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Slide 1© Student Lending Analytics, LLC Student Lending Analytics Direct Lending Transition Process May 19, 2010
Slide 2© Student Lending Analytics, LLC Flash Survey: Direct Lending Transition Process Background Situation: With the July 1 st deadline to implement DL looming, this survey seeks to garner feedback from the financial aid community to assess the progress they are making towards the deadline as well as providing feedback to continue to improve the process Survey Goals –Assess the level of satisfaction of schools transitioning to Direct Lending –Identify ideas to improve the process –Determine the degree to which schools are requesting technical assistance and their satisfaction with the process –Identify key resources that schools have identified to assist them in the implementation process – Assess the degree of confidence that schools have in implementing the process on time
Slide 3© Student Lending Analytics, LLC Flash Survey: Direct Lending Transition Process Methodology ed flash survey on May 14 th with due date of May 17 th 2010 In addition to demographic questions, the survey asked respondents the following questions: –Describe your overall level of satisfaction with the implementation process to date. –Have you requested additional resources from your "point of contact" or other Dept. of Education representative to assist you in the implementation process? What resources did you request to assist your institution in implementing Direct Lending (please be as specific as possible)? Was your request granted? How quickly were you able to get a response on whether your request for additional resources would be granted? –CHECK ALL THAT APPLY. My institution (either myself or other staff members) has already taken the following steps to prepare for Direct Lending:
Slide 4© Student Lending Analytics, LLC Flash Survey: Direct Lending Transition Process Methodology Questions asked (continued): –What single resource has been most helpful to you and your team? –Describe your level of confidence that the factors described below will be ready by the July 1st deadline: Financial aid management systems ability to process Direct Loans Student and parent understanding of process changes Readiness of other departments on campus (business office, grants, etc.) –Please describe any other factors that would hinder your institution's ability to implement the Direct Loan program by July 1st.
Slide 5© Student Lending Analytics, LLC Flash Survey: Direct Lending Transition Process Methodology (Cont.) Responses were normalized for following reasons: – addresses that did not correspond with an educational institution were excluded –Several schools provided multiple responses; only one response was analyzed –Responses that included demographic data but incomplete answers to main survey questions were excluded Overall, there were 212 survey responses analyzed –The question that asked the respondents to indicate their level of confidence in processing a Direct Loan and other issues was redesigned in the middle of the survey so only 62 responses were included in the results
Slide 6© Student Lending Analytics, LLC Flash Survey: Direct Lending Transition Process Summary Overall, 83% of respondents rated their level of satisfaction as Acceptable or higher when it came to their direct lending implementation process to date. Among the most popular financial aid management systems (FAMS), respondents were least satisfied with PowerFAIDS with 67% of respondents rating their satisfaction as Acceptable or higher while Banner (91%) and DataTel (90%) were most highly rated. –Home-grown systems also showed low levels of satisfaction (69%) Graduate programs had the lowest level of satisfaction with only 50% rating their implementation experience as Acceptable or higher. Over 1/3 (35%) of participants have requested additional technical resources to assist in their implementation –While six out of seven requests have been granted, 30% of requests have not received an answer yet
Slide 7© Student Lending Analytics, LLC Flash Survey: Direct Lending Transition Process Summary In terms of confidence level, survey participants were: –Most confident that they would be able to process Direct Loans by July 1 st with 89% being very confident (50%) or confident (39%) that they would accomplish by this deadline –Least confident that parents and student borrowers would understand the process changes with only 21% being very confident and 58% being somewhat confident that they could navigate the shift to Direct Lending Over 80% of schools have completed these steps to prepare for Direct Lending, while only 16% have hired a consultant –Participated in DL webinars –Reviewed Department of Educations Direct Lending website –Developed communication strategy for parents and student borrowers The three most valuable resources for survey participants were peer/mentoring relationships, Dept. of Education (website, webinars and point of contact) and software vendors
