Partner with an experienced asset manager
Given the high balances and long-dated cash flows for student loans, improving returns requires a dedicated and experienced team of asset managers.
Unlike other consumer assets, student loans are non-collateralized debt that includes a payment grace period which results in deferred cash flows for lenders and investors. Loan repayment amounts and options are also varied, and this area of finance is subject to nuanced regulations that require diligent resource-intensive oversight for compliance.
Too often, loan holders dismiss the need for a specialized servicer based on cost and short-term economics rather than the long-term benefits of improved portfolio performance and streamlined day-to-day operations. Understanding the key consideration for various stages of a loan’s lifecycle allows you to choose the right partner for both operational efficiency and asset performance.
Three strategies to implement right now
1. Communicate proactively with borrowers
Borrowers must clearly understand what’s expected of them before and during repayment, including their payment options and the consequences of delinquency or default. Communicating repayment options and initiating outreach at the first sign of delinquency is a proven strategy for avoiding default.
2. Create user-friendly technology
Making repayment easier with online and mobile payment options is critical for borrowers in the current digital landscape. Additionally, loan servicing technology should provide lenders with detailed reporting in order to monitor overall portfolio performance and address any increase in delinquency or default.
3. Establish default aversion and collection strategies
While most servicers can manage borrowers that are current on their loan payments, preventing default requires outreach at critical milestones during initial delinquency. For loans that do ultimately end in collections, a specialized team of agencies will produce superior results compared to relying on internal resources or non-specialized primary servicers.
How Goal Solutions can help
We’re more than just another vendor—we’ll be your partner for the long-term.
Our complete asset management solution, from borrower outreach and expert servicing to default aversion and collections, will help improve your returns without straining your internal resources. With decades of experience in consumer and student loans, we’re equipped with the caliber of technology and expertise it takes to help you maximize your student loan performance.