1. Special Programs
Cynthia Battle | Dec U.S. Department of Education Student Loan Servicing Summit

2. Session Format Total and Permanent Disability (TPD) TEACH Grant
Public Service Loan Forgiveness (PSLF)
Open Forum (TPD, TEACH, and PSLF)
Direct Loan Consolidation
Open Forum (Consolidation)

3. TPD – Major “Shift”
Historically, TPD processing was one of the major categories of customer service issues tracked by the Ombudsman office.
Over the past few years, there was a substantial shift in the operational process resulting in significant decline in customer issues. Research cases for TPD declined by 34.3 percent in FY14 when compared with the prior year.

4. TPD – Major “Shift”
Factors that contributed to the decline in TPD cases and process improvements:
New regulations effective July 1, 2013, allowed borrowers seeking TPD discharge to apply with a single application directly to FSA
A streamlined application process for some recipients of disability benefits through the SSA
Improved process for TPD with focus on customer service
Redesign and informative web pages which includes online application process
Dedicated call center where our servicer worked to reduce the barriers to TPD application and assist borrowers and their physicians in navigating the application process

5. Key Projects and Planned Improvements for 2014-15
Continue improving customer experience
Decrease TPD application processing time
Evaluate reinstatement process
Borrower communication improvements
Industry education on TPD process

6. TEACH Program Implementation at FedLoan Servicing
July 2013 Implementation
All new TEACH Grants began disbursing directly to FedLoan
August 2013 Implementation
All existing TEACH Grants transferred to FedLoan Servicing

7. Portfolio Overview TEACH Grant Volumes as of September 2014
Volume Type
Total
Unique TEACH Grant Recipients
73,869
TEACH Grants
144,060

8. Portfolio Overview as of September 2014

9. Portfolio Overview TEACH Grant Service Obligations

10. Key Concerns & Issues 2014 Recipient Concerns - Program Confusion
Misunderstanding Agreement-to-Serve
Importance of Certification Response
Recipient Responsibilities (Demographics)
Withdrawn Recipient Requirements
No New Grant Responsibilities

11. Program Challenges
Reasons for Conversion 1. Recipient Requested – Voluntary (17%) 2. Withdrawn Recipient – No response to initial certification requests 3. Withdrawn Recipient – Ineligible response to first annual certification requests (unique to withdrawn recipient) 4. No response (Both Graduated and Withdrawn) 5. Mathematically unable to fulfil obligation
Recipient Request No Time To Cert 64
Cannot Meet Due To No Time Left To Cert 79
Recipient Request Not In Qualified Teach Field
451
Recipient Request Other
601
Recipient Request Does Not Intend To Teach
679
Did Not Certify Intent Or Annual Certification
11,621

12. Program Challenges - Schools
Separation Date Processing
Obligation begins with separation
Differences with Direct Loans
Withdrawn recipients
Graduated recipients
Inactivating enrollment or separation periods

13. Key TEACH Grant Efforts & Improvements1
FedLoan Servicing utilized Pennsylvania State Grant specialists to service program 2
Specialists have intimate Grant-to-loan program knowledge and expertise 3
Creation of TEACH Certification forms (Certification, Suspension, Conversions) to simplify program complexity and challenges 4
Online TEACH Web Products & Services for grant recipients 5
Expanded Quality Assurance on Grant-to-Loan Conversion Review 6
Recipient Behavior Analytics
- No New Grant Scenario
- Withdrawn/Reenrolled Scenarios

14. The Public Service Loan Forgiveness Program (PSLF) allows eligible borrowers to cancel the remaining balance of their Direct Loans after serving full-time at a public service organization for at least 10 years while making 120 qualifying monthly payments after October 1, 2007.

15. PSLF – Qualifying Payments
4/14/2017
PSLF – Qualifying Payments
Qualifying payments
Must make 120 separate, monthly payments
After October 1, 2007
Do not need to be consecutive
Must be for full amount due under plan
Must be made with 15 days of due date

16. PSLF – Qualifying Repayment Plan
4/14/2017
PSLF – Qualifying Repayment Plan
Income-driven plans are most likely to leave a remaining balance for forgiveness after 120 qualifying payments
10-Year Standard
IBR
ICR
Pay As You Earn
Others >= 10-Year Standard

17. Qualifying Payment Eligibility - Repayment Plan Breakdown17

18. Qualifying Payment Eligibility
Quarterly Repayment Plan Evaluations
Communicate to borrowers on 10-year Standard payment plans that they will not benefit from PSLF
Communicate to borrowers not on an eligible repayment plan that they are not making qualifying payments 18