Slide 8© Student Lending Analytics, LLC Flash Survey: Direct Lending Transition Process Profile of Survey Participants
Slide 9© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Overall Level of Satisfaction Survey question: Describe your overall level of satisfaction with the implementation process to date. Source: SLA Flash Survey: Direct Lending Transition Process, May 2010
Slide 10© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Level of Satisfaction (By FAMS System) Note: Percentage of respondents indicating level of satisfaction as Acceptable, Satisfied or Very Satisfied Source: SLA Flash Survey: Direct Lending Transition Process, May 2010 Sample size:
Slide 11© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Level of Satisfaction (By School Type) Note: Percentage of respondents indicating level of satisfaction as Acceptable, Satisfied or Very Satisfied Source: SLA Flash Survey: Direct Lending Transition Process, May 2010 Sample size:
Slide 12© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Ideas For Improvement Reporting issues –It is difficult to tell who has completed MPN and Entrance Counseling requirements Webinar recommendations –Better detailed instructions versus so many webinars –It would have been helpful to learn a process: for example, how to originate a loan with step by step instructions –The trainings should be recorded and on-demand Websites –More up to date information on various DL web sites –…One click links to apply for MPN for the student, student friendly messages on the loan sites.
Slide 13© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Ideas For Improvement Software issues –We ran into a lot of technical issues while trying to set up ED Express and the various counseling reports. (Regent FAM user) –It would be nice to have step by step instructions on how to do the process through EdExpress. –Apart from software vendor not being up to date with the new schema for XML yet, it would be nice if the search functions within COD worked. (PowerFAIDS client) –We have a home grown system and the implementation is very time consuming and burdensome. –The unsatisfaction mainly pertains to SunGard, the Banner software company. They didn't seem to have "done their homework" before rolling out their system upgrades for the school year. –The Department of education needs to understand that all schools do not have a canned system. They need to have a team to evaluate the needs of non-traditional solutions. (Home Grown user)
Slide 14© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Ideas For Improvement PLUS Loans –Federal Direct PLUS Loans have been a sore spot with a slow rollout of the studentloans.gov PLUS Loan function. –Improve Plus application to include loan period, request for endorser with application, and of who receives the refund. Point of Contact issues –When assigned a COD "point of contact", we'd like to be represented; he's difficult to contact and provides few answers to our questions. –I haven't yet been contacted by a rep. I'm unsure whether to contact ED, COD or regional office for guidance. –My on-boarding person was not very responsive to my phone call messages Reconciliation process –Assistance for schools with the reconciliation process and software that helps identify differences between COD and the school.
Slide 15© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Ideas For Improvement Understanding of student experience –It would be helpful it DOE had tutorials we could watch that would show us what students see when the log into studentloans.gov. and go through the steps of completing the entrance and MPN. Testing issues –DOE should make sure there are enough employees available to test send/receive files. We continue to wait on the progression of files sent to DOE while DOE employees are in training per our coordinator with Direct Lending. –Being able to take a test record "completely" through the entire process. Currently, we're able to test up to a certain point, but not completely through a simulation of disbursement. –Very poor follow-up from COD regarding test files sent. Due to time limitations, and their lack of call backs and follow-up, we were unable to test with test data but instead must test with live data.
