1 / 12

Default Collection

Default Collection. Dwight Vigna | Dec. 2014 U.S. Department of Education Student Loan Servicing Summit. Goal 1: Be respectful to borrowers and help them find the best solution to resolve their debt regardless of the commission being paid

wickj
Download Presentation

Default Collection

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Default Collection Dwight Vigna | Dec. 2014 U.S. Department of Education Student Loan Servicing Summit

  2. Goal 1: Be respectful to borrowers and help them find the best solution to resolve their debt regardless of the commission being paid Goal 2: Increase the efficiency of collection effort to limit student loan program costs for Federal taxpayers Our Goals

  3. Default Initial Processing • Delinquency day 361, borrowers are added to the Debt Management and Collections System (DMCS) • Welcome letter is sent • Borrower has 60 days to respond • The borrower is directed to our Call Center – 800-621-3115 and our website www.myeddebt.com

  4. No Response to Welcome Letter • Borrower will be reported as in default to Credit Bureaus • Borrower is sent to Private Collection Agency • The Department adds a collection cost fee of 24.34% of the outstanding P&I to the borrower’s account

  5. Borrower Responds to Letter • Borrower works with the Call Center to resolve their debt • No collection costs are added • Borrower never talks with a PCA

  6. PCA Recovery Process • Use a “Waterfall” approach for locating the borrower • Are required to use the following framework for collections • Payment In Full • May offer a compromise • Rehabilitation • Consolidation

  7. Involuntary Payments • PCAs can start the Due Diligence for Administrative Wage Garnishment (AWG) • A Federal employee must actually release the letter for garnishment

  8. Involuntary Payments • Treasury Offset Program • PCAs have nothing to do with this and receive no compensation • Required by law • Administrated by Treasury • Hardship Hearings • Over $2 billion in recoveries last year

  9. Involuntary Payments • Refer to Department of Justice • If the PCA finds assets they can create a litigation package for review • All packages are reviewed by FSA • FSA decides which packages are forwarded to DOJ • Once sent to DOJ we only track payments in order to do normal reporting

  10. PCA Work • The PCA must keep each borrower for six months • If a borrower is returned they will be transferred to a different PCA

  11. PCA Oversight • We use Call Monitoring of recorded calls • 40 calls per PCA per month • We look for both what should be said and what should not be said • Corrective Action plans are created for issues and we follow up to ensure they are completed • On-Site Reviews • On-site reviews are done to check on processing and procedures

  12. QUESTIONS?

More Related