Update Campus Partners Student Loan Company by jennyyingdi

VIEWS: 13 PAGES: 20

									                                 UPDATE
EFG Technologies
Winston-Salem, NC                                                                            January 31, 2001
 INSIDE THIS ISSUE:                                                                      HOLIDAY SCHEDULE:


    Legislative Update                         On-Line Processing Manual     February 19,
    Regulatory Update                          Congratulations to Teams      Presidents Day
    Education Department Update                2000 Index                    (System IIISM will be
    Form 1098-E Mailing                        Workshops                     available during normal
    Annual Statement Mailing                   Regional Meetings             scheduled hours.)
    NSLDS Reporting                            Conferences
    Consolidation Payments                     Cutoff Dates
    Customer Anniversaries                     Fun Fact
    Customer Service Enhancements              How to Process a Loan Rehabilitation


                                       INSIDE EFG Technologies:
                                   Debra Adams, Call Center Specialist

     For on-line issues of the Update, visit our web site at www.efg.net/efgtechnologies.


House Education Panel Chairman Selected                                                         LEGISLATIVE
Rep. John Boehner, who represents the Eighth Congressional District of Ohio, was                    UPDATE
named Chairman of the House Education and Workforce Committee for the 107th
Congress. The six-term Republican congressman succeeds Rep. William F. Goodling
(R-PA), who retired as committee chairman.
                                                                                               REGULATORY
Dear Colleague Letter, GEN-00-24
                                                                                                   UPDATE
In December 2000, the Department of Education (ED) issued a Dear Colleague
Letter, GEN-00-24, titled RETURN OF TITLE IV AID—VOLUME #1. This
Letter provides additional guidance on the application of the Return of Title IV Aid
requirements. The subjects addressed in this letter are:

•       Applicability of the Return of Title IV Aid requirements when a student is not
        charged by the institution;
•       Institutional charges;
•       Withdrawals from standard term-based programs using modules;
•       Withdrawal date—Institutions that are not required to take attendance;
Page 2

REGULATORY                      •         Withdrawal date—Institutions that are required to take attendance;
UPDATE                          •         Title IV aid that could have been disbursed;
(Continued)                     •         Period of enrollment example;
                                •         Post-withdrawal disbursements;
                                •         Percentage of Title IV aid earned; and
                                •         Return of funds.

                                This Dear Colleague Letter is the first in a series of letters that will provide addi-
                                tional guidance on the “Return of Title IV Aid” requirements found in section 484B of
                                the Higher Education Act of 1965, as amended (HEA) and §668.22 of the Student
                                Assistance General Provisions regulations. The Return of Title IV Aid requirements
                                were added to the HEA by the Higher Education Amendments of 1998 (Public Law
                                105-244, enacted October 7, 1998).

                                If you have questions about this topic, you should review the following documents
                                that contain earlier guidance issued by ED:
                                •       Dear Colleague Letter GEN-98-28;
                                •       The preamble to the Final Regulations (64 FR 59016), published on
                                        November 1, 1999); and
                                •       Chapter 6 of Volume 2, “Institutional Eligibility and Participation” of the
                                        2000-2001 Student Financial Aid (SFA) Handbook.

                                Message to Default Reduction Assistance Program (DRAP) Users
                                On December 27, 2000, ED announced a cost-cutting measure related to the
                                Default Reduction Assistance Program (DRAP). In an effort to reduce costs associ-
                                ated with undeliverable DRAP notices, ED will now require schools to provide
                                physical addresses for borrowers. Because most returns are addressed to Post
                                Office box numbers, ED will discontinue sending notices to borrowers with Post
                                Office box addresses.

                                In making this change, ED hopes to reduce unit costs associated with DRAP by

                                                          E-mail Directory
Debra Adams, Call Center Specialist.: dadams@efg.net                    Barbara Joyce, Accounts Rec. Supervisor: bjoyce@efg.net
Steve Anderson, Conversion Supervisor: sanderson@efg.net                Lisa Koniuto, Contract and Proposals Mgr.: lkoniuto@efg.net
Bob Balsamo, Production Control Supervisor: bbalsamo@efg.net            Lando Little, Customer Service Assoc. Director: llittle@efg.net
Daisy Bass, Customer Service Assoc. Director: dbass@efg.net             Charles Parker, Customer Support Director: cparker@efg.net
Beth Bealle, Product Development Director: bbealle@efg.net              Kathy Riddle,Transaction Processing Mgr.: kriddle@efg.net
Mark Bondurant, Private Loan Servicing Manager: mbondurant@efg.net      Bennette Roberson, Customer Service Rep.: broberson@efg.net
Betsy Burton, Market Development Director: bburton@efg.net              Jeff Smejkal, Operations Research Manager: jsmejkal@efg.net
Vicky Caldwell, Customer Service Rep.: vcaldwell@efg.net                Brenda Smith, Call Center Supervisor: bsmith@efg.net
Sharon Cameron, School Relations Coord.: scameron@efg.net               Judy Smith, Information Tech. Manager: jsmith@efg.net
Bridgett Christian, Human Resources Mgr.: bchristian@efg.net            Kathy Speight, Training & Develepment Coord.: kspeight@efg.net
Joel Cofer, Customer Service Rep.: jcofer@efg.net                       Andrea Thompson, Customer Service Rep.: athompson@efg.net
Joanna Cortez-Gann, Private Loan Servicing Svr.: jcortez-gann@efg.net   Tracy Walters, Customer Service Rep.: twalters@efg.net
Sharal Duncan, Customer Service Rep.: sduncan@efg.net                   Carolyn Williams, Documentation Supervisor.: cwilliams@efg.net
Terry Gaither, Customer Service Rep. Team Leader: tgaither@efg.net      Jim Williams, Audit and Compliance Dir.: jwilliams@efg.net
Wallace Grooms, Private Loan Servicing Svr.: wgrooms@efg.net            Kim Wilson, School Relations Coord.: kwilson@efg.net
John Elliott, Info. Technology Infrastructure Dir.: jelliott@efg.net    Cletra Wormley, School Relations Coord.: cwormley@efg.net
Wendy Flinchum, Customer Service Rep. wflinchum@efg.net                 Kim Wright, Information Technology Dir.: kwright@efg.net
Charles Fulp, Facilities/Distribution Manager: cfulp@efg.net            Customer Service Requests: campusbased@efg.net
Paula Hall, Payment Processing Svr.: phall@efg.net                      World Wide Web Site: http://www.efg.net/efgtechnologies

01-1 EFG Technologies Update                                                                                   Continued on next page
                                                                                                                           Page 3

reducing the number of undelivered notices.                                                                  REGULATORY
                                                                                                                  UPDATE
Participation in DRAP is voluntary to institutions and is designed to be another                               (Continued)
alternative in the fight against delinquent and defaulted borrowers. DRAP will con-
tinue to notify institutions of bad addresses they receive from mail returned with a
physical address.

Dear Colleague Letter GEN-01-01 (ACTION LETTER #5)
In early January, the Department issued Dear Colleague Letter GEN-01-01
(ACTION LETTER #5) dealing with recent changes and enhancements to the
Student Aid Internet Gateway (SAIG).