Slide 16© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Need for Technical Resources 35% of schools have requested technical resources from their point of contact. –60% had their request granted, while 30% are still awaiting an answer –Most requests were technical questions and not staffing related A sampling of school requests for technical assistance include: –G5 set-up process –Testing –Encryption software –Information on non-functional PLUS applications –Banner training consultant –Retrieving credit approval report for PLUS Loans –Consultation with other like schools with home-grown information systems –Assistance with effective way to implement EDConnect via a server –Consultants
Slide 17© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Need for Technical Resources Several requests for additional staffing resources were either awaiting a response or turned down: –3rd party transition service assistance –Specific assistance for implementation –We have requested a temporary staff member to assist over the summer. Our rep from DL is not very responsive and seems rather annoyed when we ask questions. –Turned down request for: Operational funding, dedicated systems set-up representative
Slide 18© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Turnaround Times For Resource Requests Survey question: How quickly were you able to get a response on whether your request for additional resources would be granted? Source: SLA Flash Survey: Direct Lending Transition Process, May 2010
Slide 19© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Steps Taken To Prepare For Direct Lending Survey question: CHECK ALL THAT APPLY. My institution (either myself or other staff members) has already taken the following steps to prepare for Direct Lending: Source: SLA Flash Survey: Direct Lending Transition Process, May 2010
Slide 20© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Three Most Helpful Resources Peers –Peers who have already transitioned to DL –Peer School visit to see how the process actually runs within an office. –Other schools sharing their process and experiences has been very helpful. –Utilizing the National Direct Student Loan Coalition's website has been a huge help. Dept of Education –Our Department of Education rep was very helpful in helping us set up our branch campus to process DL. She also helped us along, proactively calling to make sure we completed all steps (bank account, COD, etc.) –Definitely our ED DL liaison. –My Department of Ed contact and other schools that are DL with the same software are tied. –Department of Ed training webinars Software vendors –Attending a Banner webinar on DL, which we paid for –Sessions at Datatel conference –The SCT conference in California in April –PeopleSoft listserv
Slide 21© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Financial Aid Administrator Confidence Levels Survey question: Describe your level of confidence that the factors described below will be ready by the July 1st deadline: Note: Sample size for this question is 62 due to change in survey design on second day of survey Source: SLA Flash Survey: Direct Lending Transition Process, May 2010
Slide 22© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Other Observations Success requires a team effort: –The Business Office's attitude is... it's all the FAO's work now! –We are a little uneasy as to whether the business office will be ready Testing was an issue that came up frequently: –Lack of testing options for summer term –The slow response of the department to getting our testing complete within our time frame; shades of things to come... Costly to implement: –We're being forced to stretch an already overworked IT and Operations staff. We're working on 2 Pell grants in a year, all of the new disclosures, figuring out funding formulas without ACG/SMART. There's just be a tremendous amount of transition and change over the last two years. We'll get the transition done; however, it's the other priorities that we had to set aside that will suffer. I'm also surprised this survey didn't ask about how much the transition is costing. In real dollars we have spent about $15,000 for mailings and brochures. In administrative costs, for overtime pay, staffing, answering phones, etc., the cost has yet to be determined but will be quite expensive.
Slide 23© Student Lending Analytics, LLC SLA Flash Survey: Direct Lending Transition Process Other Observations Some skepticism and frustrations with COD system: –Lots of glitches at the Dept; issues with COD search of MPN's, COD site down, changing status code of MPN without telling FAM's so its not supported. I'm not confident COD can handle the volume. –I am having a difficult time, trying to view individual records on the COD website. Problem with the software. Significant effort to get students to sign new promissory note: –Our processes were very easy. It is an effort to get students to complete a prom note. Others on campus did not initially understand their part in the process.
