2nd Annual Conference on Technology & Standards NCHELP’s ESC A History of Collaborating in Standards Setting Brian Allison, USA Funds Robert King, Citibank Student Loans Rhonda Allen, SunGard SCT Gary Allen, Oracle/PeopleSoft

2nd Annual Conference on Technology & Standards 2 In the Beginning…and then some  Once upon a time…not so long ago  Turmoil…disorder  As many different ways of doing business as there were entities –Forms –Data Structures –Business Rules –Loan delivery  The larger your market, the more difficult it was to keep pace with all the changes and differences

2nd Annual Conference on Technology & Standards 3 In the Beginning…and then some  It was inconvenient, but no impetus for change  Need community-wide impetus –A paradigm shift –A change in the landscape  Force competitors to work together –Compromise their own interests –Work cooperatively for the common good  For student loans that impetus was Direct Lending – One entity, one way

2nd Annual Conference on Technology & Standards 4 Electronic Standards Committee (ESC)  Hence was born what has become the Electronic Standards Committee  Standing Committee of the National Council of Higher Education Loan Programs (NCHELP)  Broad, representative membership – guarantors, lenders, servicers, secondary markets, schools, software vendors, etc.  Initial task was to develop origination processing standards – Meet the “one way” challenge  The effort began in 1994

2nd Annual Conference on Technology & Standards 5 ESC and CommonLine  Developed and now maintains the CommonLine Origination Processing Standards –CommonLine 95, 96, 3.0 –CommonLine 4.0 (data exchange basis for most origination processing in the FFELP community) –Common Record: CommonLine (CRC)  Excellent success at broad implementation of CLR4 – Driven by regulation  Working on adoption of the Common Record: CommonLine XML-based standard

2nd Annual Conference on Technology & Standards 6 CommonLine  CommonLine standards address all data exchanges among participants in the FFELP student loan and alternative loan origination processing –Data layouts –Business rules –Error processing  Until CRC the CL standards were internal and not coordinated externally  CRC was fully coordinated with the PESC Core Components and XML standards

2nd Annual Conference on Technology & Standards 7 Electronic Standards Committee  Other Standards –Common Account Maintenance (CAM) In production among many trading partners (primarily between lenders, servicers, and guarantors) General Account Maintenance – Provides standard updates to information between partners Common Claim Initiative – Electronic pre-claim reporting, claim filing, and claim payment transmittals –Imaged Document Transfer Standard Still being documented

2nd Annual Conference on Technology & Standards 8 Electronic Standards Committee  Bottom Line on Standards –Everyone agrees that they are important and valuable –Adoption of standards is driven by self-interest as well as overall benefit to customers doing business with multiple providers How should providers compete –Data and transport protocols? –Customer service and value added services? What is needed to compete effectively What are the competing priorities

2nd Annual Conference on Technology & Standards 9 Committee Structure – How it Works  The standing committee consists of about 50 voting organizations  Fully collaborative work efforts  Work, discussion, proposals, votes  ESC does not make policy, but provides data standards to facilitate the implementation of policy.  Strength of the committee is the work of its advisory teams  Teams are composed of committee members or other subject matter expert volunteers

2nd Annual Conference on Technology & Standards 10 Committee Structure – How it Works  The Advisory Teams are –Origination Standards Advisory Team –Testing and Certification Advisory Team –General Account Maintenance Advisory Team –Default Aversion and Claims Advisory Team –Electronic Exchange Advisory Team –School Advisory Team –Training and Communications Advisory Team  Each team has diverse membership and two co- chairs (generally representing different types of organizations)  This is where the real detailed work is done

2nd Annual Conference on Technology & Standards 11 Committee Structure – How it Works  Origination Standards Advisory Team –About 80 members –Develops and maintains all origination processing data exchange standards –Creates and maintains implementation Guides –Covers all origination processing including changes and disbursements –Resolves reported issues –Weekly conference calls to address issues and other needs

2nd Annual Conference on Technology & Standards 12 Committee Structure – How it Works  Testing and Certification Advisory Team –About 27 members –Develops and maintains standard test tools available to all participants –Tools used to perform testing that will reflect the intended results and interpretations of requirements –Available for CLR5 and for CRC –Sets certification rules for standards compliance

2nd Annual Conference on Technology & Standards 13 Committee Structure – How it Works  General Account Maintenance Advisory Team-GAMAT –About 57 members –Develops and maintains the General Account Maintenance Records in the CAM standard –Coordinates the standard with Program Operations and the DACAT  Default Aversion and Claims Advisory Team-DACAT –About 53 members –Develops and maintains the Default Aversion and Common Claim Initiative Records in the CAM standard –Developed the Image Document Transfer Record –Coordinates the standard with the DACS workgroup from the Program Operations Committee

