Session #60

Financial Institution Scorecards

Jerry WallaceBen Chiu

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Financial Institution Scorecards

• What are scorecards?• Scorecard training tools • Process for refining scorecards• Using scorecards to measure

performance

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What are Scorecards?

• A Risk Management tool • Improve Program Integrity• Improve Program Compliance

• Available to GA and lender via FPDM• http://www.fp.ed.gov/PORTALSWebApp/

fp/dmart.jsp

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Data Mart Training Tools• Online Training Available

–http://www.fp.ed.gov/fp/attachments/fms_data_nslds/intro.htm

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Process for Refining Scorecards

• 2001 – FPDM released for internal use

• 2002 – GA access to FPDM• 2003 - Lender Scorecard

Developed• 2004 – GA Scorecard Developed• 2007 – Lender access to FPDM

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Process for Refining Scorecards

• Power Users Group•Bi-weekly meetings

• FPDMHelp@ed.gov

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Measuring Performance

Using Scorecards to Measure Performance

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Sample GA Scorecard

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GA Performance Indicators• Change in Federal Funds• Minimum Reserve Ratio• Cash Liquidity• Change in Operating Funds• Projected Minimum Reserve Level• Cohort Default Rate (Data based on

two fiscal years)

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GA Performance Indicators• Percentage of Change in Default

Portfolio• Portfolio Characteristics• Rate of Reinsurance• Account Maintenance Comparison• Total Collections on Defaulted Loans

Current Year

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GA Performance Indicators• History of Total Collections on

Defaulted Loans• Market Share• Change in Loan Status• Edit Pass Rate• FFEL Collections• Direct Collection Activities

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GA Performance Indicators• Rehabilitation Collections

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Key GA Indicators• Reserve Levels

–Minimum Reserve Levels–Cash Liquidity

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Key GA Indicators• Claims and Cohort Rate

–Percent Change in Default Portfolio–Portfolio Characteristics

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Key GA Indicators• Collections

–Direct Collection Activities–History of Total Collections on

Defaulted Loans

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Sample Lender Scorecard

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Lender Performance Indicators

• Portfolio Characteristics• Default Claim Rate• Change in Default Claim Rate• Delinquency Rate• Change in Delinquency Rate• Origination Fee Variance• Interest Adjustments

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Lender Performance Indicators • Cohort Default Rate• Change in Loan Status• Purchases• Sales• Capitalized Interest• Voids• Program Review Results

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Lender Performance Indicators • ED 799 Late

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Key Lender Indicators• Portfolio Characteristics

–Purchases–Sales

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Key Lender Indicators• Default Rate

–Default Claim Rate–Change in Default Claim Rate

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Key Lender Indicators• Adjustments

–Origination Fee Variance–Interest Adjustments–ED 799 Late

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Contact Information

We appreciate your feedback and comments. We can be reached at:

• Phone: Jerry Wallace (214) 661-9515• Phone: Ben Chiu (415) 486-5623• Email: Jerry.Wallace@ed.gov• Email: Ben.Chiu@ed.gov