Slide 24© Student Lending Analytics, LLC Thank You Thank you again for your participation! Please contact Tim Ranzetta if you have any additional comments or questions regarding this survey –Send to –Phone: Look for more upcoming SLA Flash Surveys in the future –Please provide us with topics that matter to you! For more information on Student Lending Analytics, proceed to the final six slides
Slide 25© Student Lending Analytics, LLC Student Lending Analytics Background Founded in 2007 Independent Research and Advisory Service with NO lender affiliations Mission: Find best lenders for students through an analytically rigorous, unbiased and comprehensive process Services –RFI Management of FFEL and Private Loans –Research Successes to Date –Managed RFI process at institutions with over one billion dollars in loan volume –Inside Student Lending, our monthly newsletter, reaches over 5,000 financial aid administrators –Student Lending Analytics Blog has become the go-to source for breaking developments and analysis on the student lending industry –SLA Flash Surveys have included the insights from over 1,500 financial aid professionals on a variety of timely topics –Dozens of Schools Linking To Private Loan Options and SLAs 2009 Private Loan Guide which provides students and financial aid offices with an objective and focused list of lenders –SLA Student Satisfaction Surveys measures student satisfaction with lenders
Slide 26© Student Lending Analytics, LLC Unlocking the Mysteries of Private Student Loans Student Lending Analytics: Resources Available SLA Private Student Loan Ratings 2009 SLA Private Loan Series –2009 SLA Private Loan Guide Paying For College Blog Student Satisfaction Surveys Coming Soon: Private Loan Quiz
Slide 27© Student Lending Analytics, LLC Unlocking the Mysteries of Private Student Loans Private Student Loan Ratings Available at Featured on front page of New York Times BusinessNew York Times Business Focused on evaluating eight lenders that appeared most frequently on over 700 school lender lists that SLA researched Includes the following factors in ratings: –Expected loan cost –Borrower benefit savings –Fee structure –Flexibility of repayment options –Customer service –Financial stability SLA receives no compensation from any lenders on this list New Service: Private Loan Insights to capture real-time information about interest rates and approvals
Slide 28© Student Lending Analytics, LLC Unlocking the Mysteries of Private Student Loans 2009 SLA Private Loan Series Most popular post: Shopping for Private Student Loans Makes a Difference!Shopping for Private Student Loans Makes a Difference! –Results from 6 student loan applications yields interest rates between 7% - 12% Before You Apply for a Private Student Loan –Provides checklist of items to complete prior to considering a private student loan What About Credit UnionsWhat About Credit Unions? –Explores the increasing role that credit unions are providing in the private student loan market "Miss A Payment On Your Private Student Loan, You Could See Your Interest Rate Rise" –Highlights two lenders that have clauses in promissory notes which could result in 2% increases in interest rates triggered by one late payment Borrower Benefits on Private Student Loans –Provides examples of savings opportunities available to private loan borrowers What Ingredients Go Into the "Secret Sauce"? –Insights into the factors that lenders consider in making their credit decisions Does It Make Sense To Shop Around For Private Student Loans? –Provides details on new Fair-Isaac policy about the impact of applying for multiple student loans on your credit score (hint: it helps student borrowers) The Promissory Note –Highlights the key terms to be aware of when evaluating lender promissory notes What is the Meaning of "Instant Credit Response"? –Reviews the on-line application process and analyzes the speed of lender credit reviews Private Loan Fee Structure –Benchmarks most common fees assessed by private lenders for both origination and servicing of loans
Slide 29© Student Lending Analytics, LLC The Student Lending Analytics Process RFI Management
Slide 30© Student Lending Analytics, LLC Student Lending Analytics Research Services Inform financial aid offices on industry developments (implications for their lender lists and relationships) –Student Lending Analytics BlogStudent Lending Analytics Blog Key resource for thousands of professionals in the student lending industry Timely insights to developments in student lending industry –Alerts Legislation, lender exits, earnings calls, industry insight –Monthly newsletters –Webinars December 2008 – A Conversation about FFELP and Direct Lending May 2009 – Unlocking the Mysteries of Private Student Loans –Surveys (summaries available on our website)website FFEL vs. Direct Lending RFI Practices Implementing Increased Federal Stafford loan limits Availability of Alternative Loans –Legislative and regulatory updates –White papers –Help Line to answer questions/resolve issues throughout the year
Slide 1© Student Lending Analytics, LLC Student Lending Analytics Flash Survey: FFELP and Direct Lending July 27, 2009.
Slide 1© Student Lending Analytics, LLC Student Lending Analytics Flash Survey: Financial Aid Counseling June 22, 2009.
Slide 1© Student Lending Analytics, LLC In The Trenches: What Financial Aid Administrators Think This presentation does not constitute formal policy or.
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