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Direct Consolidation Accepting New Applications

PublicationDate: 12/2/97
Summary: Direct Consolidation Accepting New Applications
Author: ODAS - Office of the Deputy Assistant Secretary - SFA

December 2, 1997

SUMMARY: Direct Consolidation Accepting New Applications

Dear Colleague:

The Department of Education is pleased to announce that its
contractor began accepting and processing new Direct Consolidation
Loan applications yesterday December 1, 1997. Although Sallie
Mae has announced that it is suspending accepting loan
consolidation applications, most other FFEL consolidators intend to
expand their consolidation capacity and combined with ED's
expanded capacity and improvements, will provide capacity
sufficient to meet borrowers' needs.

Working with our contractor, we have improved the efficiency and
timeliness of the Direct Loan consolidation process. Since
September 15, EDS successfully cleared the inventory of pending
applications. During this period, EDS consolidated an average of
over 4,000 applications per week; in one week EDS consolidated
over 7,300 applications. Improvements to the Direct Consolidation
process include:

- Reengineering the loan certification process. EDS is working
with the largest government-guaranteed lenders to improve the
speed and accuracy of the process by which the loan holder
certifies the loan balances.

- Improved data accuracy. Better data accuracy through more
frequent borrower contact and use of the National Student Loan
Data System early in the application process;

- Managerial controls. EDS is improving the tracking of applicant
information and developing new management reports to assist
monitoring the aging of applications; and

- Hiring new staff and adding expertise. EDS has increased their
staff by 20 percent and added experts in financial services and
student operations; and

EDS has stored the address of every borrower who submitted or
requested a loan consolidation during the temporary suspension. It
will mail each of them a letter informing them that it has resumed
accepting consolidation applications and offering them a new
application. As EDS resumes processing new applications, we look
forward to better serving borrowers wishing to consolidate their
loans into a Direct Loan.

Respectfully submitted,

Elizabeth M. Hicks
Deputy Assistant Secretary
Student Financial Assistance Programs

Last Modified: 08/16/1999