There is a great deal of interest in the higher education community about a proposal to calculate default rates on federal student loans based on a three-year, rather than the current two-year cohort of borrowers. Here are five key points for you to consider:

1. It’s Still a Proposal, Not Yet Law. The three-year cohort default rate calculation was included in legislation passed by the U.S. House of Representatives to reauthorize the Higher Education Act. But conferees for the House and Senate now must work out differences in the versions of reauthorization legislation passed by both chambers. The three-year cohort rate calculation was not included in the Senate version. The compromise bill with the new cohort rate calculation then needs to pass both houses of Congress and be signed

Schools understand they must provide entrance and exit counseling, report timely and accurate enrollment information to the U.S. Department of Education, and share academic-progress information with all school departments. But the ideal default-prevention/debt-management plan should do more than just meet federal regulatory requirements.Consider some of the following suggestions as you develop or update your school’s plan.1. Start early! When you host open houses for high school students and their parents, start the discussion about how important it is to live like a student while in college. USA Funds Life Skills, USA Funds’ financial-literacy program, can help you focu

Why must I provide documentation?Why documentation? I’ve been a financial aid professional since 1976 making me either slightly crazy, a true veteran or both. Throughout the years I have consistently witnessed schools make one of two mistakes that are deadly – to cash flow, to bad debt and for the student, as well. One of the two biggest mistakes that schools make is failure to document.Document what? Each school has the responsibility to create and update solid policies and procedures. While that typically creates its own items of documentation, anything that happens with a student that falls outside the parameters set in those policies and procedures MUST be documented.As professionals and employee in t

Unless you’ve been living in a cave lately, you’ve no doubt heard at least a little something regarding changes in the student loan industry. As an astute “school person,” you’re trying to assess how these changes will affect you, your school and your students. Well, I can tell you with absolute certainty, the answer is…nobody knows! Here’s what’s happening, in a nutshell: The government is taking away about $20 billion in subsidies to the lenders (give or take a billion or two) to help fund an increase in Pell grants. While this re-appropriation is good for Pell recipients, much of the angst school owners are experiencing stems from their uncertainty about whether or not the lenders will continue to view their schools as viable investments.I’m no financial aid wizard

Well, it has been a month since we were in New Orleans and the “fog” of Bourbon Street should have lifted for everyone by now. This was the first Career College Association Annual Conference that I have attended and I can say without reservation that it was a very positive experience. I had the opportunity to meet many wonderful people that I am looking forward to working with in the weeks and months ahead. The marketplace is evolving rapidly, particularly on the lending side, so it will be intriguing to see where we are a year from now.What about the rest of you that have attended prior conferences? How did New Orleans fare in comparison? What were some key takeaways and lessons learned this year? It would be great to hear some other perspectives.

This past week I was reminded of the time I spent in Saudi Arabia with the 1st Marine Division preparing for our mission to evict the Iraqi Army from Kuwait. The first Persian Gulf War was America’s first large-scale deployment of combat forces overseas since the Vietnam War. This was 1990. The United States Military had spent the better part of the last decade having undergone an unprecedented build-up and modernization of its forces. The M1 Abrams tank, the F-117 Stealth Fighter and other new systems were technological marvels, but they were untested in battle and to be sure, they had their critics. The media was quick to point out that American forces were inexperienced, untested and perhaps might be in for a long, bloody fight with the battle-hardened Iraqi Army that had spent the pr

This past week I was reminded of the time I spent in Saudi Arabia with the 1st Marine Division preparing for our mission to evict the Iraqi Army from Kuwait. The first Persian Gulf War was America’s first large-scale deployment of combat forces overseas since the Vietnam War. This was 1990. The United States Military had spent the better part of the last decade having undergone an unprecedented build-up and modernization of its forces. The M1 Abrams tank, the F-117 Stealth Fighter and other new systems were technological marvels, but they were untested in battle and to be sure, they had their critics.

Anyone who has ever spent time in a Marine Corps uniform or perhaps is just a fan of Clint Eastwood movies, is familiar with one of my all-time favorites, Heartbreak Ridge. In it, Eastwood plays the tough-as-nails Gunnery Sergeant Thomas Highway who is charged with transforming his troops into highly disciplined, combat-ready Marines. One of Gunny Highway’s mantras throughout the movie is that when unexpected circumstances or events run contrary to even the most carefully developed plans, we must always be prepared to “overcome by improvising and adapting.” In light of the current regulatory storm that is underway on Capitol Hill regarding higher education, a.k.a. the Student Loan Sunshine Act, I couldn’t help but to recall the sage-like words of Gunny Highway. Improvise and adapt