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The Put process and its effect on schools and student borrowers

The Put process and its effect on schools and student borrowers. Agenda. Put loan overview (Background) Put Process Timeline Student Resources School Resources. Put loan overview. Put Loan Background. 2007: Lenders having difficulty creating new loans Subsidy cuts National credit crisis

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The Put process and its effect on schools and student borrowers

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  1. The Put process and its effect on schools and student borrowers

  2. Agenda • Put loan overview (Background) • Put Process Timeline • Student Resources • School Resources

  3. Put loan overview

  4. Put Loan Background • 2007: Lenders having difficulty creating new loans • Subsidy cuts • National credit crisis • Ensuring Continued Access to Student Loans Act (ECASLA) • Several programs including Put Program • Ensure funds are available for lenders to continue financing FFELP loans

  5. Put Loan Background • Originally scheduled to expire in 2009, Put Program has since been extended to end of 2010 award year (9/30/10)

  6. Put Loan Process Overview • Lenders sell FFELP loans to the U.S. Department of Education (ED) • If fully disbursed priorv to September 30 of that year • When loan is sold: • Remains true to the MPN • Still classified as a FFELP loan • FFELP guaranty no longer exists • Owned and serviced by ED(or it’s designated service providers)

  7. Eligibility Dates • ECASLA I (08-09) • First disbursement is on or after 05/01/2008 but before 07/01/2009 • Loan is fully disbursed by 09/30/2009 • Academic period for the loan includes 07/01/2008 or begins after 07/01/2008 • ECASLA II (09-10) • First disbursement is on or after 05/01/2009 but before 07/01/2010 • Loan is fully disbursed by 09/30/2010 • Academic period for the loan includes 07/01/2009 or begins after 07/01/2009

  8. Put Servicers • ECASLA I: ACS • ECASLA II: Four additional servicers - Great Lakes Higher Education • AES/PHEAA • Nelnet • Sallie Mae • Great Lakes Client Services Dept. is main point of contact for questions

  9. Put Process Timeline

  10. Put Process Timeline • Day 45 – Day 10: Start Put Process • Day 9: Adjustment Cutoff Date • Day 0: Anticipated Put Date

  11. Put Process Timeline Timeline Review Day 0+: -Anticipated Put Date -Borrower Notification Letter sent (Welcome Letter) -CL notification to schools regarding transfer -Changes cannot be processed by original service provider -Change Transactions remain limited… -Increases, Reinstatements, Reissues, Add Disb NOT ALLOWED -LP Dates, Grade Level, Reallocations, Refunds, Reversals still ALLOWED Day 45 - 10: -ED notifies GL of transfer -Contact seller to discuss details of sale -Lenders not required to notify schools yet -All change transactions are ALLOWED… Grade Level, LP Dates, Reinstatements, Reissues, Increases, Add Disb, Reallocations, Refunds, Reversals Day 45 Day 9 Day 0 Day 9 - 1: -Adjustment Cutoff Date -Current servicer sends loan transfer file to GL -Once loans verified, GL receives Bill of Sale -Change Transactions restricted… -Increases, Grade Level, Reinstatements, Reissues, Add Disb NOT ALLOWED -LP Dates, Reallocations, Refunds, Reversals still ALLOWED

  12. Student Resources

  13. Borrower Perspective • Day 0: Anticipated Put Date • What does the Borrower see? • Borrower Notification Letter (welcome letter) • GL Previously Serviced; GL Put Servicer (sample John Doe letter) • Non-GL Previously Serviced; GL Put Servicer (sample Jane Doe letter) • Other resources: • mygreatlakes.org for account information, etc. • NSLDS for verification of where all loansare serviced

  14. Borrower Perspective • Day 0 • Sample John Doe Lettersent to borrower once put loan is loaded to our system if GL was previous Servicer & is now Put Servicer • Letter Explains: • Loan has been put to ED • GL will still service loan & send updated payment statements if needed • They may have other loans with lender not affected • GL contact & payment information

  15. Borrower Perspective • Day 0 • Sample Jane Doe Letter sent to borrower once Put loan is loaded to our system if GL was NOT previous servicer & is now put servicer • Letter Explains: • Loan has been put to ED • GL will now service loan & send payment statements if needed • They may have other loans with lender not affected • GL contact & payment information

  16. ACS 700577, GA code 577 Sallie Mae 700578, GA code 578 PHEAA 700579, GA code 579 Great Lakes 700581, GA code 581 Nelnet 700580, GA code 580 Put Loan Servicer Codes

  17. NSLDS NSLDS allows schools to verify when a loan was sold to the Department. *Loans are only identified as being sold to the Department after the sales date and NSLDS has been updated.

  18. Borrower Path to NSLDS 1. Go to www.nslds.ed.gov • 2. Enter • Social security number • First two letters of last name • Date of birth • FAFSA PIN (Personal Identification Number)

  19. Borrower View of NSLDS Loan Menu Loan Detail Click the aqua number boxes to see loan detail. Put information displays here.

  20. Dept. of Ed/Great Lakes information Client Services and Borrower Services are main contacts. Dept. of Ed information

  21. School Resources

  22. Put Loan Servicing Page • mygreatlakes.org • Click Great Lakes Servicing Federal Student Loans • Resources • Great Lakes Servicing Overview: Put Loans • Details put process and how to identify and work with put loans • List of contacts and resources for all put loan servicers • Sample Borrower Notification letter • Federally-Held Loans Serviced by GL Detail Report • Provides list of borrowers with put loansserviced by Great Lakes

  23. Default Management • Borrowers at Risk Report • Includes all Stafford & PLUS borrowers now 60 days or more delinquent on loans guaranteed or serviced by GL • Email address, mailing address, up to two phone numbers for each borrowerUpdated every week • Grouped into five categories: 1.)Stafford 320+ days current cohort yr 2.)Stafford < 320 days current cohort yr 3.)Stafford delinquent not current cohort yr 4.)GradPLUS 60+ days delinquent 5.)PLUS delinquent – provides student name

  24. School View of NSLDS Click on Loan Detail to see guarantor/lender/servicer history. Click the underlined blue name to see contact information for the entity. See next page… * * Loan is part of the 2008-2009 Loan Purchase Commitment Program

  25. School View of NSLDS This borrower’s loans 1 and 2 are guaranteed by ASA, with Chase as lender. Loans 3 and 4 have been put. Loans put to ED, guaranteed by ED, serviced by Great Lakes

  26. Commonly Asked Questions

  27. Great Lakes Contact Information • Great Lakes Client Services • 888 686-6919 • clientservices@glhec.org • George Fuller • National Accounts Sales Director • 616 827-9926 • gfuller@glhec.org

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