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Direct Loan Servicing - Welcome NYSFAAA

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Direct Loan Servicing - Welcome NYSFAAA Powered By Docstoc
					          Direct Loan Servicing -
           Working with Schools

Presenters:
•Jim McMahon and Craig Rorie (USED)
•Suzi Woodring (Nelnet)

                        November 2009
                                                  Agenda
 Direct Loan Servicing
     Facts and Figures
     Direct Loan Servicing – Borrower Services
     Direct Loan Servicing – School Services
           School Reports
           Delinquency & Default Prevention

 Direct Loan Transition - School Support

 Servicing “Tomorrow”
     A Changing Landscape in FSA
          Loan Participation and Purchase
          100% Direct Lending
     Additional Servicers
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                                      Portfolio Statistics
                       William D Ford Direct Loan Program (Direct Loans)


                Total Direct Loan Borrowers                 7.8 Million Active Borrowers
    8,000,000
                                                           Status                      Population
    7,000,000

    6,000,000                                              In School                        2,072,844
    5,000,000
                                                           In Grace                            451,706
    4,000,000

    3,000,000
                                                           * In Repayment                   4,057,910
    2,000,000                                              In Deferment                        968,478
    1,000,000
                                                           In Forbearance                      560,242
           0
                2004    2005   2006   2007   2008   2009
                                                            * Number Includes delinquent borrowers
                                                                        Statistics as of July 2009 month end.




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    Direct Loan Servicing Web Sites
          For Borrowers - www.dl.ed.gov

          •   Real Time Account Information
          •   Online Transaction Processing - Borrower Self-Service
          •   Online Counseling and Rules Based Messaging
          •   Interactive Pre-qualifier for Deferment and Forbearance
              Requests including online submission with eSignatures
          •   Online payments
          •   Electronic Mail Services
          •   EDA Enrollment
          •   Online Calculators
          •   Online Surveys

          For Schools - www.dl.ed.gov/schools

          •   Student Account Lookup
          •   Online Reports – Portfolio, Delinquency and Counseling
          •   Complete Question Center



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                                Direct Loan Servicing
                           Borrower Repayment Tools
• Repayment incentive
• Repayment options tailored to individual need
     Standard, Extended, Graduated, Income Contingent,
      Income-Based Repayment, Alternative Repayment
• Public Service Forgiveness Program
• Payment due date selection by borrower
• Options for receiving bills and/or correspondence
  electronically
• Flexible Payment options (EDA and on-line)
• Self-Service tools for borrowers
• (telephone voice response system, Web portals)
• Online form submission with electronic PIN signatures
  (forbearance, deferments, EDA, FAFSA)
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                                    Direct Loan Servicing
                                          School Reports
     What types of Reports:
      – Entrance counseling
      – Exit counseling
      – Delinquency
      – Portfolio
     When:
      – as needed daily, weekly, monthly
     Where:
      – SAIG mailbox, email, DL servicing website
     Why:
      – to monitor borrower activity at DL servicing
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     School Web Site
    Homepage – dl.ed.gov/schools




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    School Web Site
       Welcome Page




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                          School Web Site
                            Student Account Lookup




    Click here to see Repayment Estimates




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                                  School Web Site
                                                Reports
School Reports Entrance Counseling

 Plus Entrance Counseling By Date
 •   The Entrance Counseling by Date report enables Financial Aid Officers / other authorized school staff to
     search within a given date range and view a listing of students that have completed Online Entrance
     Counseling while attending their institution.

 Stafford Entrance Counseling By Date
 •   The Entrance Counseling by Date report enables Financial Aid Officers / other authorized school staff to
     search within a given date range and view a listing of students that have completed Online Entrance
     Counseling while attending their institution.

 Plus Entrance Counseling By SSN
 •   The Entrance Counseling by SSN report enables Financial Aid Officers or other authorized school staff to
     search by SSN and determine whether a given borrower has completed Online Entrance Counseling.

 Stafford Entrance Counseling By SSN
 •   The Entrance Counseling by SSN report enables Financial Aid Officers or other authorized school staff to
     search by SSN and determine whether a given borrower has completed Online Entrance Counseling.




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                                  School Web Site
                                               Reports

School Reports: Exit Counseling

     Detailed Exit Counseling by Date
         •    The Detailed Exit Counseling by Date report enables Financial Aid Officers or other
              authorized school staff to search within a given date range and view details of students
              that have completed Online Exit Counseling while attending their institution.

     Exit Counseling by SSN
          •  The Exit Counseling by SSN report enables Financial Aid Officers or other authorized
             school staff to search by SSN and determine whether a given borrower has completed
             Online Exit Counseling.

     Exit Counseling by Date
          •  The Exit Counseling by Date report enables Financial Aid Officers or other authorized
             school staff to search within a given date range and view a listing of students that have
             completed Online Exit Counseling while attending their institution.




