1. Dwight Vigna Education Department 1 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

2. FSA Default Division Goals Goal 1: Be respectful to our borrowers and find the best solution that will resolve the borrowers debt regardless of the commission being paid Goal 2: Increase the FSA overall collection rate on a year to year basis even though the inventory is also increasing annually 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida 2

3. Collection Performance 3 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

4. Default Recoveries- In Billions Combined ED FY13 - $18.2$8.51 FY12 - $13.1$3.68 FY11 - $12.0$3.40 FY10 - $10.2 $3.04 FY09 - $8.8$3.07 FY08 - $8.9$3.21 FY07 - $6.9$2.67 4 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

5. FY13 Top Ten By Recovery Rate 5 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

6. FY13 Top Ten by Recovery Rate w/o Consols 6 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

7. FY13 Recovery Rate By Portfolio Combined Program Recovery Rate P&IRecoveriesRecovery Rate GA$32,692,871,368 $9,711,487,39829.71% ED$44,743,366,300 $8,511,512,95219.02% Combined$77,436,237,669$18,223,000,35023.53% 7 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

8. Regular FY13 FY12 GA $759,645,000 $754,654,568 ED $562,750,765 $539,983,209 Totals $1,322,395,765 $1,294,637,777 8 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

9. TOP FY13 FY12 GA $848,556,209 $990,651,634 ED $1,331,685,591 $555,242,177 Totals $2,180,241,800$1,545,893,811 9 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

10. Rehabilitations FY13 FY12 GA $4,736,266,045$4,400,196,618 ED $5,758,179,306$1,761,800,453 Totals $10,494,445,351$6,161,997,071 10 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

11. AWG FY13 FY12 GA $655,890,260 $668,323,580 ED $291,422,130 $345,010,734 Totals $947,312,390 $1,013,334,314 11 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

12. Direct Consolidations FY13 FY12 GA $2,711,129,883$2,584,213,293 ED $567,475,161 $474,247,061 Totals $3,278,605,045$3,058,460,354 12 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

13. FY13 GA Consolidations Highest percentage was 41.31% Lowest percentage was 14.76% Consolidations Total Collections % of Total $2,711,129,883 $9,711,487,398 27.92% 13 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

14. FY13 Top Ten Consolidators 14 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

15. PCA Collection Performance 15 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

16. 16 Collection Performance CPCS #5-11 Avg. - Unrestricted 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

17. 17 Collection Performance Quarterly CPCS #5-11Avg. – Small Business 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

18. Default Portfolio Projections 18 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

19. Portfolio Characteristics September 2013 Size: $55,886,286,405 19 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

20. Collections 3-Year Forecast 20 2013201420152016 Inventory$35.1B$53.3B$66.9B$89.5B Collections$8.65B$10.0B$12.5B$16.9B Commissions$819M$1.275B$1.60B$2.10B Recovery Rate19.02%$18.64%18.68%18.87% 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

21. TOP Processing 21 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

22. The New Faces of TOP 22 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida Cindy Hill Tia Fails

23. Treasury Offset Program PY2013 P&I Certified GA $23,361,109,809 ED $29,810,814,083 Total $53,171,923,892 ED Collections -$1,331,685,591 GA Collections - $ 848,556,209 Total - $2,180,241,800 23 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

24. Treasury Offset Program Certification processing is on schedule Cindy sent the Action Code e-mail GA Certification files are due 11/4 -11/8 Inactivation file will be processed on 11/20/2013 Certification files are sent to Treasury on 12/9/2013 24 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

25. The New Face for Mandatory Assignment 25 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida Jane Bryson

26. IRS Skip Tracing Update We have a signed CMA We have to make system changes in order to use the CMA There will be audits from the IRS on this process New Training must be done for all staff that includes IRS FTI (Federal Tax Information) requirements 26 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

27. IRS Skip Tracing Update Neither ED nor its Contractors (PCA or GA) may redisclose the IRS Address unless legal parameters in the Internal Revenue Code (IRC) (section 6103) are followed, which are in addition to those required by the Privacy Act! 27 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

28. IRS Skip Tracing Update Independent verification Written procedures are completed Legally insufficient Legally sufficient First Party Request Requestor must submit credentials proving they are asking for their own records 28 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

29. IRS Skip Tracing Update Third Party Request with Consent Must use IRS Form 8821 Signature must be within 120 days of current date First and Third Party Request with consent Original request must be maintained for 3 years 29 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

30. IRS Skip Tracing Update Third Party Request Without Consent Must use IRS Form 8821 Personnel withholding request must provide EDs OGC copies of request and the decision to withhold within 1-3 business days If Requestor persists, ED/PCA/GA must notify EDs OGC within 1-3 business days of continued demand 30 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

31. New Contracts 31 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida

32. DMCS O&M Contract Awarded on 9/30/2013 to Maximus Federal Services, Inc. Stop Work Order Issued on 10/01/2013 Start Work Order Issued on 10/17/2013 10 Year contract with a base period of 2 years and 8, 1-year options 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida 32

33. DMCS O&M Contract Maximus has been around for 40 years They are using IBM, FICO and Omni Systems for development Exeter is being used for financial reconciliation Xerox is being used for data center and back-end processing 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida 33

34. DMCS O&M Contract The Xerox contract was given an extension for 6 months, June 30 2014 The transition planning has already begun The current date for the transition is March 1, 2014 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida 34

35. DMCS O&M Contract How does this affect the GAs? – No changes today – There will be a transition of the data center at some future point 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida 35

36. PCA Contracts Procurement is currently going on for the Small Business pool and the Unrestricted Business pool The proposed time frame for Awards is January 2014 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida 36

37. 37 2013 Knowledge Symposium November 5-7, 2013 St. Pete, Florida Questions?