1. Ombudsmen Panel: Student/Borrower Advocate – The Role of the Ombudsman

2. FSA Ombudsman FY2012 Update 34,909 contacts received – Increase over FY2011 Increase in Research cases – Economic issues – Loan transfers – System conversions Collaboration with CFPB – Link from CFPB.gov to FSA Ombudsman site Navigating the Sea of Change 2012 NCHER Knowledge Symposium 2

3. Caucus Background Vision: The vision of the Caucus of Student Loan Ombudsmen (the Caucus) is to: provide a resource for the creation and support of highly effective student aid problem resolution methodologies, techniques and processes that promote equitable services for all federal student aid participants. Mission: The mission of the Caucus is to: provide training and mentoring; identify and report on trends to support positive change through industry best practices and legislation; and serve as a voice of fair process throughout the student loan life cycle. Navigating the Sea of Change 2012 NCHER Knowledge Symposium 3

4. Trends Committee Analyzes Data from FSA Ombudsman’s Office (Inquiries/escalation from customers throughout the industry) Adds in data from all participating Servicers and Guarantors for non FSA volume – full picture Navigating the Sea of Change 2012 NCHER Knowledge Symposium 4

5. What are our Industry Top 5 Trends? Account Balance Loan Cancellation/Discharge Repayment Plans/Amounts (excluding IBR) Default (excluding rehabilitation issues) Service Quality (excluding split-servicing) Navigating the Sea of Change 2012 NCHER Knowledge Symposium 5

6. Top Issue – Account Balance Averages 26-28.5% of overall volume over last 11 years; Questions/issues differ from non-defaulted compared to defaulted borrowers; Questions/issues cover a broad range of sub-topics What types of questions/complaints does your organization receive regarding account balances on loan accounts? Navigating the Sea of Change 2012 NCHER Knowledge Symposium 6

7. The Caucus Hears… From non-defaulted borrowers: - Disbursement amounts - Payment application – Pre-Payment – Interest capitalization (the effect of deferments and forbearances) – Subsidized vs Unsubsidized loans – Change in Payment Plan (example ICR to standard) – Simple daily interest accrual – Interest rate changes – Fees assessed Navigating the Sea of Change 2012 NCHER Knowledge Symposium 7

8. 8 Case Study #1: Non-defaulted Customer

9. The Caucus Hears… From defaulted borrowers: – Payment application – collection costs – Interest capitalization before default and after rehabilitation; – Subsidized vs. Unsubsidized loans – Simple Daily interest accrual – Interest Rate changes – Collection Costs – how much is charged Effect on rehabilitation and consolidation – Offset payment application Navigating the Sea of Change 2012 NCHER Knowledge Symposium 9

10. 10 Case Study #2: Defaulted Customer

11. Framing Recommendations List is long; must be prioritized No single problem or solution Use data to prioritize and provide a place to start Review contacts received about Account Balance from 28 Caucus members during FY2012 Navigating the Sea of Change 2012 NCHER Knowledge Symposium 11

12. What the Data Reveals Account Balance represents nearly 67% of all contacts received by Caucus members, including FSA, from non-defaulted borrowers through 3 rd quarter of FY2012 FSA identifies more specific issues from non-defaulted borrowers: – loan disbursement timing and accuracy; – Interest accrual – Payment posting Navigating the Sea of Change 2012 NCHER Knowledge Symposium 12

13. What the Data Reveals Account Balance represents roughly 33% of all contacts received by Caucus members, including FSA, from defaulted borrowers through 3 rd quarter of FY2012 FSA identifies more specific issues from defaulted borrowers: – Challenges to the validity of debt – Late charge disputes (including collection costs) – General questions about balance calculation Navigating the Sea of Change 2012 NCHER Knowledge Symposium 13

14. Next Steps: Work to create simple explanations for each steps Create a consistent message for customers Additional Communication Opportunities Share trend data with the Caucus and participate - Calls take place 3 rd Tuesday of the month at 3pm eastern - Contact Vicki Shipley at vshipley@ncher.us to be added to the List Serv Navigating the Sea of Change 2012 NCHER Knowledge Symposium 14

15. Contact Information Joyce DeMoss Joyce.DeMoss@ed.govJoyce.DeMoss@ed.gov April Petroski April.M.Petroski@salliemae.comApril.M.Petroski@salliemae.com Tracy Stine Tracy.A.Stine@salliemae.comTracy.A.Stine@salliemae.com Diane Zitur dzitur@ecmc.orgdzitur@ecmc.org Navigating the Sea of Change 2012 NCHER Knowledge Symposium 15