Lenders/ Guarantors/Servicers – Who Does What and When? Presented by: Gretchen Bonfardine Professional Services Consultant.

Slides:



Advertisements
Similar presentations
BEST PRACTICES What Forms Should a Student’s Financial Aid File Contain?
Advertisements

Student Payment Options & Student Insurance. Emergency Loans The Emergency Tuition and Fees Loan Program is a short-term loan in which students are attesting.
Effective Entrance and Exit Counseling Maria Luna-Torres Director of Education Finance Initiatives TG.
Verification - Definition  Process of verifying accuracy of Free Application for Federal Student Aid (FAFSA) data  Regulations define:  Whose application.
Cash Management and Business Officers Hal Deuser Assistant Bursar Webster University.
Total and Permanent Disability (TPD) Discharge Training Teleconference Carl Casey-Nelnet Ron Stroud-TG June 12,
Entrance Counseling. Agenda  Understand Your Commitment.  Your Loan Terms.  150 Percent Subsidized Direct Loan Limit.  Repayment.  Consequences.
University of Wyoming – Delta Alpha Chapter Financial Literacy Student Loan Information.
Presented by: Thomas Murphy Harvard University Employees Credit Union Medical School Loan Repayment & Building Credit PARTNERS OFFICE of RESOURCES for.
Managing Your Cohort Accounts Presented By: James F. McDonald Director of Sales.
Welcome Students! Chaffey College Financial Aid Direct Loan Workshop.
Status Of Federal Student Loans Presented by: Trisha Malloy, Outreach Representative, FAME October 10, 2008.
ECASLA Programs Participation Program PUT Program SLGFA Annual Conference Crowne Plaza Hotel March 10 th, 2009 Wanda Hall Theresa McDuffee Edfinancial.
GHEAC Mardi Gras: Parade of Service 2003 GHEAC Annual Conference March 4 - 5, 2003 GHEAC SERVICE OPTIONS for 2003/2004 Mike Behler, Field Representative.
Montana Guaranteed Student Loan Program An Overview of the M ontana G uaranteed S tudent L oan P rogram (MGSLP) September 25, 2003.
Non-Profit organization Player in Student loan Origination and Servicing Outstanding customer service Default prevention.
Loans for College Understanding the Different Types of Get in 2 College, LLC.
Student Loan Repayment Presented by Bill Bufkins.
Jean Balcer Financial Aid Processing Coordinator Davenport University.
PROACTIVELY IDENTIFYING POTENTIAL IMPACTS OF PUT LOAN TO BORROWERS Creating A Positive Customer Experience NCHELP Program Operations Update May 26, 2009.
1 October 16 th, Topics:  Completing the FAFSA  Eligibility  Common Mistakes when completing the FAFSA  Different types of Federal Aid  Scholarships.
Paying for college Financial aid overview
Your future. Our Mission. Student Financial Assistance Office.
Office of Financial Aid Duke University School of Medicine Financial Aid for the Pathologists’ Assistant Program.
Session 35 Title IV Consolidation Loans Kristie Hansen Policy Liaison and Implementation US Department of Education.
N EXT S TEPS TO C OMPLETE THE F INANCIAL A ID P ROCESS 2012 Parent Programs.
 Funded by the US government  Apply by completing the Free Application For Federal Student Aid {FAFSA} online at  Complete the application.
Driving Uncertainty into Opportunity Predicting the Future by Understanding Current and Past Students TASFAA April 2014.
National Association of Student Financial Aid Administrators Presents… John Kolotos Carney McCullough US Department of Education CASH MANAGEMENT Current.
NYSFAAA NYSFAAA Statewide Training Spring 2009 New Requirements for Exit and Entrance Loan Counseling.
For FAA Use Only Higher Education Opportunity Act Overview of Title X Private Student Loan Transparency & Improvement Act Presented by: Cherrie Champie.
Paula Catanzaro EDU 653  You’ve made the decision to further your education. How are you going to pay for it? If you’re like 86% of other college students,
Lower Your CDR: Cohort Default Management-Best Practices Martie Adler, Professional Services Consultant American Student Assistance.