This action letter provides information about recent changes and enhancements to the
SAIG, ED’s vehicle for electronically transmitting and receiving data on financial aid
programs authorized under Title IV. These enhancements may require schools to
modify some of their system operations and office procedures. Also included are
instructions on the use of the updated SAIG Enrollment Form.

ED recently established a web site, http://SFAWebEnroll.ed.gov, which replaces
paper enrollment for SAIG, as an easy way to enter and transmit enrollment data.
Again, these new enhancements may require institutions to modify their system
operations and office procedures.

Federal Register Notice, December 22, 2000
This Notice alerts institutions participating in the student financial assistance programs
authorized by Title IV of the Higher Education Act of 1965, as amended (Title IV,
HEA programs) that they must meet the updated minimum technical hardware and
software specifications determined by ED in order to participate in the designated
electronic processes used to administer those programs. The new specifications are
provided in this Notice.

The effective date of these provisions is January 1, 2002.

Availability of Quality Analysis Tool for Windows 2000-2001, v. 1.0                                     DEPARTMENT OF
ED recently released Version 1.0 of its Quality Analysis Tool for Windows 2000-                             EDUCATION
2001. This new software can be used by participating Quality Assurance Program                                 UPDATE
schools to intensively analyze financial aid data to help develop effective school
verification programs and to improve services to students. The software, installation
guide, and a cover letter are available at: http://SFAdownload.ed.gov.



EFG Technologies UPDATE, a newsletter for our customers, is published monthly by EFG Technologies in Winston-Salem, NC.
Editor: Carolyn Williams and Legislative and Regulatory Editor: Jim Williams. Contributors this issue: Beth Bealle, Betsy
Burton, Sharon Cameron, Tammy Gupton, Paula Hall, Lisa Koniuto, Sharon Swaim, Kim Wilson, and Cletra Wormley. NOTE:
This publication contains material related to the interpretation of federal rules and regulations of the Title IV Program of the
Higher Education Act. While EFG Technologies believes the information contained herein is accurate and factual, this publica-
tion has not been reviewed or approved by the US Department of Education. Please consult the Department of Education or
your legal counsel with questions or concerns. Please send any correspondence to Documentation Department, EFG Tech-
nologies, PO Box 3176, Winston-Salem, NC 27102-3176 or directly to Carolyn Williams, Editor, at cwilliams@efg.net.
01-1 EFG Technologies Update                                                                             Continued on other side
Page 4
FORM 1098-Es                   Form 1098-Es Mailed
                               If you contract with us for TRA student loan interest reporting, we have mailed Form
                               1098-E to your borrowers who may be eligible for a federal student loan interest tax
                               deduction. The TRA Interest report was sent to your office separately from your
                               regular month-end reports. In February we will also provide information to the IRS
                               for your borrowers who paid $600 or more in eligible interest.

                               Included with this issue of Update are the following documents:

                                       Form 1098-E – A facsimile of Form 1098-E sent to borrowers who paid
                                       eligible interest of $5.00 or more during the 2000 tax year.

                                       Important Information Regarding Your Taxes – This informational letter
                                       was sent to borrowers with Form 1098-E.

                                       Frequently Asked Questions (FAQs) – This document was also included
                                       with Form 1098-E and will be posted to our Web site. The FAQs address
                                       some of the standard questions we anticipate receiving from your borrowers
                                       and may help you answer any inquiries you receive in your office.

                                           ATTACHMENT: TRA Documents (3)


ANNUAL                         Annual Statements to be Sent in February
STATEMENTS                     We will send Annual Statements during the second week of February to borrowers
                               making payments by Automatic Direct Draft (ADD) or coupon books. These state-
                               ments provide borrowers with information on the status and balance of their loans.

NSLDS                          Assigned/Accepted Loan Reporting to NSLDS
REPORTING                      Because NSLDS recently installed new edits related to processing data reported on
                               loans assigned to ED for collection, it is critical that EFG Technologies be notified
                               immediately when your assigned loans are accepted by ED. When a loan is newly
                               assigned to ED for collection, it is reported to NSLDS with a loan status of “AE.”
                               NSLDS translates the loan status of “AE” to a flag that allows EDs Debt Collection
                               Service (DCS) to assume reporting responsibilities for the loan. Once the loan is
                               accepted for collection, additional reporting of the loan should cease. In order for
                               NSLDS reporting to stop on that loan, we must place the loan in an accepted status
                               on System III. We cannot place the loan in an accepted status until we receive
                               acceptance information from you.

                               Your NSLDS Error Load report for the December data submittal will include your
                               loans with this condition. You may also review all loans in your portfolio that are in
                               assigned status using the Inventory of Loans Referred/Assigned/Accepted report.




01-1 EFG Technologies Update                                                                        Continued on next page
                                                                                                                Page 5
William D. Ford Consolidation Loan Clarification                                             CONSOLIDATION
As announced in last month’s Update, EFG Technologies is now authorized to receive           LOAN PAYMENTS
William D. Ford Consolidation Loan payments electronically. We will be using ED
guidelines to process the corrective actions for overpayments and underpayments. ED
developed these guidelines because payoff amounts provided by loan holders are
often not the exact amount owed on the date the payoff is received. Processing small
amounts is costly for everyone concerned.

EFG Technologies will send refunds to the William Ford Loan Consolidation Center if
we receive an overpayment of $10.00 or greater. If the remaining balance on a loan is
greater than $25.00, we will request additional funds. We will automatically process a
compromised write-off (W4) for underpayments less than $25 and overpayments less
than $10. Being able to respond directly to the federal loan consolidator will eliminate
a verification step for the school. Guidelines for these tolerance levels can be found at:
http://www.loanconsolidation.ed.gov/loanholder/ltolerance.shtml.

Customers who decide to have these payments mailed directly to their offices will be
responsible for processing the overpayments and underpayments. If you have any
questions regarding this process, please contact your customer service representative.

Long-term Customers Recognized                                                                   CUSTOMER
Our deepest appreciation and thanks goes to customers celebrating long-term anniver-         ANNIVERSARIES
saries with us during January, February, and March. Special recognition goes to
Brevard College, a customer for 35 years, and Armstrong State, Connecticut,
Emerson, Florida Southern, Iona, and Sistema Ana G. Mendez Colleges, who have
been customers for 30 years. Names of customers attaining milestone anniversaries
with us are listed attached. Customer anniversaries for the second quarter will be listed
in the April Update.

Our apologies go to the University of Kentucky, whose name was not included in
last month’s recognition of customers commemorating anniversaries of over 30 years
with us. They have been a customer since 1968.

                  ATTACHMENT:            Long-term Customer Anniversaries

We’ve Got Mail!
As part of our on-going efforts to better serve our customers, we recently installed             CUSTOMER
seven new personal computers in Customer Service. You now have the convenience                     SERVICE
of directly emailing questions and comments to your Customer Service Representa-             ENHANCEMENTS
tives (CSRs). Their email addresses are listed in the email directory on page two of
this Update. With PCs, CSRs can now use DataStreamSM, WebConnect, and
DocumentDirect, further facilitating communication with customers.

During the next six months, we will install 52 PCs in Borrower Services, Customer
Support, School Relations, and the Distributution Center. Ten more computers will be
installed in our Private Loan Servicing Department.

