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Put Process and Servicing Federally Held Loans

Put Process and Servicing Federally Held Loans. Agenda. Put Loan Overview Put Process Timeline School Resources Questions. Put Loan Overview. Put Loan Background. 2007: Lender difficulty creating new loans College Cost Reduction Access Act (CCRAA) National credit crisis

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Put Process and Servicing Federally Held Loans

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  1. Put Process and Servicing Federally Held Loans

  2. Agenda • Put Loan Overview • Put Process Timeline • School Resources • Questions

  3. Put Loan Overview

  4. Put Loan Background • 2007: Lender difficulty creating new loans • College Cost Reduction Access Act (CCRAA) • National credit crisis • Ensuring Continued Access to Student Loans Act (ECASLA) – May 2008 • Put Program – Temp authority to purchase • Created a secondary market for lenders

  5. Put Loan Process Overview • Lenders sell FFELP loans to the U.S. Department of Education (ED) • If fully disbursed prior to September 30 of that year • Falls within eligibility dates • 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

  6. 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

  7. Eligibility Dates • 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. Program Scope • According to SLA analysis, over 85% of FFELP loans will be sold to Department • Based on Department data published September 15, 2009 • $20.1 billion sold to the Department • Additional $30.3 billion to be sold in next 45 days • $50.4 in total sales to Department of Education figures

  9. Program Scope • Total FFELP $58.7 billion • Consistent with recently released Department of Education figures • Source: Student Lending Analytics Blog Posted September 20, 2009 • http://studentlendinganalytics.typepad.com/student_lending_analytics/

  10. Put Servicers • ECASLA I: ACS • ECASLA II: Four additional servicers - Great Lakes Higher Education • AES/PHEAA • Nelnet • Sallie Mae

  11. Put Process Timeline

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

  13. Put Process Timeline • Day 45 – Day 10 • GL is assigned Notice from ED • We contact seller to discuss details of sale • Lenders not required to notify schools of loans identified for sale

  14. Put Process Timeline • Day 45 - 10: Changes Allowed • All changes are still possible during this time • Changes processed same as any other FFELP loan • Original service provider should be able to process changes sent which do not contain errors -Grade Level -LP Begin & End Dates (not outside of Put criteria) -Reinstatements -Reissues -Loan Increases -Additional Disbursements -Reallocations -Refunds -Refund Reversals (only for correcting mistakes) ▪returned in error ▪returned to wrong account Electronic Manual

  15. Put Process Timeline • Day 9 - 1: Adjustment Cutoff Date (Day 9) • Current Servicer sends loan transfer file to GL (as ED Put Servicer) • Work w/seller & current servicer to resolve discrepancies • Once loans are verified, GL receives Bill of Sale from selling lender • Bill of Sale is official document that transfers ownership to ED

  16. Put Process Timeline • Day 9 – 1: Changes Restricted • Some Change Transactions CANNOT be performed on or after Adjustment Cutoff Date (Day 9) ALLOWED: -Grade Level -LP Begin & End Dates (not outside of Put criteria) -Refund Reversals (only for correcting mistakes) -Reallocations -Refunds NOT ALLOWED: -Reinstatements -Reissues -Loan Increases -Additional Disbursements Manual Electronic

  17. Put Process Timeline • Day 0: Anticipated Put Date • Date the loan is scheduled to be transferred to ED (Put Servicer) • Our system sends CL notification to schools • Informing them of transfer • Letting them know to communicate with GL as servicer • With the exception of ELM

  18. Put Process Timeline • Day 0 & Beyond: Changes Limited • From this point on, changes cannot be processed by original service provider • We send CL response confirmation when schools submit allowable change transactions for processing ALLOWED: -Grade Level -LP Begin & End Dates (not outside of Put criteria) -Refund Reversals (only for correcting mistakes) -Reallocations (both loan types must be Put & already exist w/same disbursement dates. Need to have same unique IDs to process electronically) -Refunds NOT ALLOWED: -Reinstatements -Reissues -Loan Increases -Additional Disbursements Manual Electronic

  19. 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

  20. 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

  21. 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

  22. Change Transaction Dates

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

  24. NSLDS • Select AID tab • Select borrower • A list of loans for the borrower displays • If the loan is sold to the Department • Dept of Ed (Guarantor) in the GA field • Department of Ed (Servicer) in the Servicer field • Click Loan Detail. • The GA/Lender/Servicer Agent History page with a web link to current servicer

  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. 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

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

  28. Borrower Path to NSLDS • 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)

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

  30. 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

  31. School Resources

  32. Put Loan Servicing Page • mygreatlakes.org • Click Great Lakes Servicing Federal Student Loans

  33. Put Loan Servicing Page • 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

  34. 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

  35. Default Management Borrowers at Risk Report • 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

  36. Commonly Asked Questions

  37. Quarterly Customer Service Performance Results • http://www.ifap.ed.gov/eannouncements/031010Loan ServicingInfo.html

  38. Sample Allocations based on Results

  39. Questions? Great Lakes Client Services (888) 686-6919 clientservices@glhec.org Mike Mutziger Vice President, Marketing and Sales - Northcentral (888) 502 – 5902 x3032 mmutziger@glhec.org

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