsidized loan borrowers are no longer enrolled in school. During this time, those borrowers don’t have to make any payments on their loans. This is a great time to start communicating with borrowers, especially those who have withdrawn from school, to establish yourself as a trusted advisor regarding their loan repayment. Use this opportunity to gather contact information for the borrower, so you can follow up closer to the start of repayment. Also, if the student has withdrawn from school, this is a good time to try to get them re-enrolled before the end of the grace period.

5. Timing is important.
Anytime you are trying to contact someone, you need to consider the best time to reach out. Mornings and evenings are typically the best time to reach borrowers on the phone. If you are not having luck reaching borrowers during a specific timeframe, try changing up the time of day that you make calls to see if that makes a difference. Also, be sure to call during times that the loan servicers’ offices are open. Once you get the borrower on the line, the goal is to come to a resolution for that individual and, often times, you need to get in contact with the servicer to accomplish that.

6. Make sure the borrowers understand what you are telling them.
When communicating with borrowers, whether over the phone or through an email or letter, really try to make sure they understand what you are explaining to them. Sometimes repayment options, and even borrower resources, can be complicated if you aren’t familiar with the terminology. Don’t use industry jargon and check in during the conversation to see if the borrower is following what you are saying.

7. Offer helpful resources.
If possible, create a page on your school website with resources (or links to other organizations’ resources) on topics such as taking student loans and loan repayment options. You can also put information about your team and any activities your office wants to promote on that page. When counseling borrowers, you can direct them to that page to learn more. Having this resource page will also validate to the borrower that you are who you say you are. With so many companies trying to get students and former students to pay for repayment assistance, it is a good idea to let your borrowers know that you are legitimate.

8. Focus on long-term solutions, not a quick-fix.
Truly acting as a counselor for the borrower means listening to that individual’s situation, providing information on all of the options, connecting the borrower with the loan servicer and — last but not least — staying on the line with the borrower and servicer to make sure a plan for long-term repayment success is established. Once the call is finished, ensure the borrower understands what was agreed upon and has all of the relevant contact information. It may take a little more time, but this level of assistance will improve the borrower outcome.

9. Regularly gather as much contact and reference information as you can.
One huge obstacle to effective borrower outreach is lack of quality contact information. Each time you speak with a borrower, verify all of the contact information you have for that individual. You can also keep your borrower contact database up to date by finding out which other departments on campus might also have contact information for those borrowers and compare that to what you have in your records.

10. Use a cohort management system to keep track of your communication activities and borrower data.
Whether you are conducting your borrower outreach on your own, outsourcing it to a third-party or doing a little of both, having a tool that can provide transparency around which borrowers have been contacted and effectiveness of those communications can streamline your efforts.