Recession campaign is key to success

October 21, 2009
Contact: Spencer Jenkins 801-999-0202

SALT LAKE CITY - A new federal report ranks Utah student loan borrowers best in the nation for repayment, thanks to an innovative recession strategy deployed by the Utah Higher Education Assistance Authority (UHEAA).

In its release of the Cohort Default Rates for 2007, the U.S. Department of Education reported that only 2.1 percent of the students repaying their postsecondary loans to UHEAA defaulted, compared to a national average of 6.7 percent.  

The majority of Utah student loans are generated through UHEAA.  Of UHEAA’s approximately 170,000 borrowers, some 24,118 began repayment in 2006 and of those, only 507 borrowers – or 2.1 percent – defaulted. This is the lowest rate in the nation, and an all-time record low for Utah.

UHEAA’s Ray of Hope recession campaign is built on the premise that in tough economic times, borrowers need to hear even more from their lenders – and in personal, innovative ways.  The six-member default aversion team finds student loan borrowers wherever they can – Facebook, MySpace, at home, work, the mall.  Old fashion handwritten letters in handwritten envelopes are one of their best tools, largely because they are so rare.
 
Governor Gary R. Herbert had high praise for Utah’s low default rate. “No one likes to incur debt, but the fact that Utahns have the lowest student loan default rate in the country tells us their loans were a worthwhile investment of time and money.  Student loan debt, like mortgage debt, can be an investment in a brighter future,” Herbert said. “I applaud students, families, the Utah Higher Education Assistance Authority, and Utah colleges and universities for their collective investment in brighter futures for individuals and for our state’s economy.”

UHEAA isn’t just in the student loan business, it’s in the student success business, according to David Feitz, executive director of UHEAA, and “If someone defaults on their loan no one succeeds.  We get to borrowers and help them create a plan to repay their debt.”
 
News of Utah’s low default rate comes in the midst of a Washington, D.C. debate on nationalizing student loans.  Senators Hatch and Bennett advocate keeping student loan administration local to perpetuate Utah’s successful track record.  Even if the distribution of loans is nationalized, repayments should still be managed by UHEAA and other local servicers, Hatch contends.

“Achieving the lowest default rate in the nation doesn’t happen from Washington, D.C.,” said Senator Hatch.  “It comes from experienced and knowledgeable local people taking the time to give personal attention.”

 Lane Beattie, president and CEO of the Salt Lake Chamber, said the report is good news for Utah business.   “Higher education translates into higher paying jobs.  The future of our economy is directly tied to increased participation in higher education,” said Beattie. “We are pleased to see that well managed student debt is a solid part of Utah’s equation.”

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