1. Strategies for Optimizing Student Loan Collections Alan Berrey, VP of Market Development, Text and Mobile Messaging

2. Agenda Challenges facing student loan industry
Use of innovation and automation for collections
Text messaging
Multi-channel communications
Best practices
Use of analytics

3. Challenging Times for Student Loan Industry
Gap between financial aid and cost of college increasing
Cuts in federal subsidies forcing lenders to reduce or end their participation in FFEL program
Historically this has led to an increase in private lending
However, criteria for student borrowing tightening, and
Some students aren’t qualifying for private loans
High default rates among borrowers between ages of 20-30
Lack of: assets, credit history, steady income
Borrowers are difficult to reach/find
More mobile these days
Multiple address changes after college
Lower profitability among lenders means measures must be taken to reduce expenses

4. Use of Innovation and Automation
Student lenders and collectors of student debt need to look for innovative and automated ways to increase contact rates and debt collected
Several approaches that can be used to reduce expenses, increase collections, mitigate risk:
Addition of text messaging as a communications channel
Use of multi-channel communication strategy
Advanced calling strategies and best practices for campaign optimization

5. Text Messaging

6. Mobile Phones Are Not Landlines
Telephony
Voice Mail
Conferencing
Caller ID
Text Msg (SMS)
Extended Msg
Multimedia Msg
Internet
WAP
Pictures
Video
LBS …                 
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7. SoundBite Confidential
Industry Statistics
U.S. has 260 million cellular subscribers, up 25 million in one year. 78% of U.S. population
Over 70% of mobile phone users in the world send text messages
Data contributes 15% of wireless carrier revenue
Data produced $15.2 billion in revenue in 2006, up 77% from 2005
95% of all text messages are delivered within 10 seconds
94% of year olds send text messages
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8. Industry Statistics
Now more Mobile-only than Landline-only homes in U.S.
Demographic data shows clear trend towards mobile for years to come

9. Now is the Time to Start Utilizing Text Messaging
300 15
250
200 10
Landlines
Text Messages Sent per Month
Billions of
Active Telephone Numbers
Millions of
150
100 5
Text Messages
Cellular Lines 50 5
‘96
‘97
‘98
‘99
‘00
‘01
‘02
‘03
‘04
‘05
‘06
‘07
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10. Number Verification Service
Identify your cellular numbers
You can identify cellular telephone numbers in your databases and use the numbers appropriately.
This includes identification of numbers that were moved via number portability.
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11. Free-To-End-User Text Messaging
Free-to-end-user text messaging allows you to send messages to your customers without the recipient incurring a cost.
Reaches 81% of US wireless subscribers:
- Verizon, AT&T, Sprint, T-Mobile
This patent-pending solution is unique to SoundBite and satisfies federal statutes, including TCPA and others.
Important
Free
Message
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12. Benefits of Text Messaging
Text messaging is:
One of the cheapest, or the cheapest, forms of communications available in the world.
Immediate; messages are typically delivered to the intended recipient within 10 seconds.
Discrete; in most cases communications are completely private.
Under utilized by almost all businesses.
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13. Text Messaging Highlights
Low Cost: Reach customers and debtors for less than half the cost of letters and 10% of the cost of traditional telephone calls
Two Way: Text messaging enables immediate two way dialogue
Fast: Delivery occurs in seconds rather than minutes or days as with other communication channels
Mobile: Notification is sent to the only device that is with the customer 24x7
Verifiable: All dialogue is saved and easily retrieved for future use
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14. Text Messaging Highlights (cont.)
Actionable: Customers can respond to text messages immediately on the mobile device via text message or telephone call
No Filtering: Current technology makes it difficult to filter text messages
Dialogue Control: Dynamic telephone dialogue can create issues with customers. Text messages are controlled and predictable
Non-confrontational: Text messages are personal but not offensive or embarrassing. Text messages are neutral for all participants
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15. Ingredients of a Successful Text Messaging Program
Important or time sensitive information
Short and clear communication requirements
Economic benefit to successful communications
Information retention is important (addresses, confirmation numbers, etc.)
Two way communication adds value to the organization
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16. Good Communication Vehicle for Student Borrowers
Text messaging is an effective way to reach students and recent grads
Almost 60% of those in the age bracket have a cell phone only
This group is a big user of text messaging – will pay attention to messages
Text messaging is an emerging communications vehicle that has not been overused at this time

17. Multi-Channel Communications

18. Use of Multi-Channel Communications
Communications through multiple channels drives higher response rates
Phone (AVM)
Text
Use of multiple communication channels enables the most appropriate channels to be used based on:
Message content
Customer preferences
When initiated from a unified platform, will have an enterprise view and management of all communication efforts

19. Use of Multi-Channel Communications
Multi-channel escalation
Allows a single campaign to escalate from one channel to another
i.e. an , to a voice message, to a text message in subsequent contact passes
Multi-channel blending
Allows a single customer interaction to take place across multiple communications channels
Allows customers to receive information through one channel and respond using an alternate channel based on customer preferences

20. Best Practices and Analytics

21. Improving Results of Your Campaigns with Best Practices
Improving key metrics
Penetration rates:
Make multiple passes on lists
Hang up on machines during initial passes
Vary the time of day of the passes
Target different days and times
Consider staffing implications and opportunities
Staffing weekends
Vary caller ID
Very useful for later stage debt

22. Improving Results of Your Campaigns with Best Practices
Right Party Connects:
Call multiple numbers – call escalation
i.e. home, cell, home
Try different vehicles
Combination of voice, text and
2 techniques for right party verification
Simple – self identified
Good for higher risk and older debt where you want to reach lots of contacts
Strict – caller must pass last 4 of SSN or other verification
Generates fewer contacts, but much higher quality
Good for early stage and first pass

23. Improving Results of Your Campaigns with Best Practices
Response rates:
Test different message introductions
Offer an autopay option
Can tie in to payment processor to provide real-time collection and processing of payments
Vary the voice talent
Vary the script wording
Move the payment option to earlier in the script
Test and measure, test and measure, test and measure!

24. Use of Analytics
Both predictive and performance analytics can be applied to your communications strategy to evaluate:
Response by call pass
Mobile vs. landline
Voice vs. text vs.
Best day of week
Best time of day
Behavior by balance
Escalation analysis

25. Contact Information
Alan Berrey VP of Market Development, Text and Mobile Messaging Debbie Braunert VP of Market Development