The installation of additional computers and enhancements to our Call Center soft-

01-1 EFG Technologies Update                                                                  Continued on other side
Page 6
CUSTOMER                       ware, including a Symposium Agent upgrade and installation of screen pops and
SERVICE                        Symon Net Brite display boards, will improve our services to both customers and
ENHANCEMENTS                   borrowers. For more details about some of these enhancements, please see this
(continued)                    month’s “Inside EFG Technologies” profile on Debra Adams, Call Center
                               Specialist.

ON-LINE PROCESS-               Updated On-Line Processing Manual Available
ING MANUAL                     Our On-Line Processing Manual, updated in September 2000, is available to you at
AVAILABLE                      no cost via a PDF download. The manual is a valuable reference tool for DataLinkSM
                               processing. The PDF file includes bookmarks to each chapter for easier and faster
                               navigation through the documentation. All you need is Adobe Acrobat Reader, version
                               4.05, which is also available free. Contact your school relations coordinator, who will
                               provide you with a PDF file of the manual. If you prefer a hard copy, send your
                               request to your Customer Service Representative. The cost is $50.00 per manual.

CONGRATS TO                    GO TEAMS!
BOWL                           Congratulations to our customers whose football teams participated in the following
PARTICIPANTS                   College Bowl Games. There are no losers, because--you guessed it--all of our
                               customers are winners!

                               School                                  Bowl Game
                               Florida State University                Orange Bowl
                               University of Washington                Rose Bowl
                               Kansas State University                 Cotton Bowl
                               Clemson University                      Gator Bowl
                               Virginia Polytechnic Institute          Gator Bowl
                               University of South Carolina            Outback Bowl
                               University of Nebraska-Lincoln          Alamo Bowl
                               UCLA                                    Sun Bowl
                               Iowa State University                   Insight.com Bowl
                               Fresno State University                 Silicon Valley Bowl
                               Boise State University                  Humanitarian Bowl
                               Texas Tech University                   GalleryFurniture.com Bowl
                               Arizona State University                Aloha Bowl
                               University of Virginia                  Oahu Bowl

2000 UPDATE                    Use Index to Locate Articles
INDEX                          To help you locate important articles contained in past issues of the Update, we have
                               attached our Update Index for 2000. If you need to find an article in a hurry, an
                               index with links to each listed article is also available through our website at
                                http://www.efg.net/efgtechnologies/Publications/Update/default.asp.

                                               ATTACHMENT:             Update Index


   The mission of EFG Technologies is to provide high quality, accurate, and effective pro-
   cessing services in response to the needs of our customers. We strive to consistently
   provide superior service and innovative solutions at a competitive price.

01-1 EFG Technologies Update                                                                     Continued on next page
                                                                                                           Page 7

Workshop Update                                                                                WORKSHOP
If you want to get the most out of our services, consider attending our next bi-annual           UPDATE
workshop to be held in Winston-Salem during the week of March 26-30, 2001.
Our Service Overview Workshop will be held on March 26-28, and the On-Line
Processing Workshop will be held March 29-30. Registration information is at-
tached.

                   ATTACHMENT: Registration Form and Workshop Flyer

Regional Meetings                                                                                 REGIONAL
Below is a tentative list of regional meetings we have planned for 2001. Many                     MEETINGS
thanks to the schools that have volunteered to host one of these meetings. If you
would like to host one of the open dates and have the space available on your
campus, we’ll supply the information and coordinate the lunch arrangements.

     Location                           Date             Host
     Los Angeles, CA                    March 5          Art Institute of Los Angeles
     Sacramento, CA                     March 6          CSU-Sacramento
     Boston, MA                         March 12         Brandeis University
     Columbia, SC                       April 6          Columbia College
     Richmond, VA                       April 24         University of Richmond
     Dayton, OH                         May              University of Dayton
     Winter Park, FL                    May 21           Rollins College
     Philadelphia, PA                   May              Open
     Seattle, WA                        June 18          Seattle Pacific University
     Kansas City                        July             Open
     Chapel Hill, NC                    September        Open
     Phoenix, AZ                        October          Open
     New York, NY                       November         St.Thomas Acquinas College
     Maryland                           November         Open
     Arlington, TX                      November         Open

Upcoming Conferences                                                                     CONFERENCES
EFG Technologies will be attending the following conferences. As we learn of more
conferences, we will publish the information in future issues of the Update and on
our web site at www.efg.net/efgtechnologies.

The 2001 COHEAO Annual Meeting will be held on January 28-31 at the Ritz-
Carlton, Pentagon City. The conference will feature a Capitol Hill Reception with
lawmakers.

The 10th Annual EARMA Collections Conference will be held on April 3-4,
2001 at the National Conference Center in East Windsor, New Jersey. For more
information, call 723-235-9184.

The Professional Development Group, Inc.’s 15th National Conference for
College and University Bursars will be held April 8-11 in Washington, D.C. For
more information, visit www.prodev.com.

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Page 8
CUTOFF DATES                   Cutoff Dates
                               The following table shows cutoff dates for February and March.



                                Month                                            February 2001       March 2001

                                Last Day to Receive Collection Payments             2/23/01            3/27/01

                                Last Day to Receive Regular Payments                2/26/01            3/28/01

                                Last day for Online Payments                         3/2/01            3/30/01

                                Date Final Post Begins                               3/2/01            3/30/01

                                Report Date Used for Final Post                     2/28/01            3/31/01


                                Last Day Deposits Created for Deposit to Bank       2/28/01            3/30/01
                                Account




FUN FACT                                                                                 FUN FACT

                                                                           Did you know that we answer ap-
                                                                           proximately 40,000 letters/faxes/emails
                                                                           from borrowers each year! Your
                                                                           borrowers like to keep us busy.




01-1 EFG Technologies Update
                                                                              (Front)
                                                                     CORRECTED
RECIPIENT’S/LENDER’S name, address, and telephone number                                                         OMB No. 1545-1576

              EFG Technologies
                                                                                                                                                         Student
              P.O. Box 3176
              Winston-Salem, NC 27102                                                                                  2000                         Loan Interest
              Phone: 1-800-334-8609                                                                                                                   Statement
                                                                                                                       Form 1098-E
RECIPIENT’S Federal identification no.   BORROWER’S social security number      1     Student loan interest received
                                                                                                                                                             Copy B
             043405187                              123456789                                      $125.00
                                                                                                                                                        For Borrower
BORROWER’S name, Street address (including apt. no.), City, State, and
ZIP code                                                                                                                                                  This is important tax
                                                                                                                                                      information and is being
                                                                                Lender                                                               furnished to the Internal
                                                                                Sample University                                                    Revenue Service. If you
                                                                                                                                                          are required to file a
                                                                                00001-000000001-01                                                         return, a negligence
                                                                                                                                                     penalty or other sanction
Joe Borrower                                                                                                                                        may be imposed on you if
123 Main Street                                                                                                                                       the IRS determines that
Anytown, NC 12345                                                                                                                                     an underpayment of tax
                                                                                                                                                          results because you
                                                                                                                                                       overstated a deduction
Account number (Optional)                                                                                                                            for student loan interest.


