1 Session DL-02 Direct Loan Servicing Fundamentals Cynthia Battle U.S. Department of Education

2 Agenda Direct Loan Servicing Update  Facts and Figures  CCRAA Changes  Outreach Activities  Customer Satisfaction Survey Direct Loan Servicing Borrower Tools Direct Loan Servicing School Tools

3 Portfolio Statistics 6.6 Million Active Borrowers Total Direct Loan Borrowers Population Status In School In Grace In Repayment 1,526, ,859 3,567,185 In Deferment 713,705 In Forbearance 498,422

4 Portfolio Statistics

5 Direct Loan Payments For the month of June 2008, the percentage of borrower payment transactions received in paper format by the DLSC was only 38.2%. July 2008 Checks – 35.2% EDA – 35.8% Direct Loan Web – 18.7% Aggregator Web – 10.3%

6 Electronic Services Electronic Bill Presentment Only Electronic Bill Presentment + Correspondence Electronic Correspondence Only Electronic Correspondence + Electronic Debit Account Electronic Debit Account Only The Direct Loan Servicing program just celebrated over 2 billion dollars processed through the web site since online payments were made available, not including third party payments. Over 8,281,679 transactions have been processed with an average value of $

7 Delinquency

8 Consolidation Peak Planning Capacity Planning included: Application volume forecasting based on previous year’s data Analysis of the interest rate trends and forecasting interest rates that would be in effect for July 1 Adding additional systems capacity to receive web applications Adding additional call center representatives and back office workers to handle a small volume increase that was forecast

9 Consolidation Peak Planning Results: This year’s summer consolidation peak was very small, as forecast. Decreases in interest rates, as occurred this year, usually cause increases in applications after July 1 when the interest rate changes We have seen an increase application volume since July 1 We were able to handle volumes in all operational areas without problem

10 Loan Consolidation Peak Loan Consolidation –LC bookings decreased in June because we held loan applications to allow borrowers to take advantage of the falling interest rates –The total June/July 2008 bookings of 41,720 exceeded the 2007 volume by 12,638 for the same two-month period

11 Direct Loan Servicing Update  Facts and Figures  CCRAA Changes  Outreach Activities  Customer Satisfaction Survey Direct Loan Servicing Borrower Tools Direct Loan Servicing School Tools

12 CCRAA / Regulatory Changes Military Deferment Public Service Forgiveness Economic Hardship Total and Permanent Disability

13 CCRAA / Regulatory Changes TEACH Grant Income Based Repayment (IBR) –effective July 1, 2009 ICR for Graduated PLUS – effective July 1, 2009

14 Direct Loan Servicing Update  Facts and Figures  CCRAA Changes  Outreach Activities  Customer Satisfaction Survey Direct Loan Servicing Borrower Tools Direct Loan Servicing School Tools

15 Delinquency Management Pre-Repayment Counseling Calls made two months prior to entering repayment s sent to assist with repayment options Delinquency Counseling –31 days we begin a series of calls (22 calls) –Letters begin at 7 days delinquent (12) Call Campaigns - High balance calls (balance of 80K or greater)

16 Direct Loan Servicing Update  Facts and Figures  CCRAA Changes  Outreach Activities  Customer Satisfaction Survey Direct Loan Servicing Borrower Tools Direct Loan Servicing School Tools

17 Customer Satisfaction Survey 250 interviews of Direct Loan Servicing customers conducted by phone from 7/11/08 through 7/20/ Electronic Debit 100 Paper 50 E-Bill customers Results weighted in proportion to customer population 64% Paper 5% E-bill 31% Electronic Debit

Direct Loan Servicing Model Confidence Customer Satisfaction Index Complaints Call Center Representative Courtesy Willingness to help Knowledge Ability to answer your questions Time to resolve inquiry Operating hours of service center Website Ease of logging in Clarity of organization Ease of navigating Accuracy of information Ability to find information you needed Usefulness of website tools Electronic Debit Accuracy Convenience Reliability Voice Response Unit Clarity of menus Ease of using the system Time it takes to navigate System’s ability to answer questions Ability to accomplish what you want to Statements Accuracy of balance Accuracy of information about past payments Ease of reading the statement Amount of information provided Consistency in when you receive statements Amount of time given before payments due Overall satisfaction Satisfaction compared to expectations Satisfaction compared to ideal Customer Satisfaction Survey

19 Customer Satisfaction Survey Score Impact Confidence Customer Satisfaction Complaints Statements Website Voice Response Unit Call Center Representative 87 3% Electronic Debit

20 Satisfaction levels holding steady =Significant Difference vs. 2007

21 Satisfaction Benchmarks Federal Government DL Servicing remains among the highest satisfaction services in the Federal Government