2002 MASFAA Conference DIRECT LOAN CONSOLIDATION David A. Solá U.S. Department of Education Boston Regional Office.
Trailblazer Camp 2007 They All Asked For You Loan Repayment and Responsibilities.
Know….  “ to have learned or found out something”  “ to realize or understand something”  “ to be familiar with a process”
Perkins Loans – To Assign Or Not To Assign October 28, 2014.
Session 14 Student Loan Delinquency Management Mark Walsh U.S. Department of Education Bill Kohl National Student Loan Program.
National Association of Student Financial Aid Administrators Presents… Pamela Moran, Program Specialist, U.S. Department of Education Mary Miller, Regional.
1 FFELP Loan Processing A-Z Presented by: Susan Knoten, MDHE Julie Meyer, MDHE.
Developing a Financial Literacy and Default Prevention Program Presented by: Will Lindsey FedLoan Servicing.
Perkins for Beginners Basic Perkins Due Diligence Requirements A distinctive approach to educational debt recovery since 1974.
MASFAA 2013 October 6 th – 9 th, 2013 Indianapolis, Indiana D EMOGRAPHIC REALITIES: How to Review Your CDR to Determine At-Risk Students and Focus Efforts.
2 Session 19 FFELP Update PLUS MPN 3 Dear Colleague Letter GEN Posted to IFAP on February 7, 2003 Transition Period PLUS MPN may be used for Federal.
DEMOGRAPHIC REALITIES: How to Review Your CDR to Determine At-Risk Students and Focus Efforts for Success DEMOGRAPHIC REALITIES: How to Review Your CDR.
What’s In A CDR? Presented by Gretchen Bonfardine.
SOM Financial Aid Office Located at MMEC Room Open from 8:00 am to 5:00 pm Ms. Bonnie Fore Financial Aid Counselor Mr. Harris King.
Managing Loan Default: Making a Difference in 60 Minutes.
National Association of Student Financial Aid Administrators Presents… Kristie Hansen Policy Liaison and Implementation US Department of Education Title.
NYSFAAA 43 Annual Conference “Helping Students Catch Their Dreams” October 20, 2011 Christopher Alonzo- MCC Jan Scheutzow- Nazareth College Dorcia Ulysses-Diallo-
Residential Real Estate Closings in Georgia
Consumer Outreach – Special Issues – Student Loan Debt Wendy Badger, Chief Compliance Officer ECMC Group, Inc.
Final Rule 2002 Presented by: Betsy Mayotte American Student Assistance MASFAA, November 2002.
Cash Management Notifications And Authorizations.
NYSFAAA 43 Annual Conference “Helping Students Catch Their Dreams” October 20, 2011 Christopher Alonzo- MCC Jan Scheutzow- Nazareth College Dorcia Ulysses-Diallo-
1. 2 Reducing Student Loan Defaults – Strategies for Success Presented by: Mike Stein Default Prevention Initiatives Specialist EDFUND.
Session 45 - Tribal Colleges: The Basics 1 Tribal Colleges: The Basics Return of Title IV Funds R2T4 Deborah Tarpley Department of Education, Region VIII.
College Board TRENDS IN STUDENT AID Total Aid Awarded $134.8 Billion Graduate & Undergraduate 51% or 69 Billion in Loans (FFELP and Direct) –Undergrad.
1 Department of Veterans Affairs Debt Management Center (DMC) School Tuition Debt Payment Procedures Nicole Haselberger Julie Lawrence.
FFELP Guide.  Federal government.  Borrower.  School.  Lender.  Guarantor.  Servicer.  Secondary market. Seven Major Players in FFELP 2.
What’s In A CDR? Gretchen Bonfardine, Professional Services Consultant American Student Assistance.
1 Department of Veterans Affairs Debt Management Center (DMC) School Certifying Officials Workshop Presentation Julie Lawrence.
Direct Loan Exit Counseling
Consumer Outreach: Special Issues – Student Loan Debt
Objectives for Today Review Federal Direct Student Loans
Perkins Liquidation – Best Practices
Protecting Your Credit
9 Topics Agenda. CONGRATULATIONS! Exit Loan Counseling Presented by Office of Financial Aid 2018/2019 Academic Year.
Hands-On: FSA Assessments For Foreign Schools
PROACTIVELY IDENTIFYING POTENTIAL IMPACTS OF PUT LOAN TO BORROWERS
Presentation transcript:

