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(Loans) Subject: Loan Servicing Information - Customer Service Performance Results and Allocation Information

Posted Date:September 11, 2014

Author: Jana Hernandes, Service Director, Operations, Federal Student Aid

Subject: Loan Servicing Information - Customer Service Performance Results and Allocation Information

Note: In November 2015, we moved this announcement's attachments to the FSA Data Center. The attachments for the Quarter Ending 6/30/2014 are now located on the Servicer Performance Metrics and Allocations page at https://studentaid.ed.gov/sa/about/data-center/business-info/contracts/loan-servicing/servicer-performance#06302014.

Since September 2009, the Department of Education (the Department) has been assigning federally-owned loans to a team of federal loan servicers. Per our contractual agreement with each of our federal loan servicers, the Department will annually measure servicer performance in the areas of customer satisfaction and default prevention. We will then use these results to determine each servicer’s allocation of future loan volume when applicable.

This announcement is intended to share customer service performance results and allocation information with the financial aid community. We should note that the results and allocations discussed in the announcement reflect performance metrics in place in Department servicing contracts for the period July 1, 2013 through June 30, 2014. Effective September 1, 2014, the Department has renegotiated the terms of our Title IV Additional Servicer (TIVAS) contracts to incorporate revised performance metrics and allocation schedules; we plan to modify our Not-for Profit (NFP) servicing contracts to incorporate the same revisions effective October 1, 2014. Subsequent announcements will describe these revised metrics and other changes to the allocation process. The allocations discussed in this notice will be in place through February 28, 2015, for servicers under the TIVAS contracts and through August 30, 2015, for servicers under the NFP servicing contracts.

In determining the current allocations, the Department measured customer satisfaction with each member of the federal loan servicing team exclusively through independently administered customer satisfaction surveys conducted through June 2014. We assessed default prevention through analysis of each servicer’s portfolio. We determined allocations in accordance with contractual agreements.

The servicers under the TIVAS contracts with fourth quarter customer service performance results, fifth year customer service performance results, and 2014-2015 allocations are as follows:

  • FedLoan Servicing (PHEAA)

  • Great Lakes Educational Loan Services, Inc.

  • Nelnet

  • Sallie Mae

The servicers under the NFP contracts with fourth quarter customer service performance results, first year customer service performance results, and 2014-2015 allocations are as follows:

  • Aspire Resources Inc.

  • CornerStone

  • ESA/Edfinancial

  • Granite State – GSMR

  • MOHELA

  • OSLA

  • VSAC Federal Loans

On September 23, 2013, the Department announced that the first additional allocations of borrower accounts to NFP members of the federal loan servicing team would be based on servicer performance scores for the four quarters ending on June 30, 2014. Performance metric scores for this period have now been generated for all NFPs currently under contract. The Department has reviewed performance data and operational needs and determined that all NFPs meet the current minimum performance requirements necessary to continue servicing federally owned loans. All NFPs will begin to receive allocations of new borrowers starting in early 2015. From that point, NFPs will receive 25 percent of total new borrowers, with the distribution across NFPs based on percentages determined by their performance scores and the number of eligible and qualified NFPs participating under each contract.

We provide the customer service performance results and allocation information in five attachments to this announcement.

  • In the attachment titled “Explanation of Allocation and Customer Service Performance Measure Methodology,” we provide an explanation of the overall performance measure methodology.

  • In the attachment titled “Quarterly Customer Service Performance Results for Not-For-Profit (NFP) Members of the Federal Loan Servicing Team – Quarter Ending June 30, 2014,” we provide the fourth quarter’s customer satisfaction, delinquency and default prevention results for Aspire Resources Inc., CornerStone, ESA/Edfinancial, Granite State – GSMR, MOHELA, OSLA, and VSAC Federal Loans.

  • In the attachment titled “Quarterly Customer Service Performance Results for FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae – Quarter Ending June 30, 2014,” we provide the fourth quarter’s customer satisfaction and default prevention results for these four servicers.
  • In the attachment titled “Final Calculation for the 2014-2015 Allocation Period for FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae,” we provide the customer satisfaction and default prevention results for these four servicers and the allocation each servicer will receive in the sixth year.

  • In the attachment titled “Final Calculation for the 2014-2015 Allocation Period for Not-For-Profit (NFP) Members of the Federal Loan Servicing Team,” we provide the customer satisfaction, delinquency and default prevention results for these seven servicers and the allocation each servicer will receive in early 2015.

We value the participation of all customers in the loan servicing process and thank you for your ongoing feedback.