2nd Annual Conference on Technology & Standards 14 Committee Structure – How it Works  School Advisory Team –About 35 members –Special advisory team made up of school representatives –Used by other teams/committees to review ideas and processing concepts –Brings forward school concerns to be addressed –Works with ED on various policy and practice questions

2nd Annual Conference on Technology & Standards 15 Committee Structure – How it Works  Electronic Exchange Advisory Team (EEAT) –About 30 listserv members –The most purely technical of the teams –Sets data exchange and encryption standards for the FFELP industry –Has devoted much time and resource to support development of the DTS  Communication and Training Advisory Team-CAT –About 12 members –Publishes a quarterly newsletter, CommoNews –Looks for agenda opportunities at industry conferences –Performs membership surveys –Maintains standards readiness tracking documents

2nd Annual Conference on Technology & Standards 16 Committee Structure – How it Works  Quarterly three-day meetings –Days one and two are set aside for Advisory Team meetings –Day three is the formal meeting of the ESC voting members –The meetings are open to NCHELP members  ESC efforts are supplemented by ad hoc work groups –E-sign Standards Workgroup

2nd Annual Conference on Technology & Standards 17 Committee Structure – How it Works  Committee co-chairs work across other NCHELP committees to make sure ESC efforts are coordinated at the levels these other committees address –Program Operations –Program Regulations –Debt Management –Legal Affairs –Member Education and Training

2nd Annual Conference on Technology & Standards 18 Current Major Efforts  Finalize the Imaged Document Transfer Standard and submit it to PESC  Continue support for all currently published and in production standards  Continue support of movement to the CRC standard –Training –Issue resolution –Development and execution of a controlled beta test –Submit the standard to PESC  Support the development of the DTS

2nd Annual Conference on Technology & Standards 19 PESC FSA NCHELP ESC Collaboration

2nd Annual Conference on Technology & Standards 20 Software Providers  Commonality  Camaraderie  Focus on constituents and their customers –Administrators –Students, parents –FSA, lenders, etc.

2nd Annual Conference on Technology & Standards 21 Software Providers  Challenges –Data format standards –Staggered implementation –Adoption and ongoing support  Technology standards –Constantly emerging technology –Which standard will survive? –Adoption of a standard

2nd Annual Conference on Technology & Standards 22 Software Providers  Changing business models –Traditional models School to guarantor Servicer model (ASP) Department of Education Student Aid Delivery System –Regulatory and processing changes Federal CommonLine Customer requests

2nd Annual Conference on Technology & Standards 23 Software Providers  Define a vision  Deliver on defined vision  Monitor needs of the market –Current clients –Prospective clients  Monitor trends in the industry  Utilize resources to be the best stewards of constituents investment dollars

2nd Annual Conference on Technology & Standards 24 Software Providers  Scholarships  Pell  SEOG  Perkins loans  Work study –Federal –Non-federal  FFELP loans*  Direct loans  Alternative loans*  Grants  Fee waivers  Emergency loans  3 rd party contracts  Other resources  Reporting  Communication  Self-service products  Imaging products, etc.

2nd Annual Conference on Technology & Standards 25 Software Providers  XML is the endorsed industry standard of the World Wide Web Consortium  Real-time processing  Streamlined processing for schools  Simplified process for future enhancements  Elimination of redundant data  Efficient utilization of resources industry-wide  Support CRC with these in mind

2nd Annual Conference on Technology & Standards 26 Software Providers  Other projects underway as result of the Common Record initiative: –XML ISIR –Entrance/Exit counseling –Post-secondary transcript –K-12 transcript –Degree audit –State grants/scholarships (wishful thinking!)

2nd Annual Conference on Technology & Standards 27 Software Providers  Importance of PESC and standards –Streamlines product development timeline –Develops more cohesive, industry-wide business approach –Develops culture for working together rather than against each other –Connects previously unrelated and disparate parties into common vision

2nd Annual Conference on Technology & Standards 28 Lessons Learned  Voluntary standards require effective and open collaboration –Collaboration on a large scale requires much work and coordination –Requires cooperation and a common sense of purpose among many different constituents –A vision of the future potential...a need to be able to see the forest in spite of the immediate trees is essential –Collaboration requires some level of trust among collaborators

2nd Annual Conference on Technology & Standards 29 Lessons Learned Continued –All parties must be willing to compromise on behalf of the greater good –Compromise must be balanced –Collaboration requires a commitment to the end product in both its creation and individual company implementations –There must be realistic expectations about implementation timing and urgency –There will nearly always be some push back/questioning of voluntary standards. Meet it head on.

2nd Annual Conference on Technology & Standards 30 Questions

2nd Annual Conference on Technology & Standards 31 Contact Information  Brian Allison, USA Funds  Robert King, Citibank Student Loans  Rhonda Allen, SunGard SCT  Gary Allen, Oracle/PeopleSoft