Default prevention continues to play an important role in the success of schools and is vital to a borrower’s financial well-being. Schools with high cohort default rates struggle to find lenders willing to offer competitive rates which they can present to students, while borrowers who default on their student loans may cause irreparable damage to their credit scores, with stains remaining even if they eventually repay their loans in full.

Keeping the interests of both of these audiences in mind, Nelnet continues to refine and improve its default prevention strategies, utilizing a number of proven practices, combined with innovative approaches, to proactively manage delinquency and default rates.

The mission of Nelnet’s Default Prevention department is to educate borrowers about financial literacy, and in doing so, hopefully reduce default rates and pass the benefits of lower rates on to students and schools. Helping to further these savings, Nelnet has put together a default prevention strategy for schools that utilizes a number of proven practices to help proactively manage cohort default rates. The Nelnet Servicing Guarantee program combines debt management, delinquency counseling, and cutting-edge reporting tools to provide significant value to institutions concerned about their cohort default rate. Best of all, this is a value-added service for all Nelnet schools.

As a result of a process-based focus on default management, Nelnet has recently achieved the following record-breaking performance results:

• In March 2006, Nelnet achieved its lowest FFELP delinquency rate in two years, coming in 40% below the industry average.

• Also in March 2006, Nelnet's Default Prevention department surpassed its two-year record Private Loan delinquency rate, a 38% improvement over the prior two-year average.
• Nelnet reduced the combined FFELP and Private Loan delinquent volume (where the borrower cannot be located) by 14% in April, compared to the prior 12 month average.

To learn more about how to utilize Nelnet’s default prevention strategies to benefit your school, please contact your Nelnet Campus Director or campussolutions@nelnet.net.