Driving Enhancements and Better Student Loan Data

Transcription

1 Driving Enhancements and Better Student Loan Data PESC S STUDENT AID USER GROUP Brian Allison USA Funds Kristi Blabaum Great Lakes/NASLA

2 Student Loan Workgroup Co-Chairs

3 Agenda Brief History of FFELP/FDSLP How does the current process work? Why was the reporting standard needed? Why a flat file and not XML? Description of the reporting standard How does the standard help and what is new with version 2.0? Other areas within student aid that are candidates for standardization The Student Aid User Group

4 Brief History of FFELP/FDLP HEA Signed 11/8/1965 Beginning of GSL Program Proposal to Replace FFELP with FDLP Congress attempts to Eliminate FDLP Failure to do so dual existence. The Switch Credit crisis & scandals began the move by many schools to FDLP Health Care & Education Reconciliation Act Effective 7/1/2010 elimination of new loans in the FFELP Federal Credit Reform Act Budget rules changed that made FDLP possible. Budget Reconciliation Required colleges to switch to FDLP 60% market share. Program Dual Existence FFELP & FDSLP dual existed with approximately a 70% FFELP, 30% FDLP split Budget Proposal As a cost savings) to eliminate FFELP

5 Brief History of FFELP/FDSLP

6 How does the current process work? COD LDE Origination Disbursement Loan Allocation Servicer Assignment Customer Service COD LDE : Loan Distribution Engine: interface to assign loans to the federal loan servicers. Booked Loan: occurs when the COD system accepts an origination record; links p-note to the record and accepts actual disbursement. S E R V I C I N G Servicers Direct Loan Servicing Center (ACS) FedLoan Servicing (PHEAA) Great Lakes Educational Loan Services, Inc. Nelnet The federal loan servicer is assigned upon booking of loan. Sallie Mae

7 Federal Loan Servicers TIVAS NFP s FedLoan Servicing (PHEAA) Aspire Resources Inc. Great Lakes Educational Loan Services, Inc. CornerStone Nelnet ESA/Edfinancial Sallie Mae Granite State GSMR MOHELA OSLA VSAC

8 How were the servicers selected? ACS Affiliated Computer Services For a many years was the sole servicer of direct student loans. In May of 2008, Congress passed the Ensuring Continued Access to Student Loans Act (ECASLA) that allowed ED to purchase FFELP loans, creating the concern that more loan servicers were needed to handle the additional loan volume. In 2009 after a competitive process the Department awarded contracts to four organizations to help service the Direct Loan portfolio. This included Great Lakes, Nelnet PHEAA, and Great Lakes. By August 31, 2010 these four additional servicers were fully operational. HCERA/SAFRA also provided the legislation that created the not-for-profit servicers. These servicer received volume from the transfer of loans from ACS. From January 2013 to August 2013, ACS loans were transferred to the federal loan and not-for- profit servicers. More not-for-profit servicers were schedule to be added, however, as a result of sequestration (Budget Control Act of 2011) the adding of new NFPS was halted.

9 Howisloanvolumeplacedwithservicers? Federal Loan Servicers Allocation of volume is performance-based Default management performance metrics Customer Satisfaction Surveys Borrower School FSA Not-For-Profit Servicers The law passed by Congress set a floor of 100,000 borrower accounts for each qualified NFP servicer. The Secretary of Education has allocated only the minimum 100,000 accounts thus far, however the authority exists to increase, reduce, reallocate, or terminate a servicer s allocation depending upon the performance of the servicer.

10 Who are the Contractors? FEDERAL LOAN CONTRACTORS COD - Accenture Federal Loan Servicers Great Lakes Fed Loan Servicing (PHEAA) Nelnet Sallie Mae soon to be Navient Not-For-Profit Servicers MOHELA with subs ESA/Edsouth/EdFinancial with subs Cornerstone/UHEAA Aspire Resources with subs New Hampshire Education Loan Corp Granite State Oklahoma Student Loan Authority (OSLA) Vermont Student Assistance Authority (VSAC) OTHER KINDS OF CONTRACTORS (EXAMPLES) SIS Vendors Third Party Servicers/Contractors Default Prevention CDR Management Verification Services Customer service outsourcing for FAO. Retention vendors Net Price Calculators vendors FAFSA Completion vendors Student Loan Counseling providers A/R Companies for Perkins and Institutional Loans

11 Why was a standard needed? Multiple data stores NSLDS Loan Servicers With the adding of the additional NFP Servicers the landscape could potentially become more complicated Multiple data files The same and yet different data A standard would bring uniformity to this multi-format, disparate data scenario Benefit to school Benefit to the loan servicers Benefit to 3rd party servicers

12 Why a Flat File and not XML? Flat files were the data format that schools and the loan servicers were already exchanging There was a sense of urgency/expediency to get a standard created Pursing an XML format would have taken much longer Since this a voluntary standard we needed to element impediments to implementation Based on the scenario, a flat file was the best approach for maximum implementation To-date, 3 of the 4 federal loan servicers either have or are implementing One of the Not-For-Profit Servicers is implementing For the others it is a non-issue as they are providing data via the NSLDS files Not opposed to XML. The Community will need to decide

13 Description of the Reporting Standard Borrower Demographic Information Location information Enrollment information School information Lender information Servicer information Reference information Student information Borrower Loan Information Loan type Loan status Loan period Loan repayment information Loan delinquency information Loan deferment and forbearance information Loan default information

14 Why Version 2.0 of the Standard? New standard, anticipated changes Version 2.0 New fields added 7 Clarifications to definitions of existing fields 2 Values added or clarified 6 Field length modified 1 Some instruction clarification Anticipate other maintenance type of revisions Open to other ways of data exchange as they become accepted and available for usage

15 Other Standardization Opportunities? Yes, there are various, probably many within the broad category of student aid Other loan and servicing related opportunities Front end possibilities/opportunities Anything being created in paper form with no e-counterpart is a candidate Anything in current e-form but being produced in multiple formats by different participants This is where input and direction from the school community is much needed

16 The Student Aid User Group Student aid PESC approved standards COD - Common Origination and Disbursement (Federal direct student loans and grants) CRC - Common Record: CommonLine (bank-basedbased Federal and private student loans) Online Loan Counseling NSLDS - National Student Loan Data System Student Loan Reporting Detail Student Aid User Group There is a current group that exists It has been mostly inactive

17 The Student Aid User Group Question: Is there a need for a Student Aid User Group to direct the standardization effort surrounding student aid? 1. Even though one loan program, multiple players 2. There are other non-loan areas that could benefit from standardization 3. There are still prominent paper processes in many institutions that could benefit from standardization 4. Student aid is always evolving and new processes will arise that could benefit through standardization Response: While vendors and third party servicers could determine the areas of focus and prioritize the school community needs to be the driving force to help direct the work that needs to be done. The school community needs to determine if such a user group is really needed.

18 Our Contact Information Kristi Blabaum Systems Integrations Analyst Great Lakes Educational Loan Services, Inc Brian Allison Vice President Product Development USA Funds