Lenders/ Guarantors/Servicers – Who Does What and When? Presented by: Gretchen Bonfardine Professional Services Consultant

What is a lender? What is a guarantor? What is a servicer? What does each do – from certification through repayment Objectives

Which entity provides the funds? –Lender –Guarantor –Servicer Which entity manages deferments and forbearances? –Lender –Guarantor –Servicer Quiz

Which entity is responsible for default prevention activities? –Lender –Guarantor –Servicer Which entity has federal oversight over the FFEL program? –Lender –Guarantor –Servicer Quiz

Who is responsible for contacting borrowers during the grace period to provide repayment options? –Lender –Guarantor –Servicer Quiz

Players Lender / Servicer Lender must administer its loan portfolio in compliance with the following: –The Higher Education Act of 1965; Federal regulations; Federal directives, including Department guidance such as Dear Colleague Letters/Dear Partner Letters; Guarantor policies, as outlined in the Common Manual; Other requirements and procedures provided by the guarantors with which the lender participates Lender usually contracts these activities out to a Servicer Guarantor The federal oversight for the FFEL program Provides insurance to the lender that if the debt management efforts don’t work, and the borrower doesn’t repay, the Guarantor will repay the loan to the lender. If borrower fails to make payments and they go into ‘pre-claims’, the guarantor gets involved with due diligence activities

Provides funding for loans Manages any loan changes until the loan has been fully disbursed and passed on to the servicer Lender

The following slides detail the lenders responsibilities. But most lenders contract these responsibilities out to servicers. It is ultimately the lender’s responsibility to ensure that all requirements are upheld, but it generally does so through it’s contracts with the servicer Lender / Servicer

(including but not limited to…) Respond within 30 days to all inquiries from the borrower or endorser A lender is required to keep current, complete, and accurate records for each FFELP loan it holds. All records must be retrievable in a coherent hard copy format or in other media formats such as microform, computer file, optical disk, or CD-ROM. Lender / Servicer – General Responsibilities

A record of any adjustments that the lender receives to the borrower’s requested loan amount. Copy of the signed promissory note. The original or a true and exact copy of the promissory note must be retained until the loan is paid in full or assigned to the Department. The guarantee disclosure for each loan, with a record of any changes to the disclosure. Evidence of disbursement Lender / Servicer – Record Keeping Requirements

Documentation of the lender’s handling of any refunds issued by the student’s school. Documentation supporting any Social Security number change. Documentation of the date on which the student was no longer enrolled at least half time and the schools the student attended. Notice of address changes for the borrower or references. Documentation of all repayment terms established with the borrower, including the repayment start date and the amount and number of installments. Lender / Servicer – Record Keeping Requirements

A record of all payments received, including the dates, amounts, and way in which each payment was applied to the principal, interest, and other outstanding balances on the loan. Evidence of any deferment eligibility, including the beginning and ending dates for each. Documentation of any forbearance granted, including the beginning and ending dates for each. Documentation of all due diligence efforts. A record of each communication on the loan—other than regular reports by the lender showing that an account is current—between the lender and a credit bureau. Lender / Servicer – Record Keeping Requirements

The federal oversight for the FFEL program Provides insurance to the lender that if the debt management efforts don’t work, and the borrower doesn’t repay, the guarantor will repay the loan to the lender. If borrower fails to make payments and they go into ‘pre-claims’, the guarantor gets involved with due diligence activities Ultimately, the guarantor is responsible for default prevention activities. –What does your Guarantor do? –Do they go above and beyond their required activities? Guarantor

Provide Notice of Guarantee (NOG) to the school Provide Disclosure Statement to the borrower Provide default prevention programs and materials Guarantor - General Responsibilities

