Cottey College, Nevada, Missouri, is one of 18 colleges and universities in Missouri to receive a grant for the 2017-18 academic year that will be used to improve financial literacy and help prevent defaults on student loans.
“The default prevention grants provide schools with funding for staff and resources to help students understand how choices they make during college can seriously impact their financial future,” said Marilyn Landrum, a student assistance officer at the department. “Our goal is to assist colleges in educating students about effectively managing their student loans to avoid long-term negative consequences.”
According to a statement provided by the Missouri Department of Higher Education, grants totaling $489,000 through its Loan Default Prevention Program will be awarded. This is the 17th year that grants have been provided to higher education institutions that focus on strengthening students’ money management skills.
Programs funded by this grant educate students about the ramifications of defaulting on their student loans including collection costs, wage garnishment, loss of eligibility to apply for future federal loans, and the negative impact on credit scores.
“Cottey’s leaders are planning to use their grant to target students who need more information about loans or who are at risk of defaulting,” said Sherry Pennington, director of financial aid. “The grant will help fund two new student worker positions, printed mailers for graduates, two tablet computers for data collection purposes and in-person exit counseling sessions,” she said.
“We’re hoping that our annual default rate will decrease as we increase communication about financial literacy and default prevention,” she said.
Citing research that suggests students who don’t complete their degree program are more at risk of defaulting on their loans, Pennington explained that more emphasis also will be placed on tutoring and other services offered by Cottey’s Learning Center to promote degree completion.
“If [students are] successful at completing their degree and get out into the work world, they’ll be able to make those loan payments and not go into default status,” she said. Pennington stated this is the first time Cottey has received this grant from the state department. The grant proposal was written by Kaitlyn Russell, a financial aid counselor at the college.