Form 1098-E                                                        (Keep for your records.)                      Department of the Treasury – Internal Revenue Service



                                                                             (Back)



Instructions for Borrower
A person (including a financial institution, a                                              payments were made during the first 60 months
governmental unit, and an educational institution)                                          the interest payments were required. However,
that is engaged in a trade or business and, in the                                          the interest reported on this statement may be
course of such trade or business, received interest                                         different from the interest you may deduct. See
of $600 or more on a student loan in the calendar                                           Pub. 970, Tax Benefits for Higher Education, for
year must furnish this statement to you.                                                    more information.

You may be able to deduct student loan interest                                             Box 1. Shows the interest received by the lender
on your income tax return if the interest                                                   during the year on this student loan.
                        Important Information Regarding Your Taxes




January 22, 2001


Dear Student Loan Borrower:

As a result of the Taxpayer Relief Act of 1997, taxpayers who received loans to pay the
cost of attending an eligible educational institution for themselves, their spouse or their
dependents may be eligible to deduct up to $2,000 in interest paid on those loans during
2000. This deduction is for federal income tax purposes, and can be claimed by eligible
taxpayers beginning with the 1998 tax year.

The deduction is available only for interest paid on eligible loans during the first 60 months
of repayment. The student loan interest deduction for 2000 is available for interest
payments made on or after January 1, 2000.

To be eligible for the deduction, the student loan must have been used to pay the costs of
attendance at an eligible educational institution for a student enrolled at least half-time in a
program leading to a degree, certificate, or other recognized educational credential. Eligible
loans include, but are not limited to, federal student loans, including loans for health
profession students; federal consolidation loans; federal Parent Loans for Undergraduate
Students (PLUS); education loans issued by banks and private lenders; and institutional
loans. Loans do not have to have been made in 1998 to be eligible.

Eligible educational institutions include most colleges, universities, vocational schools, and
other post-secondary educational institutions.

EFG Technologies has enclosed Form 1098-E which provides you with the eligible interest
you paid on your loans in 2000. If you have questions regarding the information on this
form, please contact us at the toll-free number listed on the form. We have provided
answers to frequently asked questions on the reverse side of this letter. We encourage you
to contact your tax advisor for any questions regarding your specific tax situation. You can
obtain complete information about this interest deduction in IRS publication 970, “Tax
Benefits for Higher Education.” This publication is available from your local IRS office and
may also be downloaded from the IRS web site at http://www.irs.ustreas.gov/.

We appreciate this opportunity to serve you.

Sincerely,


EFG Technologies


Enclosure


                         P.O. Box 3176     Winston-Salem, NC 27102
                               FREQUENTLY ASKED QUESTIONS ABOUT THE
                                  STUDENT LOAN INTEREST DEDUCTION
1. Are there income restrictions for taking the deduction?

     Yes. If your modified adjusted gross income is greater than $55,000 ($75,000 if you are married and filing
     jointly), you are not eligible to take the deduction. For an explanation of modified adjusted gross income,
     refer to IRS publication 970.

     If your modified adjusted gross income is more than $40,000 ($60,000 if you are married and filing jointly),
     your deduction may be limited based on your income. The amount of the deduction is gradually reduced if
     your modified adjusted gross income is between $40,000 and $55,000 (between $60,000 and $65,000 if
     you are married and filing jointly).

2. Do I have to itemize deductions in order to claim the student loan interest deduction?

     No. If you are otherwise eligible, you can claim this deduction whether or not you itemize other deductions.

3. If I am already in repayment, am I eligible to take the student loan interest deduction?

     Yes. If you are otherwise eligible, you may deduct the student loan interest payments made on or after
     January 1, 1998, provided that your loan is still in the first 60 months of repayment.

4. How will I know whether my loan is still in the first 60 months of repayment?

     Based on available information, EFG Technologies has calculated the 60-month period for each of your
     loans. EFG Technologies has adjusted the 60-month calculation to exclude periods of grace, deferment,
     and forbearance pursuant to IRS guidance.

5. I received two Form 1098-Es from EFG Technologies. Why?

     If you received more than one Form 1098-E, you have paid eligible interest on loans at another institution
     that contracts with EFG Technologies. You also may receive Form 1098-E from other companies or
     lenders, who service other student loans you may have.

6. Will the information on Form 1098-E be reported to the IRS?

     If the amount of interest reported on the enclosed Form 1098-E is $600 or more, then EFG Technologies is
     required to report the information to the IRS. Although amounts less than $600 will not be reported to the
     IRS, you may still deduct those amounts if you are otherwise eligible.

7.   How do I find out more about the student loan interest deduction and other requirements or
     conditions that may apply to me?

     As always, you should contact your tax advisor for guidance. However, you can obtain complete
     information about this deduction in IRS publication 970, “Tax Benefits for Higher Education.” This
     publication is available from your local IRS office and may also be downloaded from the IRS web site. The
     U. S. Department of Education’s web site also provides some information about this deduction. Listed
     below are the addresses of these two web sites:

      http://www.irs.ustreas.gov/                         http://www.ed.gov/
      The Internal Revenue Service’s web site             The U. S. Department of Education’s web site
            First Quarter Customer Anniversaries for 2001
            35 Years                                 20 Years
          Brevard College                   St. Josephs College (ME)

                                                    15 Years
             30 Years                       Davis and Elkins College
      Armstrong State College           Montana State University-Northern
        Connecticut College              Saginaw Valley State University
          Emerson College                     Southeastern College
      Florida Southern College               University of Montana
            Iona College
      Sistema Ana G. Mendez                          10 Years
                                           California Culinary Academy

              25 Years                             5 Years
      Drake Business School                 ITT Educational Services
Teachers College, Columbia University     New England Culinary Institute
     Virginia Wesleyan College                   Walsh College
                                         EFG Technologies Update
                                          Index for 2000 Issues