19. Qualifying Payment Eligibility - PSLF Customer Support
Specialized processing and PSLF counselors
Unique 800# for PSLF inquiries
Intelligent call routing for the primary 800# 19

20. Qualifying Payment Eligibility - PSLF Escalated Issues
PSLF is 2.2% of FedLoan Servicing’s portfolio, but accounts for 19% of escalated issues
PSLF Issues
Number of Qualifying Payments
Ineligible Repayment Plan
Qualifying Employment Concerns
Consolidation & Loss of Qualifying Payments
Borrower Confusion 20

21. Program Visibility - ECF Processing21

22. Program Visibility - Qualifying Employment Types*
*Employers with approved ECFs

23. 132,321 Consolidation Applications*with ‘PSLF Interest’
Consolidation & PSLF
132,321 Consolidation Applications*with ‘PSLF Interest’
Borrowers note PSLF interest on 23.4% ** of all Direct Loan Consolidation Applications
Noted interest gives FedLoan unique PSLF counseling opportunities that did not exist until 2014
Direct Loan counseling
Repayment Plan counseling
Employment Certification Form counseling
*As of 10/20/2014
** Comparison based on 564, 397 total Consolidation Applications as of 10/20/2014

24. Planned Target Areas in 2015
Increased Visibility and Outreach
Communication Improvements
More specificity in ECF denial letters
Revise content on our web products to be more borrower friendly and take account of what we have learned about PSLF borrower behaviors

25. Let’s talk…
TPD, TEACH, and PSLF
Open Forum

26. Direct Loan Consolidation
Program Update
Open Forum 26

27. “New” Loan Consolidation
Available on StudentLoans.gov
Borrowers with federal student loans can:
Submit applications electronically
Confirm loans for consolidation
Choose a consolidation servicer
Select a repayment plan and submit an Income- Driven Repayment e-application if desired

28. New Direct Consolidation Loan Process
With the implementation of our new Direct Loan Consolidation process, we have four consolidation servicers:
Through the completion of the Federal Direct Consolidation Loan Application and Promissory Note, a borrower will confirm the loans that they want to consolidate and agree to repay the new Direct Consolidation Loan
The electronic application on StudentLoans.gov consist of five steps:
Choose Loans & Servicer
Repayment Plan Selection
Terms & Conditions
Borrower & Reference Information
Review & Sign
FedLoan / PHEAA
Great Lakes
Nelnet
Navient (formerly Sallie Mae)
Focus on these steps

29. New Direct Consolidation Loan Process
Key features of the electronic application:
NSLDS lookup performed and information about an applicant’s federal education loans will populate the application
Ability to delay processing of the application if applicant has at least one loan still in grace
Option to choose the federal servicer to complete the consolidation
Ability to select a repayment plan for the consolidation loan. Applicants interested in one of the income-driven repayment plans will be able to complete the electronic request process

30. Challenges… Issues… Problems
XML Data Limitation Issue
Partial Loan Display
No Loan Display
Standardization of LVC and payment manifests process
Conversion to ACH vs Paper Checks
Third Party Firms Promising Debt Relief 30

31. Important to Mention… Third Party Firms Promising Debt Relief:
The emergence of companies using sophisticated marketing tactics targeting student loan borrowers, their parents, service members and their families with promises of easy and instant relief from student loan debt has become a concern for FSA
Some companies promise assistance with loan consolidations and application for repayment plans designed to help manage the student loan debt—all services available from FSA and loan servicers at no charge to the borrower
Reports indicate some companies are collecting personal information, personal identification numbers, and Power of Attorney forms from the borrowers that allow the company to manage the borrowers’ accounts
FSA (through the Ombudsman’s office) is working to use the Web, social media, and other communication channels to make borrowers aware that free assistance is available from their loan servicers, and there is no need to pay any fees, much less exorbitant fees to private companies for assistance
We are continuing to explore what additional steps can be taken to help ensure borrowers are not exploited

32. Planned Target Areas in 2015
Solution to resolve XML Data Limitation Issue
Consistency of process for LVC
Processing times
Communication Improvements
Make clearer to Perkins borrowers of the potential loss of benefits if consolidating Perkins loans
Choice of Servicer – help borrowers with information in order to make selection

33. Let’s talk…
Consolidation
Open Forum

34. participation and feedback!
Thank you for your
participation and feedback!
Cynthia Battle
Direct Loan Servicing