Current and former East Central College students will soon have free access to a wide range of financial literacy guides, as well as loan repayment and default prevention programs at no cost.
ECC has partnered with American Student Assistance, a private nonprofit based in Boston, Mass., to empower students and alumni in managing and repaying college loan debt.
The literacy guides will include budgeting tools, along with job, internship and scholarship databases.
Karen Koenig-Griffin, director of financial aid, told The Missourian individual schools are responsible for more loan delinquency prevention than they have been in the past.
She said the college administration has been looking for opportunities to enhance student financial competency in light of the national student debt crisis and double-digit default rates among students who attended ECC within the past three years.
Of the East Central students who had student loans in fiscal year 2009, 20.5 percent have reached default status. The percentage of student borrowers who have defaulted since 2010 is 15.1 percent.
Most federal loans enter default when payment is 270 days or more past due.
Koenig-Griffin said the majority of the students who have defaulted on their loans did not successfully complete a course of study with the college.
Being strapped into repaying a loan that they never got anything for can frustrate students, she said, and may discourage them from returning to finish an education.
“You need to get something for the money,” Koenig-Griffin said. “I tell students at orientation, ‘If you have to borrow loans, you need to get something for the money.’”
Thus far, ECC has not set any specific goals for what they hope the partnership with ASA will achieve.
According to Koenig-Griffin, ASA programming will be integrated into seminar classes for freshman students.
The student activities coordinator is working with student organizations to make upperclassmen aware of the programming and the benefits it offers as well.
Additionally, Koenig-Griffin said joining the ASA support system will be promoted heavily during exit counseling sessions.
Any student who borrows money to attend college must complete exit counseling to understand the amount due and their rights and responsibilities as a borrower.
The most recent data set available to Koenig-Griffin indicates the number of student borrowers in the 2010-11 school year, showed 1,100 ECC students with subsidized loans and 1,073 with unsubsidized loans.
However, since students can and often do accept both types of loans, the total amount of student borrowers at ECC does not necessarily add up to 2,173.
The Federal Reserve Board of New York estimates that today there are 37 million borrowers with outstanding student loans.
However, the Project on Student Debt has calculated only 700,000 individuals had enrolled in an income-based repayment plan as of 2012.
Graduates or those no longer taking classes at ECC who accepted student loans can benefit from ASA programs, too.
Koenig-Griffin said counselors from the program will contact former students in default to arranging a budget, discuss payment plans options and loan consolidation.
East Central received a default prevention grant from the Missouri Department of Higher Education to cover the direct costs of partnering with American Student Assistance.