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Put Process and Servicing Federally Held Loans. Agenda Put Loan Overview Put Process Timeline School Resources Questions.

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Presentation on theme: "Put Process and Servicing Federally Held Loans. Agenda Put Loan Overview Put Process Timeline School Resources Questions."— Presentation transcript:

1 Put Process and Servicing Federally Held Loans

2 Agenda Put Loan Overview Put Process Timeline School Resources Questions

3 Put Loan Overview

4 Put Loan Background 2007: Lender difficulty creating new loans –College Cost Reduction Access Act (CCRAA) –National credit crisis Ensuring Continued Access to Student Loans Act (ECASLA) – May 2008 –Put Program – Temp authority to purchase –Created a secondary market for lenders

5 Put Loan Process Overview Lenders sell FFELP loans to the U.S. Department of Education (ED) –If fully disbursed prior to September 30 of that year –Falls within eligibility dates When loan is sold: –Remains true to the MPN –Still classified as a FFELP loan –FFELP guaranty no longer exists –Owned and serviced by ED

6 Eligibility Dates ECASLA I (08-09) –First disbursement is on or after 05/01/2008 but before 07/01/2009 –Loan is fully disbursed by 09/30/2009 –Academic period for the loan includes 07/01/2008 or begins after 07/01/2008

7 Eligibility Dates ECASLA II (09-10) –First disbursement is on or after 05/01/2009 but before 07/01/2010 –Loan is fully disbursed by 09/30/2010 –Academic period for the loan includes 07/01/2009 or begins after 07/01/2009

8 Program Scope According to SLA analysis, over 85% of FFELP loans will be sold to Department –Based on Department data published September 15, 2009 $20.1 billion sold to the Department Additional $30.3 billion to be sold in next 45 days $50.4 in total sales to Department of Education figures

9 Program Scope –Total FFELP $58.7 billion –Consistent with recently released Department of Education figures Source: Student Lending Analytics Blog Posted September 20, 2009

10 Put Servicers ECASLA I: ACS ECASLA II: Four additional servicers - Great Lakes Higher Education –AES/PHEAA –Nelnet –Sallie Mae

11 Put Process Timeline

12 Day 45 – Day 10: Start Put Process Day 9: Adjustment Cutoff Date Day 0: Anticipated Put Date

13 Put Process Timeline Day 45 – Day 10 –GL is assigned Notice from ED We contact seller to discuss details of sale –Lenders not required to notify schools of loans identified for sale

14 Put Process Timeline Day : Changes Allowed –All changes are still possible during this time Changes processed same as any other FFELP loan Original service provider should be able to process changes sent which do not contain errors - Grade Level - LP Begin & End Dates (not outside of Put criteria) - Reinstatements - Reissues - Loan Increases - Additional Disbursements - Reallocations - Refunds - Refund Reversals (only for correcting mistakes) ▪returned in error ▪returned to wrong account ElectronicManual

15 Put Process Timeline Day 9 - 1: Adjustment Cutoff Date (Day 9) –Current Servicer sends loan transfer file to GL (as ED Put Servicer) –Work w/seller & current servicer to resolve discrepancies –Once loans are verified, GL receives Bill of Sale from selling lender Bill of Sale is official document that transfers ownership to ED

16 Put Process Timeline Day 9 – 1: Changes Restricted –Some Change Transactions CANNOT be performed on or after Adjustment Cutoff Date (Day 9) ALLOWED: -Grade Level -LP Begin & End Dates (not outside of Put criteria) -Refund Reversals (only for correcting mistakes) -Reallocations -Refunds NOT ALLOWED: -Reinstatements -Reissues -Loan Increases -Additional Disbursements Electronic Manual

17 Put Process Timeline Day 0: Anticipated Put Date –Date the loan is scheduled to be transferred to ED (Put Servicer) –Our system sends CL notification to schools Informing them of transfer Letting them know to communicate with GL as servicer –With the exception of ELM

18 Put Process Timeline Day 0 & Beyond: Changes Limited –From this point on, changes cannot be processed by original service provider –We send CL response confirmation when schools submit allowable change transactions for processing ALLOWED: -Grade Level -LP Begin & End Dates (not outside of Put criteria) -Refund Reversals (only for correcting mistakes) -Reallocations (both loan types must be Put & already exist w/same disbursement dates. Need to have same unique IDs to process electronically) -Refunds NOT ALLOWED: -Reinstatements -Reissues -Loan Increases -Additional Disbursements Manual Electronic