          Audit                               Directory of Low-Income Schools               How To
                                              (Feb., p. 3)
Audit Report Available (Sept., p.6)           Directory of Postsecondary
Attachment: Audit Report Request              Education Programs Published          Benefit from Using DataLink (June)
Form                                          (Nov., p.3)                           Complete a Payment Transmittal
Audit Report Available in August              Draft Cohort Default Rate Guide       (Nov.)
(July, p.7)                                   Now Available (Nov., p.4)             Keep Borrower Address Information
Annual Third-Party Compliance                 Draft FAFSA Form/Instructions         Current (Feb.)
Audit is Underway (May, p.6)                  Published (Sept., p.2)                Process a Loan Rehabilitation (May)
Third Party Audit a Success! (Aug.,           ED Clarifies FISAP Installation       Process New Loans and Advances
p.6) Attachment: Audit Report                 Problem (Sept., p.4)                  (Aug.)
Request Form                                  ED Invites Comments on the 2002-      Process Unpostable New Loans and
                                              2003 FAFSA (Dec., p.3)                Advances (Oct.)
Customer Anniversaries                        FERPA’s Final Rule Published (July,   Register for WebConnect and
                                              p.2)                                  DocumentDirect (Jan.)
Recognition of our Long-term                  FISAP Import Edit Report              Stay Connected (July)
                                                                                                    sm
Customers (Jan., p.6; Apr., p.8, July,        Incorrectly Flagging Perkins Data     Use DataStream (Apr.)
p.8, Oct., p.5) Attachment: Long-             (Dec., p.3)                           Use Document Direct (March)
term Customers’ Anniversaries                 Final Notification for Campus-Based   Use the PREQ Screen (Sept.)
Still Happy After All These Years             Programs (July, p.5)
(Dec., p.5) Attachment: Long-term             Important Dates for FWS, FSEOG,
                                                                                     inside EFG - Profiles
Customer Recognition                          and Perkins Program (July, p.5)
                                              Language Corrected in a Dear          Bass, Daisy (Nov.)
                                              Partner Letter (Sept., p.4)           Beauchamp, Anna (March)
       Cutoff Dates                           Modernization Blueprint Posted        Blackburn, Ronye (Oct.)
                                              (Apr., p.3)                           Fallin, Debbie (Jan.)
Cutoff Dates for Year 2001 (Sept.,
                                              Monitoring and Resolving Defaults     Little, Lando (Dec.)
p.10; Dec., p.7)
                                              and Overpayments (Nov., p.3)
February/March (Jan., p.7)                                                          Miller, Anne-Marie (Sept.)
                                              National Student Loan Default Rate
March/April (Feb., p.10)                                                            Riddle, Kathy (July)
                                              Lowest Ever (Oct., p.2)
April/May (March, p.8)                                                              Roberson, Bennette (Feb.)
                                              New Audit Guide Published (Apr.,
May/June (Apr., p.10)                         p.3)                                  Smith, Brenda (June)
June/July (May, p.12)                         New Training Program (SFA             Todd, William (Apr.)
July/August (June, p.10)                      COACH) (March, p.3)                   Tuttle, Janet (Aug.)
Aug/Sept (July, p.10)                         Ombudsman’s Office (March, p.3)       Williams, Jim (May)
Sept/Oct (Aug., p.10)                         Attachment: Ombudsman
Oct/Nov (Sept., p.9)                          Notification Information                 Legislative Updates
Nov/Dec (Oct., p.6)                           Ordering SFA Publications(July,p.5)
Dec/Jan (Nov., p.6)                           Perkins Promissory Note Addendum      Budget Impasse Puts Education
                                              (March, p.2)                          Funding at Risk (Dec., p.1)
Department of Education                       Perkins Service Cancellations         Congress Accepts FY 2001 Budget
                                              Reimbursement and Payment Letters     Plan (Apr., p.1) Attachment: CEF’s
2001-2002 Electronic Data Exchange            (June, p.2)                           Five Simple Steps to Support
Technical Reference Available (Dec.,          Proprietary Institutions Have New     Education Funding
p.2)                                          Liaison (Apr., p.3)                   Congress Reconvenes (Sept., p.2)
Additional Service to Provide                 Public Defenders and Perkins Loan     Education Savings Account Bill
Addendum to Borrowers is Available            Cancellations (Oct., p.2)             Approved (Apr., p.2)
(July, p.6) Attachment: Notification          Repayment Authority Announced
                                                                                    Final Budget Resolution Reached
to Borrowers and Promissory Note              (July, p.4)
                                                                                    (May, p.1)
Addendum                                      Statistics Published (Sept., p.4)
                                              Summary of Recent Publications        Fiscal Year 2001 Budget (March,
Advance Notice of Electronic
                                              (Jan., p.2, Feb., p.4)                p.1)
Processes Specifications Deadlines
                                                                                    House Passes New Teacher Student
(Dec., p.2)
Campus-Based Funding Levels                                                         Loan Forgiveness Bill (Oct., p.1)
                                                        HHS                         Perkins Funding (Jan., p.1)
(Apr., p.2)
Changes to 2001-02 Application                                                      President Unveils Major Education
Processing System Announced (Dec.,           Federal Poverty Guidelines for 1999    Initiatives (Feb., p.1)
p.2)                                          (March, p.5)                          Senate Passes Education Funding
Direct Consolidation Training                Updating Race/Ethnicity Codes (Aug.,   Bill (July, p.2)
(March, p.4)                                  p.7)
         Miscellaneous                 Year 2000 Holiday Schedule and        FTC Provides Final Rule on Privacy
                                       Cutoff Dates                          (June, p.1)
Anne-Marie Miller Announces                                                  Final Rules Published November 1
Retirement (May, p.5)                           NSLDS                        (Nov., p.1) Attachment: Final
Anne-Marie Miller to Retire                                                  Regulations
October 31 (Sept., p.1)                Enhancements to NSLDS Reporting       HBCU’s Cohort Default Rate (Feb.,
Another Successful Disaster            Pending (June, p.4)                   p.7) Attachment: Letter from
Recovery Test (July, p.8)              NSLDS – Y2K Testing (Jan., p.1)       Secretary Riley
Application for Forbearance (Jan.,     NSLDS Error Reduction Effort          HBCU Customer Speaks Out about
p.3)                                   (Apr., p.6) Attachment: NSLDS         Innovation (Feb., p.8) Attachment:
Annual Statements to be Sent in        Update March 20, 2000                 “EFG Technologies – Better Service
February (Jan., p.3) Attachment:       NSLDS Partnership is Successful       Through Innovation”
                                       (Oct., p.3)                           HBCU Update (March, p.4)
Expanded Deferment and
                                       NSLDS Workshops Offered (Apr.,        IRS/ED Skiptracing Program (May,
Cancellation Provisions
                                       p.4)                                  p.4)
Change in ACH Transfers (Feb.,
                                                                             Last Chance to Sign Up for Prom
p.5)                                   New Customers –Welcome!               Note Addendum Service (Aug., p.6)
Clarification on Accelerating a
                                                                             Low Income Levels Published for
Cancelled Loan (May, p.8)              EFG Technologies Welcomes Grand       HPSL and NSL Programs (June, p.2)
Clarification of Consolidation         View College (Feb., p.1)              Negotiated Rulemaking 2000 – A
Payment Procedures (May, p.8)                                                Tumultuous Beginning (Feb., p.3)
Collection Agency Interface (Feb.,                                           New Hardware Standard
p.8) Attachment: Electronic                  New Products                    Requirements Announced (Aug., p.4)
Interface for Collection Agencies                                            New Promissory Note Addendum
                                                  SM
Correction to Security Update          DataStream CD-ROM Helps               Issued (May, p.2)
(Sept., p.7)                           Eliminate Microfiche (March, p.6)     New Technical Amendments
ECS to Remain Open (Nov., p.4)         DocumentDirect and DataStream –       Proposed (May, p.2)
EFG Technologies’ Affiliation with     A Winning Combination (May, p.9)      NPRM Deadline Approaching (Oct.,
AMS (Dec., p.4) Attachment:            Documentation Available for           p.2)
                                                    SM
Affiliation Letter                     DataStream CD-ROM and                 NPRM Responses Due in September
EFG Technologies Joins the             DocumentDirect On-Line Reports        (Aug., p.2)
American Collectors Association        (Apr., p.7)                           Optional Service Available to
                                                                      SM
(Apr., p.8)                            Increased Use of DataStream CD-       Provide Borrowers with Addendum
Enhancement to New                     ROM Helps Eliminate Microfiche        (June, p.5) Attachment: DRAFT
Loans/Advances Report (March,          (Feb., p.6)                           Notification to Borrowers and
p.6)                                   No More Paper, No More books (of      Promissory Note Addendum
Ford Loan Consolidation Payments       reports, that is) … (May, p.9)        Our Plan Regarding Regulatory
to be Received Electronically (Dec.,   Upgrade to WebConnect Scheduled       Change (Nov., p.3)
p.4)                                   for End of July (July, p.7)           Procedures for Liquidating Your