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                                   School Web Site
                                                 Reports
School Reports: Portfolio

 Borrowers by Payment Method
 •  The Borrowers by Payment Method Report displays a count of the number of Stafford and PLUS
    borrowers repaying their loans by each available payment method. It further displays a loan count,
    broken down by loan status, for each borrower type.

 Institution Separation Report
 •   The Institution Separation Report enables Financial Aid Officers or authorized school staff to search
     within a given date range and view a listing of students who have separated or will be separating from
     their institution.

 Borrowers by Repayment Plan
 •  The Borrowers by Repayment Plan Report displays a count of the number of Stafford and PLUS
    borrowers repaying their loans by each available repayment plan. It further displays a loan count,
    broken down by loan status, for each borrower type.

 My Portfolio
 •  The My Portfolio Report displays a school's total Original Loan Amount (OLA) and Principal Balance
    Outstanding (PBO) for Stafford and PLUS borrowers. It displays both a borrower and loan count,
    broken down by loan status, for each borrower type.



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                                        School Web Site
                                                      Reports
 School Reports: Delinquency

     Borrower Contact Detail Report
     •  The Borrower Contact Report expands on the Detail Report by providing borrower demographic
        information for all stages of delinquency. The use of this report feature allows your institution to
        create mail merges in order to deliver correspondence.

     Detail Report
     •  The Detail Delinquency Report contains a list of students that attended your institution with Direct
        Loans from the Department of Education that are currently in Delinquent Status.

     Summary Report
     •  The Summary Report provides a count of the Stafford and In-School Consolidation borrowers
        delinquent at the end of the month for the selected Reporting Period(s).

     Borrower History Report
     •  The Borrower History Report displays the history of delinquency for selected borrower(s)

     Late Stage Delinquency Assistance (LSDA) Report
     •   The Late Stage Delinquency Assistance(LSDA) report contains a list of students that attended your
         institution with Direct Loans and are currently 241-360 days delinquent, which can affect your school's
         cohort default rate.

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     School Web Site
        Subscription




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        Delinquency Management and
                  Default Prevention




     Help US … help YOU
        keep borrowers
        out of default!

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         Delinquency Management Approach
     Form a Team                  Have a Plan             Partner with Servicer


 • Team members should                                  • Contact a School
 include : senior school      • Success is achieved     Services team member
 official , representatives   when solid plans are
 from all offices and a       developed and executed    • Utilize the online
 student to help craft
 attention grabbing                                     delinquency tools and
                              • A plan pulls together   reports
 communications               people and resources
 • Create/adopt and           toward a common goal      • Implement a Late Stage
 implement a plan                                       Delinquency Assistance
                              • Customize for your      (LSDA) plan
 • Meet regularly             school

 • Evaluate progress

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     What is the Direct Loan Servicer doing?
     • Educates and informs borrowers as to the tools and
       options available to assist them in the management of
       their student loans

     • Exceeds minimum regulatory due diligence
       requirements

     • Works in partnership with the school community to
       assist borrowers in the later stages of delinquency


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                                       Direct Loans
                    Delinquency & Default Prevention
 • Pre-Repayment Counseling
     Calls made two months prior to entering repayment
     Emails sent to assist with repayment options
 • Delinquency Counseling
     31 days we begin a series of calls (22 calls)
     Letters begin at 7 days delinquent (12)

 • Call Campaigns
     High balance calls (balance of 80K or greater)
     Borrowers who fall within the COHORT population will
      also receive up to 4 manual calling attempts.
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                                            Direct Loans –
                           Delinquency & Default Prevention

                          Late Stage Delinquency Assistance (LSDA)
                            involves school personnel reaching out to
                          seriously delinquent borrowers (240+ days),
                            and facilitating the critical contact with the
                                 loan servicer to prevent loan default.
               Remember…
       We work together to combat
          delinquency. We have
      developed an LSDA guide and
     online tools for schools to assist
          in delinquency efforts.               Direct Loan School Services:
                                                              (888) 877-7658

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     School Web Site
      Delinquency Reports


                                    Summary
                               Delinquency Report

                                Late Stage
                            Delinquency Report




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      Literacy Materials:

     Learn the Basics and
     Manage Your Debt

 On-line ordering at:
       http://edpubs.ed.gov

 Order by phone at:
      1-877-4ED-PUBS




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               Direct Loan School Services
     1-888-877-7658 (School Services)
           www.dl.ed.gov/schools

     •   30-day Demand Letters
     •   Cohort Default Assistance
     •   Delinquency Management Assistance
     •   Exit Counseling Interview Materials
     •   NSLDS/Clearinghouse
     •   SSCR/Student Enrollment
     •   Account Status
     •   Web Assistance
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                                                   Agenda
 Direct Loan Servicing
      Facts and Figures
      Direct Loan Servicing – Borrower Services
      Direct Loan Servicing – School Services
            School Reports
            Delinquency & Default Prevention

