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

• Ensuring Continued Access to Student Loans Act (ECASLA)– Several programs including Put

Program– Ensure funds are available for lenders

to continue financing FFELP loans

Put Loan Background

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

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)

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

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

Put Process Timeline

Put Process Timeline

• Day 45 – Day 10: Start Put Process

• Day 9: Adjustment Cutoff Date

• Day 0: Anticipated Put Date

Put Process Timeline

Timeline Review

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 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

Day 0

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

Student Resources

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 loans

are serviced

Borrower Perspective

• Day 0– Sample John Doe Letter sent 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

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

Put Loan Servicer Codes

• ACS700577, GA code 577

• Sallie Mae 700578, GA code 578

• PHEAA700579, GA code 579

• Great Lakes700581, GA code 581

• Nelnet700580, GA code 580

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.

Borrower Path to NSLDS

2. Enter•Social security number •First two letters of last name•Date of birth •FAFSA PIN (Personal Identification Number)

1. Go to

www.nslds.ed.gov

Borrower View of NSLDS Loan Menu

Loan Detail

Click the aqua number boxes to see loan detail.

Put information displays here.

Dept. of Ed/Great Lakes information

Dept. of Ed information

Client Services and Borrower Services are main contacts.

School Resources

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 loans

serviced by Great Lakes

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 yr2.)Stafford < 320 days current cohort yr3.)Stafford delinquent not current cohort yr4.)GradPLUS 60+ days delinquent5.)PLUS delinquent – provides student name

Click on Loan Detail to see guarantor/lender/servicer history.

*

*Loan is part of the 2008-2009 Loan Purchase Commitment Program

Click the underlined blue name to see contact information for the entity. See next page…

School View of NSLDS

Loans put to ED, guaranteed by ED, serviced by Great Lakes

This borrower’s loans 1 and 2 are guaranteed by ASA, with Chase as lender. Loans 3 and 4 have been put.

School View of NSLDS

Commonly Asked Questions

• How will loans be allocated between the servicers?

• Will schools or students be able to choose which servicer they work with?

• How will split servicing situations be handled?• How will customer satisfaction be measured?

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