GASB Update: Guidelines Revised                                              Portfolio (May, p.4)
                                       WebConnect Upgrade Completed
for Basic Financial Statements         (Sept., p.6)                          Prom Note Addendums Mailed
(Aug., p.8)                                                                  (Sept., p.6)
Holidays in 2001 (Dec., p.7)              Regulatory Updates                 Proposed Rule on Privacy (March,
                                                                             p.2)
InsurData becomes HealthAxis.com
                                                                             Proposed Rules for TRA Reporting
(Jan., p.7)                            2001-2002 ISIR Layout Draft
                                                                             (June, p.3)
Partial 2000 Index (July, p.8)         Available (Aug., p.1)
                                                                             Responses to Proposed Regulations
Attachment: 2000 Index for the         Change to the GI Bill (May, p.5)
                                                                             (Sept., p.3)
EFG Technologies Update                Changes for the June 2000 ARO
                                                                             Responses to the Proposed Rule on
Introducing our New Customer           (May, p.3)
                                                                             Privacy (Apr., p.3)
Service Director (Nov., p.1)           Changes to Perkins Loan Family
                                                                             Safeguard Procedures Report Update
Security: Your Passwords and IDs       Income Code (June, p.6)
                                                                             (Aug., p.3)
are Protected (Aug., p.8)              Closeout of the Work-Study, Perkins
                                                                             Student Loan Consolidations (June,
                                       and FSEOG Programs (May, p.4)
Successful Testing (Disaster                                                 p.3)
                                       Conforming Changes Made to FISAP
Recovery) (Feb., p.7)                                                        Technical Amendments Pending
                                       Report (June, p.7)
Training and Development Focus                                               (Feb., p.2)
                                       Date Correction for Technical
Leads to Superior Service (June,                                             Use NSLDS to Monitor Financial
                                       Amendments (May, p.4)
p.6)                                                                         Aid History (Aug., p.3)
                                       Deadline Extended for PCL Annual
“When was that article in the          Operating Report (Aug., p.1)
Update?” (Jan., p.5) Attachment:                                              Rehabilitation Updates
                                       Default Reduction Plan –
Index of 1999 issues of EFG            Clarification (Jan., p.2)
Technologies Update                                                          Enhancements to System III in
                                       ED Verifies FISAP Problem (Aug.,
Year 2000 Holiday Schedule and                                               Testing (June, p.4)
                                       p.2)
Cutoff Dates (Jan., p.7) Attachment:                                         Implementation of Rehabilitation
                                       FISAP Update (July, p.4)
Provisions (March, p.4)                 (Aug., p.7)                             Indicators; Inactive IDs; System III
Judgment Loans Reported to Credit       Return Item Charge Reminder             Availability (March)
Bureaus (Aug., p.5)                     (June, p.8)
Masterfile Changes for Rehabilitation   Student Loan Interest Reporting to                  TRA
(Aug., p.4)                             Occur in January (Dec., p.4)
Masterfile Enhancements in Process                                              Form 1098-Es Mailed (Jan., p.4)
(Sept., p.5)                                      Services                      Attachment: TRA Documents (4)
NSLDS Reporting Still Pending                                                   Student Loan Interest Reporting a
(July, p.6)                                                                     Success (Feb., p.7)
                                        Deferment Information Now
New Rehab Monitoring Report and                                                 Time to Prepare for Tax Reporting
                                        Available on the Web (Aug., p.8,
Description (June, p.5) Attachment:                                             (Oct., p.3)
                                        Sept., p.7)
DRAFT Rehabilitation Monitoring
Report                                  EFG Technologies Services a
                                        Variety of Institutional Loans (Jan.,   Workshops/Regional Meetings
New Rehabilitation QuikLetters and
Fact Sheet (May, p.6) Attachment:       p.4)                                    Additional Workshops Planned
Rehabilitation QuikLetters and          Exit Packages Now Available in          (March, p.7)
Federal Perkins Loan Program Fact       Alpha Order (May, p.6)                  Atlanta Regional Meeting (Dec.,
Sheet                                   Forms on the Web (March, p.6)           p.6)
Notification to Borrowers in            Gearing up for Exit Interview           Back by Popular Demand (Winston-
Collection (May, p.6; June, p.4)        Season (Feb., p.6)                      Salem Workshops) (Jan., p.5, Feb.,
Attachment: Notification Letter for     Get Up-to-Date Forms on the Web         p.9) Attachment: Workshop
Borrowers in Collection (May)           (May, p.7)                              Registration Form
Rehabilitation Enhancements             Help Us Save a Tree—Use                 CCULAA Conference (May, p.11)
Complete (Oct., p.3)                    DocumentDirect (Sept., p.6)             COHEAO/HHS Conference (Feb.,
Rehabilitation Notification to          Installation of New IVR and Call-
Borrowers in Collection (Aug., p.4)                                             p.9)
                                        Routing Software Complete (Jan.,        COHEAO Mid-Year Meeting (Feb.,
Rehabilitation Reports (Aug., p.4)      p.4)
Rehabilitation Submittal Form (July,                                            p.9, March, p.8, Apr., p.9, May,
                                        Introducing the Payment Request         p.11, June, p.9, July, p.9)
p.6) Attachment: Rehabilitation         Screen (Sept., p.5)
Submittal Form                                                                  EARMA Collections Conference
                                        Lockbox Provides Efficient              (Jan., p.6, Feb., p.9)
Reports Available Next Month (July,
                                        Payment Processing (Oct., p.4)          EARMA Collections Conference a
p.6)
Report Enhancements Implemented         Order Your Copy of the New Fed          Success (Apr., p.8)
(Sept., p.5)                            Regs Manual Now (March, p.5)            Hosts Needed for 2001 Regional
System III Enhancements, Borrower       Attachment: Federal Regulations         Meetings (Nov., p.5; Dec., p.5)
Notifications, Borrowers in             Manual Request Form and Sample          New York Regional Meeting a
Collection (Apr., p.4) Attachment:      Obtain your Forms From the Web          Success (Nov., p.5)
Borrower Notification Information       (Apr., p.7)
                                                                                PDG Bursar’s Conference (Feb.,
System III Enhancements for             Read the Update on the Web (Apr.,
                                                                                p.9, March, p.8)
Rehabilitation Tracking (July, p.5)     p.7)
                                                                                Regional Meetings Planned (Sept.,
                                        Return Item Charges (May, p.7)
                                                                                p.8, Oct., p.5)
        Reminders                       Attachment: Returned Item Charge
                                                                                Regional Meetings Scheduled (Jan.,
                                        Authorization Form
                                                                                p.6, Feb., p.9, March, p.7, Apr., p.9)
Change in ACH Transfers (March,         Student Loan Interest Reporting
                                                                                Regional Meetings Continue (May,
p.6)                                    Service Available (Nov., p.4)
                                                                                p.10)
Consolidation Payment Processing        Updated Federal Regulations
                                        Manual Now Available (Feb., p.5)        Regional Meetings Update (June,
Procedures Reminder (June, p.8)
                                        Attachment: Federal Regulations         p.8, July, p.9, Aug., p.9)
Countdown to Fiscal Year-end
                                        Manual Request Form                     September Workshop Results in
Continues (May, p.11)
                                                                                Success (Oct., p.5)
Fiscal year End a Success! (July,
                                        System IIISM Connection                 Upcoming Conferences (Aug., p.10,
p.1)
                                                                                Sept., p.8, Oct., p.5, Nov., p.6, Dec.,
Fiscal Year End is Approaching
                                        Introducing the New Payment             p.6)
(Apr., p.6)
                                        Request Screen (PREQ); System III       Winston-Salem Workshops are a Hit
Happy Customer Service Week!
                                        Availability (Sept.)                    (Apr., p.8) Attachment: On-Line
(Sept., p.1)                            New Loan Rehabilitation Fields;         Workshop Registration Form
Have you Ordered Your Copy of the       Rehabilitation Flag; Consecutive        Workshops Available (May, p.10,
New Fed Regs Manual? (Apr., p.4)        Payment Counter; New QuikLetters        June, p.8, July, p.9, Aug., p.9)
New Federal Regulations Manual          Added; Updated On-Line Processing       Attachment: Workshop Registration
Still Available (May, p.5)              Manual Available; System III            Form
Place Your Order Now for the            Availability (June)
Federal Regulations Manual (July,       Payment Request Screen; Updating
p.8)                                    NSLDS Fields On-Line; System III
Prepare Early for the Fall Peak         Availability (Dec.)
Period (New Loans and Advances)         Special Billing on MAIN; Cohort
                                      REGISTRATION FORM

