Great Lakes Achieves Lowest Claims Rate in Nation

NASFAA Constituent Member News

[The following is a news release issued by Great Lakes Higher Education Guaranty Corporation.]

Great Lakes Achieves Lowest Claims Rate in Nation

Borrower Advocacy Minimizes Default, Saving Borrowers and Taxpayers Millions

Madison, Wis. - Great Lakes Higher Education Guaranty Corporation (Great Lakes) continues to lead the way in preventing default, according to new figures recently released by the U.S. Department of Education. For the third straight year, Great Lakes achieved the lowest claims rate among all guarantors in the Federal Family Education Loan Program (FFELP). Great Lakes' claims rate of 0.77 percent for federal fiscal year 2007 is less than half the national average, and more than 30 percent lower than the next best national guarantor.

The claims rate, also known as the reinsurance trigger rate or annual default rate, is the truest measure of a guarantor's overall success in preventing default. Unlike the cohort default rate, which considers only borrowers who recently entered repayment, the claims rate looks at a guarantor's full body of work - its entire portfolio of loans in repayment. Having the nation's lowest claims rate means that Great Lakes is helping all borrowers avoid the dire consequences of default - not just those who happen to be included in a specific cohort default rate calculation.

"We have long championed a borrower-advocacy focus for guarantors. It's simply the right thing to do - not only for borrowers, but for schools, lenders, and taxpayers," said Richard D. George, Great Lakes' President and Chief Executive Officer. "Our ability to maintain the lowest claims rate nationally for three years running is testament that our borrowers-first approach, the inspiration for our Voluntary Flexible Agreement (VFA), continues to be our best bet for ensuring the success of student loan borrowers and the federal loan programs."

Under its VFA, Great Lakes is compensated for successful default prevention instead of post-default collections. This borrower-advocacy focus gives Great Lakes added incentive to continually refine default prevention practices - practices that are shared through powerful tools and training that help schools maximize their own default prevention efforts.

For more information about Great Lakes' borrower advocacy and default prevention initiatives, please contact Amy Kerwin at 608-246-1785.

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About Great Lakes
Great Lakes Higher Education Corporation and Affiliates works with schools, lenders, and community organizations to change lives for the better through higher education. Great Lakes supports these partners with financial, educational, and operational resources that help students and families pay for college and build bright futures. As a leading guarantor, originator, and servicer of student loans for over forty years, Great Lakes serves more than 2,700 schools and 1,400 lenders across the nation. One of the nation's largest integrated providers of student loan services, Great Lakes services student loans for more than two million borrowers, holds guarantees on more than $43 billion in FFELP loans. Great Lakes serves as the designated guarantor for Minnesota, Ohio, Wisconsin, Puerto Rico, and the U.S. Virgin Islands under the Higher Education Act. Great Lakes is headquartered in Madison, Wisconsin, with operating centers in Ohio, Minnesota, and Wisconsin. For additional information, visit mygreatlakes.org.

Posted 01/09/08 to www.NASFAA.org. Posting of information in Constituent News is done as a service to Members and does not imply endorsement or support by NASFAA. NASFAA does not review this information for content or accuracy.