JB Pritzker, Governor, State of Illinois

Default Prevention

Default occurs when a student is 270 days delinquent on their Stafford loan payment.  The consequences of default have a negative impact on a student’s present and future financial health.  For instance, the default will be reported to national credit bureaus, which may impact the borrower’s chances of obtaining credit, or financing an automobile or house.  It may also mean higher interest rates, increased insurance premiums and in some cases, may impact an employer’s hiring decision.  Fortunately, default can usually be avoided.

Default Prevention activities target students who have graduated or left school and have become delinquent on their student loan by at least 30-60 days. They are designed to use state-of-the-art technology combined with a customer-centric approach, to reach delinquent borrowers and provide both early intervention and late-stage counseling. These services help avert default thereby supplementing lenders' efforts to prevent defaults.  They do not replace the lender's responsibility to perform due diligence.  If a lender fails to continue required due diligence while the guarantor is providing assistance, interest penalties or loss of a guarantee on the loan may result.

Default Aversion Assistance is collection assistance provided to a lender by a guarantor. It involves the initiation by the guarantor of at least three collection activities. {34 CFR 682.404(a)(2)(ii)}

Lenders should contact isac.lenderservices@illinois.gov for information on additional default aversion assistance requirements, including time frames for canceling a default aversion assistance request, resubmitting a return default aversion assistance request, receiving skip default aversion assistance, and updating a default aversion assistance delinquency date.

Default Prevention Services

Through our toll free number (800.899.4722) or by a friendly courtesy call, ISAC counselors specializing in Default Prevention are helping delinquent borrowers by providing useful information on available repayment options to fit their financial needs, as well as deferment and forbearance eligibility.  Answers and advice on loan consolidation can also be obtained.    

DAAR (Default Aversion Assistance Request) Report

The DAAR report helps schools to work with lenders/servicers and ISAC by identifying delinquent borrowers so that the school may attempt to contact borrowers to encourage repayment, deferment or forbearance in order to avoid default.  

National Student Clearinghouse

ISAC's participation with the National Student Clearinghouse provides a conduit for critical student status and enrollment information between schools, lenders/servicers and ISAC.