| 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 |