                       Service Overview & On-Line Workshops
                                Winston-Salem, NC
                          March 26-28 & March 29-30, 2001
____________________________________________________________________________

____________________________________________________________________________
                                                INSTITUTION NAME & ADDRESS



         NAME

         TITLE                                                                                      TELEPHONE

         E-MAIL ADDRESS
                                                      Sessions Attending
              $75 Service Overview - 3/26-28                                          $65 On-Line - 3/29-30



         NAME

         TITLE                                                                                      TELEPHONE

         E-MAIL ADDRESS
                                                      Sessions Attending
              $75 Service Overview - 3/26-28                                          $65 On-Line - 3/29-30



         NAME

         TITLE                                                                                      TELEPHONE

         E-MAIL ADDRESS
                                                      Sessions Attending
              $75 Service Overview - 3/26-28                                          $65 On-Line - 3/29-30


                                     Registration Deadline: March 9, 2001
After receiving your registration form, we will send you a confirmation, hotel and workshop locations, directions and program
information. We cannot guarantee a refund of fees for registrations made less than 14 days before the workshop or
cancellations made less than five business days from the workshop.

         Registration fee enclosed                                Registration fee mailed separately to address below

Signature X


 School Relations Assistant                                                              Questions? (800) 458-4492,
 EFG Technologies                                                                                     Ext. 2280
 P.O. Box 3176                                                                           Fax: (336) 607-2025
 Winston-Salem, NC 27102-3176
                                          Welcome to EFG Technologies’
             e                                        Service Overview &
       Servic                                         On-line Processing
                                                                                              On
                                                                                           Pro -Line
              w
       Overvie                                                                                c
                                                                                           Wo essin
                                                      Workshops
               p
       Worksho                                                                               rks    g
                                                                                                hop


                  Get the most out of our services!
       When:                  Service Overview Workshop, March 26-28, 2001
                              On-Line Processing Workshop, March 29-30, 2001

       Where:                 Ramada Plaza Hotel
                              3050 University Parkway
                              Winston-Salem, NC 27102

       Fees:                  Service Overview, $75 per person for three days
                              On-Line Processing, $65 per person for two days

       Provided:              Service Overview Manual
                              On-Line Processing Manual
                              Morning and afternoon snacks

       Lodging:               Ramada Plaza Hotel
                              (336) 723-2911
                              $74 per night + tax
                              (Be sure to mention EFG Technologies.)

               All registration fees are per person. EFG Technologies cannot guarantee a refund of registration
               fees for any cancellations made after March 9, 2001. Late registrations received after March 9,
               2001 will be charged a late registration fee of $10 per person. Registrations received in the final
               week before the workshop will be accepted based on available space.




1/01
                                                                     Process a Loan Rehabilitation
                                                                    Loan rehabilitation for Perkins loan borrowers
                                                                    became available on July 1, 2000. Now borrowers
                                                                    who request the opportunity to rehabilitate their loans
                                                                    must be granted that option. To successfully rehabili-
                                                                    tate a defaulted loan, a borrower must make 12
                                                                    consecutive, on-time monthly payments in the amount
                                                                    agreed to by the borrower and the lending institution.

     When a borrower requests loan rehabilitation and agrees to a monthly payment amount, send us this information so we
     can record it in our system. System IIISM tracks the borrower’s rehabilitation success or failure by using the “Special
     Billing” transaction as a tracking tool. In order to input the rehabilitation agreement in our system, you must provide us
     with the following information:

              •   the amount of the monthly rehabilitation payment;
              •   the existence of a written agreement with the borrower;
              •   the number of days a payment may be past due without voiding the
                  rehabilitation agreement (no more than 15 days is recommended);
              •   the 12 month rehabilitation period that you and your borrower agreed
                  upon; and
              •   the installment amount and frequency that the borrower should be billed
                  following a successful rehabilitation.

     After we receive this information, we will update System III with the appropriate rehabilitation flag and special billing
     information. We will record the post-rehabilitation billing requirements in the loan history for use after a successful
     rehabilitation and mail a QuikLetter to the borrower to confirm the processing of the rehabilitation. If you are a
     DataLinkSM customer, you may enter this information on-line on the MAIN and LN5 screens.

     If the rehabilitation agreement is between your collection agency and the borrower, the collection agency
     should monitor the success or failure of the rehabilitation. Notify us of the existence of this agreement, so we
     can input the appropriate rehabilitation flag, which appears on the monthly reports sent to the collection agency. Since
     the collection agency monitors the receipt of payments to determine success or failure, special billing transactions
     should not be entered on System III. Delays in processing payments received by collection agencies on System III
     make it impossible for rehabilitation tracking to be accurate and efficient on System III.

                     Below are some of the most frequently asked questions about rehabilitation.

     What is an on-time, consecutive monthly payment?
     On-time, consecutive monthly payments must meet the following requirements:

              •   the payment (transaction) date is not more than 20 days prior to the due date;
              •   the payment (transaction) date is not more than 15 days after the due date;
              •   the payment frequency is monthly;
              •   the payment amount is equal to or greater than the amount billed (for that specific month); and
              •   the payment is voluntary (not a tax offset or judgment payment).

                                      Questions about Rehabilitation?
                                Call your Customer Service Representative.
01-1 EFG Technologies Update                                                                                    Continued on other side
What if the borrower is already making regular monthly payments prior to requesting rehabilitation?
We interpret regulations to indicate that payments made by the borrower prior to the actual request for rehabilitation should
count toward the requirement of twelve. Of course, these payments would have to meet the criteria stated on the previous
page. For example, if three payments have been received that met the criteria to count as on-time, consecutive monthly
payments, the next on-time, consecutive monthly payment received will count as the fourth payment. At least one pay-
ment must have been made on or after July 1, 2000.