 Direct Loan Transition - School Support

 Servicing “Tomorrow”
      A Changing Landscape in FSA
           Loan Participation and Purchase
           100% Direct Lending
      Additional Servicers
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              FSA Support for Schools –
                Direct Loan Transition

     • FSA has developed structure to:
       – Respond quickly to community needs
       – Ensure smooth transition


     • DL Transition Team
       – Multiple sub teams


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             FSA Support for Schools –
               Direct Loan Transition
     • DL Transition team and sub teams will
       manage:
          Planning of communications
          Training plans
          System Capacity development
          Publication updates
          Targeted Outreach
          School Set up requirements and options
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                                                   Agenda
 Direct Loan Servicing
      Facts and Figures
      Direct Loan Servicing – Borrower Services
      Direct Loan Servicing – School Services
            School Reports
            Delinquency & Default Prevention

 Direct Loan Transition - School Support

 Servicing “Tomorrow”
      A Changing Landscape in FSA
           Loan Participation and Purchase
           100% Direct Lending
      Additional Servicers
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                A Changing Landscape
Ensuring Continued Access to Student Loans Act (ECASLA) :


• Provided Secretary with authority to purchase
  FFELP loans:
   – Loan Participation Program
   – Loan Purchase Program (PUT)
   – Conduit                   Current Volumes: (as of 8/30/09)
                                       • $18.7 Billion (purchase)

                                         Approx. 2.6 Million Borrowers
                                                  (purchase)


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             A Changing Landscape

     What is being proposed?

       – 100% Direct Lending

       – A Modernized and Expanded Perkins
         Program – Originated and Serviced
         through the Department


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           Planning for Additional Servicers

      Created an environment of competition to ensure
     student borrowers received best in business service.

      Selected Additional Federal Loan Servicers
        ACS (current servicer)
        Great Lakes Education Loan Services (additional)
        Nelnet (additional)
        Sallie Mae Corporation (additional)
        AES / PHEAA (additional)



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                     Additional Servicers
     • To ensure that the Department of Education could
       handle volumes of loans sold to the government and any
       additional Direct Loan volumes, the Department has
       entered into agreements with four additional servicers.

     • These agreements are for servicing only. Origination
       and disbursement of all Direct Loans will be through the
       Common Origination and Disbursement System (COD).




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              Measuring Performance
     Performance Measurements:

      Service Levels

        Borrowers
        Schools
        Department of Education
        Borrower Defaults

      On –going program compliance reviews

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         Approach:                  Examples of Services:
 • All borrower federally held      • Single Point of Contact for
   loans will be maintained by a      Schools per Servicer
   single servicer                  • Financial literacy materials and
                                      web tools
 • Servicers must comply with all   • Predictive call modeling
   legislative and regulatory          (for delinquency)
   requirements and will provide
                                    • Robust skip tracing tools (for
   unique best in business
                                      delinquency)
   services.
                                    • Web Chat

 • Schools will be working with
   multiple servicers
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                                                                   32
                      What does all this mean for schools?
•    Will schools have to work with        Yes, schools will work with more than one
     multiple servicers?                      loan servicer and will likely interface
                                              with all loan servicers.
•    Can a school designate which
     servicer they want to service their   No, schools cannot designate which
     loan portfolio?                          servicer to service their borrowers.

•    How will a school know which          Schools will use NSLDS to determine
     servicer has their borrowers             which servicer has borrower loans.
     loans?

•    Will schools have a venue for         Yes, schools will have input regarding a
     providing feedback on the                servicers performance via customer
     performance of the servicers?            satisfaction surveys.
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                                                                                 33
     How will the servicers appear in NSLDS?



                                 DEPT of ED/ ACS

                          DEPT of ED/ Sallie Mae




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     How will the servicers appear in NSLDS?



                                DEPT of ED/ FEDLoan
                                 Servicing (PHEAA)


                            DEPT of ED/ NELNET




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     How will the servicers appear in NSLDS?




                DEPT of ED/ Great Lakes




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              Implementation Timeline
          Three-Phase Implementation
               – Phase 1 (Initial) – COMPLETE
               – Phase 2 (Intermediate) – 3/31/10 Completion Date
               – Phase 3 (Final) – 8/31/10 Completion

     Timeline:
     August 31, 2009: (Phase 1) - COMPLETE
          • Additional Servicers fully operational to handle loan sales for Department
     January 15, 2010:
          • Performance evaluation conducted
     March 15, 2010:
          • First Compliance review performed
     March 31, 2010: (Phase 2)
     July 15, 2010:
          • Allocations of new borrower loan volume will be determined (per servicer)
     August 31, 2010: (Phase 3)
          • Additional Servicers fully operational to handle William D Ford Direct Loans

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