School Services for North Carolina

1. School Services for North Carolina Offered by State Education Assistance Authority & College Foundation, Incorporated North Carolina Association of Community College Presidents 2014 Summer Meeting Greensboro, North Carolina Steven E. Brooks Executive Director State Education Assistance Authority

2. Statutory Purpose (G.S. Chapter 116, Article 23, § 116-201) To administer “a system of financial assistance…to assist qualified students to enable them to obtain an education … by attending public or private educational institutions….” North Carolina’s Education Assistance Agency Since 1965

3. Why does SEAA offer School Services? • Aid administration increasingly complex and technical – compliance or students? • Requests from Community College system office and from UNC General Administration • Harness our infrastructure in ways that provide greater efficiencies for North Carolina colleges and universities • Simplify the administration of student financial aid on campus • Assure regulatory compliance in complex areas • Offer low cost and high quality services to North Carolina colleges and universities

4. College Foundation, Inc. (CFI) • Chartered in 1955; contract services for SEAA since 1966 • 501(3)(c) not for profit • 509(a)(3) supporting organization for the State (SEAA) • Use the specialized infrastructure developed for CFNC and for servicing loans and grants to offer other centralized services needed by North Carolina higher education • CFI may also offer these services at a higher cost out of state and is pledged to use any net revenue from these operations to defray costs of CFNC and other outreach services for the benefit of North Carolina students and families

5. School Services Currently Offered/ in Development • Verification of ISIR Data • EX$EL Financial Education and Repayment Success • Residency determination (being developed per legislative instruction) • We are open to new services as our colleges request • Aid Like a Paycheck • Satisfactory Academic Progress

6. Verification Update Federal verification can create negative impact on • Student enrollment • Aid delayed is aid denied – defer/reduce enrollment, withdraw • Verification delays also slow down entire pipeline • Customer service • Offices with telephone backlogs, closed for processing, long lines • Financial aid office seen as police rather than offering access • Campus cash flow and budgets • Greater costs to fill seats • Lower tuition revenue • Burdens of emergency loans, etc. • Compliance and liabilities • Verification is among the top items causing required repayment to USED

7. Current Verification Statistics • 23 campuses participating • 12 North Carolina Community Colleges • 6 UNC campuses • 1 North Carolina independent college • 4 Out of state schools (2 community colleges, 2 state universities) • Expect to process 63,000 students this year • Have over 36,000 underway, with 18,700 already verified • Compared to total last year of 18,286

8. Partnership Results • Verification service is a consistent, fully compliant system – that still allows school choice for additional verification items • Verification complete in less than 1/3 of the national average time • Schools report 50% more aid, including Pell, processed and available by fall registration/fee payment deadline

9. Partnership Results • FA administrators reported more time with students most likely to withdraw or defer enrollment • Noticeable reduction in office visits and phone traffic during verification cycle and fall registration • Students “pleasantly shocked” by significant improvement in process and, specifically, how quickly FA funds available

10. How Schools Rated the Service Value Created Benefits for financial aid offices and students: • “Even though the staff were still busy, they could spend more time with the students that needed it.” • “What we did had more meaning for the student and the college.” • “Staff could spend time where it really matters - on students struggling with the process. By explaining their options to students, the staff built a bond with the students.”

11. Concrete Results for Campuses Results Davidson County Community College • Increase in confirmed financial aid awards prior to start of Fall classes. • Fall 2011 = 2753 • Fall 2012 = 3080 • Fall 2013 = 3329 • Northern Virginia Community College (new this year) • Joan Zanders, Director of Financial Aid, says that at this point in the cycle they have packaged 2,500 more students than last year because of the verification outsourcing, with high levels of student satisfaction.

12. College required activities to complete Verification THE CFI VERIFICATION PROCESS AT A GLANCE CFI activities to complete Verification

13. Questions on the Verification Service?

15. Loan Challenges for Colleges • More students borrowing more • No win proposition for colleges • Hands tied behind your back by federal rules • Default rates rising and Pell Grant participation threatened • Servicers not paid for serious repayment success efforts • Schools getting blame although not in control • Negative press about price and borrowing and loan participation • Staff lacks time/resources to manage defaults effectively • But must help students succeed • Must maintain reputation for administrative capability • Need a “default management plan” that really works • Boost repayment success of all borrowers, not just to prevent some from defaulting

16. Loan Challenges for Students • Costs rising; more students borrowing more money • Lack of financial knowledge/awareness • Confusing repayment options • Income-based options • 3 distinct options: ICR, IBR, PAYE • 11% of borrowers use one of these • Extended/graduated options • 3 distinct options– Extended, Graduated, Extended-Graduated • 22% of borrowers use one of these • Standard 10 year plan • 66% of borrowers • Standard is the default option if an alternative is not selected