How does EFG Technologies identify borrowers in rehabilitation?
These borrowers are identified by a “rehabilitation” flag on System III. This is a one-digit field that is displayed on the
LN5 screen. Values for this field include:

                                                                                                      R
                                                                                                  S PV
         •   P – loan pending rehabilitation;
         •   R – 12th payment received/loan rehabilitation completed (this month);
         •   S – rehabilitation report sent to credit bureau*;
         •   U – rehabilitation attempt unsuccessful (payment missed or late); and                U
         •   V – rehabilitation voided by subsequent default.

  *A rehabilitation flag of “S” is updated by System III in the month following the actual completion of the rehabilitation.
   The rehabilitation flag value of “R” prompts the removal of negative infomation from the credit bureau. Once
   the request is sent to the credit bureau, the rehabilitation flag is updated to “S” to indicate the notice of
   completed rehabilitation has been sent to the credit bureaus. The flag will remain “S” for the remainder of the loan
   repayment period unless the borrower subsequently defaults.

How is the rehabilitation agreement recorded on System III?
Since most rehabilitation agreements contain specific requirements related to the monthly payment amount, these agree-
ments are entered on System III as “special billing” agreements. System III’s special billing transaction will also aid in the
tracking of delinquent payments during the special billing/rehabilitation period. A “consecutive payment counter” allows
payments to be up to 15 days late and still be counted as on-time. Also, our internal procedures require that we indicate
how many days a special billing payment may be past due before the loan is removed from special billing (i.e., 15 days past
due on a “special billing” bill). If you want stricter requirements related to delinquency, you may choose to have the
special billing terminated at a “number of days past-due less than 15.” When the special billing is terminated, the rehabilita-
tion flag will automatically change to “U” - attempt unsuccessful.

What happens if the borrower is late with a payment?
As stated in the answer above, if the borrower’s payment is not received within the allowable number of special
billing days past due, System III automatically removes (drops) the loan from special billing status. The special
billing drop transaction will change the rehabilitation flag to “U,” indicating the rehabilitation attempt was unsuc-
cessful. The consecutive payment counter will also be reset to zero indicating that the payment was missed.           Pa
                                                                                                                        st
                                                                                                                           Du
                                                                                                                        U    e
What will appear on the borrowers credit report when the loan has been rehabilitated?
We will submit a request to credit bureaus to delete the existing loan record at the end of the calendar month in which the
borrower’s 12th payment was received. The rehabilitation flag will be set to “S” to indicate that the rehabilitation has been
reported to the credit bureau. We will resume reporting the loan the following month as if it were a new loan. The
rehabilitation flag will remain “S” for the remainder of the repayment term unless the borrower returns to a default status,
which will void the rehabilitation.
                                                                                             th
What happens to amounts that remain past due on the borrower’s loan after the 12 payment is received?
In order to comply with regulatory requirements to return the borrower to “regular payment status”, we will:

         •   remove all past due amounts (customer adjustment type Y);
         •   reschedule the loan as necessary, based on the agreement between the school and the borrower; and
         •   extend the repayment term (if necessary) to allow the borrower the full nine years of post-rehabilitation
             repayment term.
01-1 EFG Technologies Update
          Inside
          EFG Technologies                                                               Debra Adams


                                  Growing with the Job
              When Debra Adams began working with student         Debra Adams:
   loans in August 1977, she had no idea where her career
   path would lead. She had just graduated from high              “I enjoy sharing
   school two months before and was assigned to the mail          some of the things
   room. Most of the technology that she manages today            I have been
   as Call Center Specialist had not even been dreamed of         through. I want
   24 years ago.                                                  them (employees)
              From manually processing returned checks and        to understand not
   using carbon paper, Debra has grown with the company           only how to do the
   and has responded to the demands of new technology.            job, but also the
   She has worked in almost every department, with each           why behind it.”
   position bringing additional responsibilities and requiring
   her to learn new skills. Today she oversees a critical
   part of the Call Center’s technology, the Interactive Voice
   Response (IVR) system.
              The IVR is a key part of any call center and is
   critical to operations in borrower services. When borrow-
                                                                 dressing their concerns. I want to give them confidence
   ers reach our Call Center, their calls are answered by an
                                                                 that their problem will be resolved quickly.” If Debra
   automated system. They are asked to input their loan
                                                                 cannot resolve a problem immediately, she carefully
   number, which allows the system to recognize the
                                                                 explains what she is going to do next. Years of
   condition of their loan and routes them to the appropriate
                                                                 experience has taught her that following up with
   account service representative. Borrowers with past due
                                                                 customers as promised is a key element in diffusing
   amounts or loans in collections are channeled to the
                                                                 conflict and avoiding misunderstandings.
   most experienced representative available. Several new
                                                                           Her favorite quote is from a Nike ad, “Do it
   planned upgrades, including “screen pops,” will allow
                                                                 right.” To that she adds “the first time.” “If employees
   representatives to immediately see the accounts of
                                                                 can do it right the first time, it saves time and reduces
   callers when they answer the phones and will eventually
                                                                 frustration.” In order to do that, the telephone system
   allow them to see the accounts of callers in the queues.
                                                                 must be user-friendly, and employees must receive
              As Call Center Specialist, Debra is responsible
                                                                 training and inspiration. Debra is up to meeting all
   for writing the programs for the IVR. Because of her
                                                                 those challenges. Not only does she focus her work
   knowledge of loan servicing and the technical aspects of
                                                                 on upgrading the IVR, but she also coaches and gives
   the IVR, she is uniquely qualified to act as a liaison
                                                                 Call Center employees information to help them do
   between the customer service, data center operations,
                                                                 their jobs. “I enjoy sharing some of the things I have
   product development, and information technology units.
                                                                 been through. I want them to understand not only how
              Debra is very excited about this opportunity for
                                                                 to do the job, but also the why behind it.”
   growth within the organization. One of her proudest
                                                                           Debra doesn’t limit her enthusiasm for
   accomplishments is having the opportunity to learn and
                                                                 mentoring to her job. She also volunteers regularly at
   grow—again and again. She has constantly met those
                                                                 North Forsyth High School, her alma mater and where
   challenges and is pleased that the company is confident
                                                                 her son, Brandon, is in 10th grade. She works regularly
   that she can handle new assignments. “With every
                                                                 with a group a students called the VIPs to help moti-
   opportunity, I have been asked to learn something new.
                                                                 vate and encourage them to succeed. Debra and
   We are all asked to learn something new everyday. I
                                                                 Mike, her husband of 23 years, spend most of their free
   don’t want to let any opportunities go by.”
                                                                 time attending Brandon’s baseball games and partici-
              Although her current position is moving her away
                                                                 pating in other family activities, such as camping.
   from direct customer contact, customer service remains
                                                                           As an example of Debra’s commitment to
   one of her top priorities. She is proud of her ability to
                                                                 never missing an opportunity and going the extra mile,
   relate to customers and help them resolve their prob-
                                                                 Debra takes her son Brandon to high school every
   lems. “I have been able to help customers and borrow-
                                                                 morning. Why does she do that when the school bus
   ers with almost every problem they have presented. I
                                                                 goes by her home each morning? “ I know he will be
   have accomplished this by listening patiently to their
                                                                 driving himself to school soon, and I don’t want to let
   needs with a smile on my face and energetically ad-
                                                                 this chance to spend time with him go by.”
01-1 EFG Technologies Update

								
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