| PublicationDate: 1/20/98 Summary: Consolidation Update #9 Author: ODAS - Office of the Deputy Assistant Secretary - SFA Consolidation Update #9 January 20, 1998 Dear Colleague: With the start of the new year, I am pleased to update you on the status of the William D. Ford Direct Loan Consolidation program. This fall, the Department, our direct loan contractor, Electronic Data Systems (EDS), and Price Waterhouse have collaborated to re-design and improve the direct loan consolidation process. The most important improvements made to the EDS loan consolidation process include a re-engineered loan certification process, improved data accuracy and managerial controls, and new staff and added expertise. As planned, EDS resumed processing new applications for direct loan consolidation on December 1, 1997, and has already accepted roughly 11,600 applications and completed more than 2,400 consolidations. It also has mailed over 46,000 applications to individuals who expressed an interest in a direct loan consolidation during and since the suspension. Below is an activity report summarizing EDS's progress in processing the applications it has accepted since December 1. Post-December 1 Applications As of 01/16/98 Applications Accepted 11,593 Applications in Process 9,086 Obtaining lender certification 7,588 In promissory note review 787 Awaiting signed promissory note from borrower 426 In income-contigent repayment process 285 Applications Withdrawn/Deactivated 74 Applications Consolidated 2,433 I would also like to update you on EDS's work on the roughly 84,000 loan consolidation applications pending at the beginning of September. EDS has now resolved 96 percent of those applications, met the performance criteria specified as preconditions for re-opening the program, and completed roughly 42,000 consolidations in ten weeks -- far more than is typical of any other student lender, including Sallie Mae before it suspended its loan consolidation program. Of the more than 3,700 applications in process, all but 208 are formerly deactivated applications that have recently been reactivated at the request of the borrower. These 208 applications are all pending either a returned promissory note or approval of income contingent repayment (a process which requires information from the Internal Revenue Service). Below is an activity report summarizing EDS's progress in processing the pre-December 1, 1997 backlog of applications since the last Loan Consolidation Update. Pre-December 1 Applications As of 11/17/97 As of 1/16/98 Applications Accepted 142,856 142,856 Applications in Process 8,775 3,764 1. Incomplete Applications 0 0 2. Obtaining lender certification 135 0 3. In promissory note review 43 0 4. Awaiting signed promissory note from borrowers 4,781 208 Applications Withdrawn/Deactivated 39,821 39,881 Applications Consolidated (completed) 94,260 99,211 This will be the last update on the resolution of the pre-December inventory of direct loan consolidation applications. Thank you for your patience and I look forward to sharing more news of our progress in improving the Direct Loan consolidation program with you over the coming months. Respectfully submitted, Diane Rogers Acting Deputy Assistant Secretary Student Financial Assistance Programs |