Best Practices

34 Must-Have Questions in Your Default Prevention Request for Proposal

When it comes to requests for proposal (RFPs) and other formal procurement solicitations for default prevention, the process is often labor intensive for issuers and respondents. Whether it’s ensuring compliance with general purchasing procedures or assessing responsiveness to pricing and scope, there is a lot of information to weigh, often in a limited amount of time.

You can make the process more efficient if you can review the most important qualifications of your respondents before having to first absorb the contents in their entirety. The easiest way to do this is by reserving a section of your default prevention request for proposal for responses to mandatory questions.

You can begin your review by examining the answers to these questions. In some cases, this may provide you with immediate confirmation that a respondent is not qualified, sparing you additional review and analysis. By the same token, such questions might help unqualified vendors to perceive their shortcomings more clearly and convince them not to bid, saving everyone time from the start.

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Try to form questions around “deal breaking” issues that can help you quickly cull responses that are clearly not the right fit. You may not be able to capture every issue in one black-and-white question. If so, include several questions on the same topic in order to get a complete picture. These questions will also give your respondents a clear indicator of your priorities, and should help them customize their overall response to your informational needs.

Your particular circumstances will inform the questions you include, but here are some sample questions to consider:

Services & Approach

How long has your company been involved in postsecondary debt management and student success services?
How many borrowers and institutions do you currently serve?
What is your average number of borrower contacts per month?
Please explain your outreach philosophy — do you reach out proactively to borrowers, or are they expected to contact your organization?
Under which circumstances do you contact borrowers (grace counseling, skip tracing, delinquency levels, entering repayment, and exiting deferment/forbearance)?
What methods do you use to contact borrowers (telephone, letter, e-mail, skip tracing, etc.)?
Does your company employ different outreach techniques based upon the borrower characteristics (degree of delinquency, historical risk factors, etc.)?
How do you ensure borrowers perceive your services as counseling and not collection activities?
Do you work collaboratively with schools to determine the best methods and messaging when contacting targeted borrowers?
Can clients customize or otherwise modify communications to borrowers?
How do you define “contact” — i.e., an attempt to reach a borrower vs. actual engagement?
Do you involve third-party student loan servicers in your engagement with borrowers?
What repayment information/resources do you provide for borrowers?
How much IT support will our institution be required to provide in transferring data to your company?
Are you compliant with federal data security regulations? How is borrower data protected?
Do you provide training for school staff?
Do you consult with clients on creating a comprehensive default prevention plan?
Do you subcontract your services?
Do you offer student success (financial literacy, etc.) services?

Timelines & Staffing

What is your usual implementation timetable?
Do you provide a dedicated representative and contact information to your clients?
Describe the team that will support our institution.
How do you train your personnel and monitor your performance to ensure continuous improvement?

Reporting

What reporting options are available to institutions? Include both custom and recurring reports and the frequency with which they are made available.
Do you provide real-time, on-demand dashboard reporting?
What is your approach to analyzing and reporting on trending data for an institution, including forecasting future CDRs?
How do you track borrower outreach activities, and do your clients have access to such reports?
What data can you share with clients that illustrates the effectiveness of your products and services?
How do you define “resolved” or “cured?” Do you include self-cured borrowers in the analysis of your performance?

Pricing

How do you calculate prices and fees?
Does your pricing address all 3 cohort years?
Can schools select which services they want or are all services included in a contract?
Is all training on your products and services for school staff included in the price?
For how long is your proposed pricing valid?

» Free Bonus: The Step by Step Guide for Creating a Default Prevention Request for Proposal

Four Tips for an Effective Default Prevention Request for Proposal

Student loan default prevention experts recommend taking advantage of outside resources to assist in your efforts to keep students on track to successful repayment. If you’re planning to seek proposals from outside organizations for providing default prevention assistance, there are some best practices you’ll want to keep in mind as you develop your Request for Proposal:

1. Clearly state your institution’s goals and objectives regarding your default management program needs and requirements.
Bidding vendors, RFP bid reviewers and decision-makers should have a clear understanding of your institution’s goals and objectives, outcomes you are seeking, and the proposed services that vendors offer. Is your goal to:

Reduce your cohort default rate to a specific target?
Generally reduce or maintain a current CDR?
Implement a wide-reaching default prevention service to assist your borrowers and improve future borrower repayment rates?

You might even consider cross-campus collaboration to help identify specific goals for your institution. When everyone understands the goal, it’s easier to assess which vendors actually satisfy your requirements.

2. Build in plenty of specifics about the services you are requesting.
Default prevention vendors provide various types and levels of services. For instance, some focus on direct outreach to borrowers, and some look to borrowers to sign up for services (a self-service approach). Consider these questions:

Do you want vendors to focus on one specific cohort year or all three active cohorts?
Are you looking for a fully outsourced solution, or will your institution want to play a role in contacting borrowers as part of your default prevention efforts?
Will you require skip tracing?
Do you need online system access and reporting features?
Will you require dedicated technical support from your provider?
What technical support is required of you to implement the service?
Will you require periodic check-in meetings with your provider, and will you expect results reporting on a regular basis?
What metrics will you use to evaluate the provider’s performance?

If you plan to benchmark one provider’s performance against another, be sure you are comparing the same scope of data and results. If the vendor’s proposed services (and prices) match closely the requested services in your RFP, it is a good sign that the vendor has put some effort into really understanding your needs.

3. Require standard pricing information from all bidding vendors.
Does your institution require an annual, all-inclusive price, or do you prefer to pick and choose from a menu of options? To be sure that the services included in that pricing meet all of your requirements, ask for specific descriptions of the work the vendors will perform — including the number of borrower accounts that will be included — and request an explanation of how costs are built into their models. Be sure vendors also explain clearly the costs associated with any additional services in their proposals. And to keep things clear, provide a pricing matrix for all vendors to complete, so that pricing bids are equal across the spectrum.

4. Take time to analyze and understand your bids.
When it is time to review your vendor bids, calculate all scoring of proposed services and pricing, using the same criteria for all vendors. Different services offered by vendors could influence their effectiveness in reducing CDRs. Consider these important variables when making a final comparison:

The borrower population to be contacted.
The method of the contact.
The frequency of contact attempts.
The length of one-on-one time spent with your borrowers.

At the end of the process, you and your team will benefit from a careful analysis.

» Free Bonus: The Step by Step Guide for Creating a Default Prevention Request for Proposal