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

• Ensuring Continued Access to Student Loans Act (ECASLA) – May 2008– Put Program – Temp authority to purchase– Created a secondary market for lenders

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

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

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

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

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/

Put Servicers

• ECASLA I: ACS

• ECASLA II: Four additional servicers

- Great Lakes Higher Education

– AES/PHEAA– Nelnet– Sallie Mae

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

• 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

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

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

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

Electronic

Manual

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

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

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

Change Transaction Dates

Type of Change Transaction Date Restriction

Reinstatements Not allowed on or after adjustment cutoff date (day 9).

Reissues Not allowed on or after adjustment cutoff date (day 9).

Loan Increases Not allowed on or after adjustment cutoff date (day 9).

Grade Level No date restrictions.

Additional Disbursements Not allowed on or after adjustment cutoff date (day 9).

Loan Period Begin and End DatesNo date restrictions unless the change would move the loan outside of eligible put criteria.

Reallocations

No date restrictions.

However, both loans must be serviced by the same put loan servicer and must have disbursed on the same date.

Refunds or Cancellations No date restrictions.

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

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

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

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

Dept. of Ed/Great Lakes information

Dept. of Ed information

Client Services and Borrower Services are main contacts.

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.

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

School Resources

Put Loan Servicing Page

• mygreatlakes.org– Click

Great Lakes Servicing Federal Student Loans

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 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

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

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?

Quarterly Customer Service Performance Results

• http://www.ifap.ed.gov/eannouncements/031010Loan ServicingInfo.html

Sample Allocations based on Results

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