17. Federal Loan Default Rates President Obama’s “Plan to Make College More Affordable” • “Help struggling borrowers” • Should take advantage of existing infrastructure • There are entities out there that know how to do this job FFY 2010 2 year3 year SEAA 2.87% 4.62% Federal 9.1% 13.4% FFY 2011 2 year3 year SEAA 3.05% 5.73% Federal 10% 14.7% SEAA default rates about 1/3 of federal average

18. Financial Education is • Much more than just default prevention • We all know that our students need much more financial literacy and savvy • And that means all students … not just borrowers of federal loans • In fact, if you do not offer federal loans, your students may need it even more to gauge credit card offers and private loans • And you may need it more to control bad press

19. What is needed are services are designed to: • Help schools improve student retention and persistence to graduation • Identify and assist students in financial stress • Help students make intelligent borrowing decisions • Enhance borrower understanding of repayment choices • Guide borrowers toward successful repayment of their loans by finding the most favorable arrangements for them • Help prepare borrowers for their financial and professional lives after college ends • Help schools reduce their cohort default rates 19

20. How can help? • Serves students on behalf of campus • Serves as a guide, an advocate, and an educator • Not as a loan collector! • A trusted resource provided by the college because of its concern for student success • Supports campus in mission to prepare students to succeed in their professional endeavors and personal lives • Supports reduction campus cohort default rate

21. Financial Education and Repayment Success 21

22. Understanding My Money for enrolled students • A modular, self-directed on-line course that: • Is targeted to currently enrolled students • Recognizes differences in financial experience in student groups • Tailors education experience to needs of each individual student • Provides analytics to campuses - at risk & financially stressed • Topics include Financial Basics Budgeting Borrowing Wisely Credit Cards Identity Theft Repayment Responsibility Dealing with Financial Trouble Much more • Includes core topics to reinforce entrance and exit counseling • Course materials supplemented with regular emails and texts with links to timely information • Promising new research on use of texts with this generation • Student must opt in for texts 22

23. Sample Communications– In School Borrowing Wisely Managing Accounts Dealing with Not Enough Aid Budget Saving Tips Renting an Apartment Credit vs. Debit Cards Borrowing for Graduate School Managing Student Loan Debt The National Student Loan Data System (NSLDS) Creating Healthy Spending Habits Money Saving Ideas Daily Simple Interest Repayment Strategies Grace and Deferment Period Strategies

24. My Future, My Money for borrowers as they leave school • Covers grace period & 1st three years of repayment • Incorporates “literacy” portions of “Understanding My Money” • as a review or • for those who did not complete in school (without analytics) • Adds financial skills and employment skills, such as: • What to Do on Day One (filling out tax forms, benefit matching) • Business Etiquette and Professionalism (dress, dining, email, attitude, problem solving, networking, even how to leave a job) • Broader Life Topics (buying a car, home or having a baby, etc.) • Course materials supplemented with emails and texts with links to timely information • For past due borrowers, specific assistance in finding best outcomes 24

25. Sample Communications -- In-Grace Period Budgeting Introduction Repaying College Debt Day One of a New Job How Repayment Plan Choices Affect Loan Cost The Role of Your Loan Servicers Money Management in the Real World

26. Sample Communications – Repayment Current Managing Student Loan Debt Creating Healthy Spending Habits Credit Reports and Scores Understanding Your Paycheck Employer Benefits Budgeting Money Saving Tips Saving and Investing Checking and Savings Accounts Buying a Car Insurance Investments .

27. Sample Communications – Delinquent Borrowers Get back on track – look at My Future, My Money resources on the web Repayment Options Creating a Debt Reduction Plan Dealing with Student Loan Debt Managing Loans in times of Financial Distress Debt Management and Financial Trouble General information and a reminder to deal with the situation General information – contact your loan servicer Consequences of default Don’t default on your student loan Defaulting has consequences – Reiterates serious consequences if a loan defaults. Time is running out – don’t default The emails encourage the delinquent borrower to contact his loan servicer.

28. Intensive Counseling option • Begins at 181 days past due • Much more telephone work than in the regular “cohort” services • Communication on a range of topics for delinquent borrowers (email communication is a standard service for cohort; “intensive” adds the phone contacts.

30. Student homepage with access to all financial education resources

32. Extensive and dynamic library of resources that include modules and coursework. There are exercises and calculators (making a budget, financial goals, etc. 128 Fact Sheets Student/borrower can save work in her Portfolio

33. What the college sees

35. Filter borrower list Sort by items listed (SSN, Name, Status, etc.) Click on looking glass NSLDS details Contact details Communication details (including text of emails sent to borrower)

36. What the student sees Student Name Campus Name

38. Extended hours for telephone support • Toll-Free 844-371-1538 8:00am to 8:00 pm Monday through Thursday 8:00 am to 5:00 pm Friday

39. Questions? More information: Rose Mary Stelma College Foundation rstelma@cfi.org Steve Brooks NCSEAA sbrooks@ncseaa.edu