Student loan default prevention experts recommend taking advantage of outside resources to assist in your efforts to keep students on track to successful repayment. If you’re planning to seek proposals from outside organizations for providing default prevention assistance, there are some best practices you’ll want to keep in mind as you develop your Request for Proposal:
1. Clearly state your institution’s goals and objectives regarding your default management program needs and requirements.
Bidding vendors, RFP bid reviewers and decision-makers should have a clear understanding of your institution’s goals and objectives, outcomes you are seeking, and the proposed services that vendors offer. Is your goal to:
• Reduce your cohort default rate to a specific target?
• Generally reduce or maintain a current CDR?
• Implement a wide-reaching default prevention service to assist your borrowers and improve future borrower repayment rates?
You might even consider cross-campus collaboration to help identify specific goals for your institution. When everyone understands the goal, it’s easier to assess which vendors actually satisfy your requirements.
2. Build in plenty of specifics about the services you are requesting.
Default prevention vendors provide various types and levels of services. For instance, some focus on direct outreach to borrowers, and some look to borrowers to sign up for services (a self-service approach). Consider these questions:
• Do you want vendors to focus on one specific cohort year or all three active cohorts?
• Are you looking for a fully outsourced solution, or will your institution want to play a role in contacting borrowers as part of your default prevention efforts?
• Will you require skip tracing?
• Do you need online system access and reporting features?
• Will you require dedicated technical support from your provider?
• What technical support is required of you to implement the service?
• Will you require periodic check-in meetings with your provider, and will you expect results reporting on a regular basis?
• What metrics will you use to evaluate the provider’s performance?
If you plan to benchmark one provider’s performance against another, be sure you are comparing the same scope of data and results. If the vendor’s proposed services (and prices) match closely the requested services in your RFP, it is a good sign that the vendor has put some effort into really understanding your needs.
3. Require standard pricing information from all bidding vendors.
Does your institution require an annual, all-inclusive price, or do you prefer to pick and choose from a menu of options? To be sure that the services included in that pricing meet all of your requirements, ask for specific descriptions of the work the vendors will perform — including the number of borrower accounts that will be included — and request an explanation of how costs are built into their models. Be sure vendors also explain clearly the costs associated with any additional services in their proposals. And to keep things clear, provide a pricing matrix for all vendors to complete, so that pricing bids are equal across the spectrum.
4. Take time to analyze and understand your bids.
When it is time to review your vendor bids, calculate all scoring of proposed services and pricing, using the same criteria for all vendors. Different services offered by vendors could influence their effectiveness in reducing CDRs. Consider these important variables when making a final comparison:
• The borrower population to be contacted.
• The method of the contact.
• The frequency of contact attempts.
• The length of one-on-one time spent with your borrowers.
If you need assistance with default prevention planning, visit www.borrowerconnect.org.