Student loan defaults down at Bay

ESCANABA — Bay College’s student loan default rates have been declining over the past few years, according to Assistant Director of Financial Aid Ruth Germain. Germain gave a presentation on default prevention to the Bay College Board of Trustees during its regular meeting Wednesday.

Students who leave Bay are grouped into cohorts based on the year they left, Germain said. Their payments on their student loans are monitored by the U.S. Department of Education for the next three years.

“During that three-year period, if the student doesn’t pay their loan for 270 days, they become a default student,” she said.

For the 2014 cohort (the most recent cohort for which relevant data is available), Bay’s draft default rate was estimated to be 17.3 percent. Germain said 51 percent of defaulters that year had left Bay College with a cumulative GPA of less than 2.0, and another 51 percent had a 0.0 GPA in their last semester at Bay. The top five majors among students that defaulted were Liberal Arts, General Studies, Business, Welding, and Medical Office Specialist.

Germain said the college’s default rate had been significantly higher than 17.3 percent in the past — for 2012, it had a rate of 23.9 percent. (Colleges with a default rate of 30 percent or more have sanctions placed on it by the Department of Education; if this rate does not decline in the following three years, it will lose its federal funding.)

In response to 2012’s high default rate, Germain introduced new efforts to decrease Bay’s future default rates.

“I instituted a default prevention plan… and I tried to do everything that I could,” she said. Efforts involved included holding one-on-one meetings with students requesting loans, introducing a section to the college’s loan request form which requires students to review their outstanding debt before borrowing more, following up with students after they leave Bay College, using e-mails, phone calls, and letters to contact delinquent students, setting up informational campaigns on loan servicers and financial literacy, and offering seminars about repaying student loans.

Germain was not the only Bay employee who played a role in reducing the college’s default rate.

“It’s not just my responsibility to make sure that our default rate is looked at, reviewed, and tried to be prevented,” she said.

To this end, the Financial Aid Office changed the Satisfactory Academic Progress Policy to increase face-to-face interaction between office employees and at-risk students. They also only offer federal financial aid for classes that go toward students’ majors and encourage student attendance and budgeting through their multiple disbursement process. Additionally, the Records Office collects updated contact information for students every semester and Bay College has been working with non-profit organization Salt to help former students repay their student loans.

In other business, the board:

– discussed contract negotiations with the Bay College Faculty Association in closed session.

– voted in favor of providing an additional $2,500 to the city of Escanaba to support its legal battles related to the “dark store” tax theory.

– approved new board policies on conflicts of interest and Social Security number privacy on second reading.

– accepted a $25,000 grant from the Hannahville Indian Community. The grant will be used to improve the Northern Lights YMCA gymnasium.

– officially recognized Bay College retirees Accounts Payable/Purchasing Coordinator Rene Boddy, Adjunct Art Instructor Al Hansen, and Full-Time Early Childhood Instructor Connie Martinsen.