19 Borrower Perspective Day 0: Anticipated Put Date –What does the Borrower see? Borrower Notification Letter (welcome letter) GL Previously Serviced; GL Put Servicer (sample John Doe letter) Non-GL Previously Serviced; GL Put Servicer (sample Jane Doe letter) Other resources: –mygreatlakes.org for account information, etc. –NSLDS for verification of where all loans are serviced

20 Borrower Perspective Day 0 –Sample John Doe Letter sent to borrower once put loan is loaded to our system if GL was previous Servicer & is now Put Servicer –Letter Explains: Loan has been put to ED GL will still service loan & send updated payment statements if needed They may have other loans with lender not affected GL contact & payment information

21 Borrower Perspective Day 0 –Sample Jane Doe Letter sent to borrower once Put loan is loaded to our system if GL was NOT previous servicer & is now put servicer –Letter Explains: Loan has been put to ED GL will now service loan & send payment statements if needed They may have other loans with lender not affected GL contact & payment information

22 Change Transaction Dates Type of Change TransactionDate Restriction ReinstatementsNot allowed on or after adjustment cutoff date (day 9). ReissuesNot allowed on or after adjustment cutoff date (day 9). Loan IncreasesNot allowed on or after adjustment cutoff date (day 9). Grade LevelNo date restrictions. Additional DisbursementsNot allowed on or after adjustment cutoff date (day 9). Loan Period Begin and End Dates No date restrictions unless the change would move the loan outside of eligible put criteria. Reallocations No date restrictions. However, both loans must be serviced by the same put loan servicer and must have disbursed on the same date. Refunds or CancellationsNo date restrictions.

23 NSLDS NSLDS allows schools to verify when a loan was sold to the Department Loans are only indentified as being sold to the Department after the sales date and NSLDS has been updated

24 NSLDS Select AID tab Select borrower A list of loans for the borrower displays If the loan is sold to the Department –Dept of Ed (Guarantor) in the GA field –Department of Ed (Servicer) in the Servicer field Click Loan Detail. –The GA/Lender/Servicer Agent History page with a web link to current servicer

25 Loans put to ED, guaranteed by ED, serviced by Great Lakes This borrower’s loans 1 and 2 are guaranteed by ASA, with Chase as lender. Loans 3 and 4 have been put. School View of NSLDS

26 Click on Loan Detail to see guarantor/lender/servicer history. * * Loan is part of the Loan Purchase Commitment Program Click the underlined blue name to see contact information for the entity. See next page… School View of NSLDS

27 Dept. of Ed/Great Lakes information Dept. of Ed information Client Services and Borrower Services are main contacts.

28 Borrower Path to NSLDS 2. Enter Social security number First two letters of last name Date of birth FAFSA PIN (Personal Identification Number) 1.Go to

29 Borrower View of NSLDS Loan Menu Loan Detail Click the aqua number boxes to see loan detail. Put information displays here.

30 Put Loan Servicer Codes ACS , GA code 577 Sallie Mae , GA code 578 PHEAA , GA code 579 Great Lakes , GA code 581 Nelnet , GA code 580

31 School Resources

32 Put Loan Servicing Page mygreatlakes.org –Click Great Lakes Servicing Federal Student Loans

33 Put Loan Servicing Page Resources –Great Lakes Servicing Overview: Put Loans Details put process and how to identify and work with put loans –List of contacts and resources for all put loan servicers –Sample Borrower Notification letter –Federally-Held Loans Serviced by GL Detail Report Provides list of borrowers with put loans serviced by Great Lakes

34 Default Management Borrowers at Risk Report Includes all Stafford & PLUS borrowers now 60 days or more delinquent on loans guaranteed or serviced by GL address, mailing address, up to two phone numbers for each borrower Updated every week

35 Default Management Borrowers at Risk Report Grouped into five categories: 1.) Stafford 320+ days current cohort yr 2.) Stafford < 320 days current cohort yr 3.) Stafford delinquent not current cohort yr 4.) GradPLUS 60+ days delinquent 5.) PLUS delinquent – provides student name

36 Commonly Asked Questions

37 Quarterly Customer Service Performance Results ServicingInfo.htmlhttp://www.ifap.ed.gov/eannouncements/031010Loan ServicingInfo.html

38 Sample Allocations based on Results

39 Questions? Great Lakes Client Services (888) Mike Mutziger Vice President, Marketing and Sales - Northcentral (888) 502 – 5902 x3032


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