22 Satisfaction Benchmarks Private Sector DL Servicing has satisfaction levels comparable or superior to private sector financial services

23 Survey Highlights Direct Loan Servicing continues to garner very high levels of customer satisfaction Call Center Representatives and the VRU remain the key action areas for further improvements Score for Electronic Debit are as close to “perfect” as they are likely to get; high impact implies that customers expect FSA to keep it this way Website scores up thanks to improved perceptions among Paper statement customers, but some potential “early warning” signs from E-Bill customers

24 Direct Loan Servicing Update  Facts and Figures  CCRAA Changes  Outreach Activities  Customer Satisfaction Survey Direct Loan Servicing Borrower Tools Direct Loan Servicing School Tools

25 Benefits to Borrowers Repayment incentive Repayment options tailored to individual need (Standard, Extended, Graduated, Income Contingent, Alternative Repayment) Payment due date selection by borrower Options for receiving bills and/or correspondence electronically Electronic Payments (EDA and on-line) Self-Service tools for borrowers (telephone voice response system, Web portals) Online form submission with electronic PIN signatures (forbearance, deferments, EDA, FAFSA) Loan Consolidation

26 Direct Loan Servicing Web Sites For Borrowers - Real Time Account Information Online Transaction Processing - Borrower Self-Service Online Counseling and Rules Based Messaging Interactive Pre-qualifier for Deferment and Forbearance Requests including online submission with eSignatures Online payments Electronic Mail Services EDA Enrollment Online Calculators Online Surveys For Schools - Student Account Lookup Online Reports – Portfolio, Delinquency and Counseling Complete Question Center For Borrowers - Real Time Account Information Online Transaction Processing - Borrower Self-Service Online Counseling and Rules Based Messaging Interactive Pre-qualifier for Deferment and Forbearance Requests including online submission with eSignatures Online payments Electronic Mail Services EDA Enrollment Online Calculators Online Surveys For Schools - Student Account Lookup Online Reports – Portfolio, Delinquency and Counseling Complete Question Center

27 Key Features Highly Secure PIN protected Data encryption Section 508 Compliant for borrowers with disabilities English/Spanish option for entire site Online Tour – tutorial to aid borrowers in using site Search Feature & Site Map helps borrowers find what they need quickly Borrower Web Site Homepage – dl.ed.gov

28 Borrower Web Site Personalized Online Messages Key Features Personalized messages are displayed to borrowers based on their account status and other information. Messages include information about last and next payment, options for delinquent borrowers, and special information as the need arises.

29 Borrower Web Site Account Summary Exit Counseling Click here to view your Non-Direct Loans Borrowers are provided with the amount of their total indebtedness (Direct Loans, FFEL, and Perkins) during Exit Counseling or from the Account Summary page.

30 Borrowers may select one of our four repayment plans: Standard Extended Graduated Income Contingent Repayment (ICR) Borrowers may also select from any of the four available due dates: 7 th, 14 th, 21 st, or 28 th Borrower Web Site Payment Due Date

31 Direct Loan borrowers can receive their bills and make payments online; and they can choose to receive their Direct Loan correspondence electronically, all for free. Borrower Web Site Bills and Payment

32 Borrower feedback: I just wanted to congratulate you on providing an excellent way to manage my student loan account. I cannot tell you how much simpler it is for me, knowing I can do everything I need on-line. I don't have to mail anything or call someone -- I just need to log in. - Troy Over 1MILLION borrowers are receiving a.25% incentive by enrolling in EDA! Borrower Web Site Electronic Debit

33 Borrowers can submit Unemployment Deferment and General Forbearance applications online. Borrower Web Site Online Form Submission

34 Borrower Web Site Entrance and Exit Counseling

35 Direct Loan Servicing Update  Facts and Figures  CCRAA Changes  Outreach Activities  Customer Satisfaction Survey Direct Loan Servicing Borrower Tools Direct Loan Servicing School Tools

36 School Web Site Homepage – dl.ed.gov/schools

37 School Web Site Welcome Page

38 Click here to see Repayment Estimates School Web Site Student Account Lookup

39 School Web Site Entrance and Exit Counseling Reports

40 Summary Delinquency Report Late Stage Delinquency Report School Web Site Delinquency Reports

41 Contact Direct Loan School Services (School Services) 30-day Demand Letters Cohort Default Assistance Delinquency Management Assistance Exit Counseling Interview Materials NSLDS/Clearinghouse SSCR/Student Enrollment Account Status Web Assistance

42 Contact Information Thank You! We appreciate your feedback and comments. Cynthia Battle Phone: (202)