On behalf of the lender, administer all aspects of loan repayment This is who your borrowers will be interacting with throughout their entire repayment – it’s important to choose wisely! –How do your servicer partners compare? –Do they go over an above? –Do you know what they do? Servicer - General Responsibilities

Life of Loan

Origination Period Lender – provides funding for the loan Guarantor – provides guarantee for the loan Once loan is fully disbursed, servicer gets loan info from lender Servicer tracks data (status changes, pre-payments, interest rate changes, etc.) Responsibilities throughout life of loan

Interim Period A lender must provide repayment disclosure to a borrower within a specific time frame –Stafford Loans No more than 240 days and no less than 30 days prior to the first payment due date Guarantors recommend 90 days If lender receives returned mail, guarantors recommend that they immediately begin skip tracing in an effort to keep the borrower in good standing Responsibilities throughout life of loan

Interim Period A lender must provide repayment disclosure to a borrower within a time frame applicable to the borrower’s loan type. –PLUS For a PLUS loan, the lender must disclose the repayment terms at or before the beginning of the repayment period. For PLUS loans, the repayment period begins on the date of the last disbursement. The disclosure must be sent to the borrower—even if the loan will be placed into immediate deferment. Responsibilities throughout life of loan

Interim Period It is the responsibility of the lender/servicer to be in contact with the borrower Some guarantors will also provide debt management services / programs during this time as well Check with your servicers and guarantors to find out what activities they do. –Can they be coordinated for best service to the student? –Can you coordinate the schools activities to supplement or support what your partners are doing? Responsibilities throughout life of loan

Repayment Period Servicer updates guarantor with all changes to the loan throughout Interim and Repayment periods Servicer manages deferments and forbearances If borrower fails to make payments, the Servicer proceeds with required due diligence Responsibilities throughout life of loan

Lender / Servicer must ensure that no gap in collection activity of greater than 45 days 1 – 15 days delinquent – at least one written notice or collection letter informing the borrower of the delinquency and urging the borrower to make payments sufficient to eliminate the delinquency 16–180 days delinquent - Make at least four diligent efforts (each consisting of one successful contact or two unsuccessful attempts) to contact the borrower by telephone. At least one diligent attempt to contact the borrower by telephone must occur on or before the 90th day of delinquency, and another must occur after that date. Also send the borrower at least four written notices or collection letters informing the borrower of the delinquency and urging the borrower to make payments. Due Diligence

181—270 Days Delinquent - The lender / servicer must engage in collection efforts that ensure that no gap in collection activity of greater than 45 days occurs through the 270th day of delinquency. These efforts must urge the borrower to make the required payments on the loan. 241 Days or More Delinquent - The lender / servicer must mail a final demand letter to the borrower anytime the loan becomes 241 days or more delinquent. The final demand letter must require the borrower to remit payment in full and warn that if the borrower defaults on the loan, the default will be reported to a national credit bureau. The lender / servicer must allow the borrower at least 30 days after the date the letter is mailed to respond to the final demand letter and to bring the loan out of default before filing a default claim on the loan. Due Diligence

The lender / servicer must request default aversion assistance from the guarantor no earlier than the 60th day and no later than the 120th day of the borrower’s delinquency

271–360 Days Delinquent - The lender / servicer must file a default claim with the Guarantor no later than the 360th day of delinquency A lender is encouraged to file a default claim on or after the 300th day of delinquency to permit the borrower the longest possible period in which to resolve the outstanding delinquency and avert default. Due Diligence

Repayment Period The lender / servicer must request default aversion assistance from the guarantor no earlier than the 60th day and no later than the 120th day of the borrower’s delinquency When borrower makes a payment, the Servicer takes back full responsibility for administering repayment If borrower defaults, guarantor pays the claim and continues trying to rehabilitate the borrower The lender / servicer provides borrower with “Paid in Full” notice. Responsibilities throughout life of loan

Divider Page Arial Italic 24 pt. Questions

American Student Assistance ® 100 Cambridge Street, Suite 1600 Boston, MA (800) (617) F A X (800) T D D