Posted Date:November 26, 2014
| Author: | Jana Hernandes, Service Director, Operations, Federal Student Aid |
Subject: Loan Servicing Information - Update on Loan Servicing Process Changes
As explained in a September 11, 2014 Electronic Announcement posted on the Information for Financial Aid Professionals (IFAP) Web site, the Department of Education (the Department) renegotiated the terms of our Title IV Additional Servicer (TIVAS) contracts effective September 1, 2014 to incorporate revised performance metrics and allocation schedules. In addition, we modified our Not-For-Profit (NFP) servicing contracts effective October 1, 2014 to incorporate the same revisions. In this announcement, we explain two loan servicing process changes that we are implementing as a result of the contractual changes.
Allocation of New Direct Loan Volume for NFPs
Beginning January 1, 2015, the Department’s allocation of new William D. Ford Federal Direct Loan (Direct Loan) Program volume to members of our federal loan servicer team will include the seven NFP members of the team. This is the first time that NFP servicers will receive newly originated Direct Loans to service on our behalf. Our NFP servicers are as follows:
Aspire Resources Inc.
CornerStone
ESA/Edfinancial
Granite State – GSMR
MOHELA
OSLA
VSAC Federal Loans
In total, our seven NFP servicers will receive 25 percent of new Direct Loans originated from January 1, 2015 through August 30, 2015 via the Common Origination and Disbursement (COD) System. The allocation that each of the seven NFP servicers will receive is reflected in the attachment to the September 11th announcement titled “Final Calculation for the 2014-2015 Allocation Period for Not-For-Profit (NFP) Members of the Federal Loan Servicing Team.”
Note: As part of implementation testing, we will allocate a very small number of new Direct Loans to our NFP servicers between December 15, 2014 and January 1, 2015. These allocations will help us ensure that transactions are working properly prior to startup.
Our NFP servicers will communicate and work with borrowers who have taken out newly originated Direct Loans just as they have communicated and worked with borrowers with existing loans who have been assigned to them to date. In addition, our NFP servicers will partner with borrowers’ schools to develop relationships and provide support needed to guide borrowers through successful repayment of their loans.
Adjustments to Customer Satisfaction Surveys
In making changes to the TIVAS and NFP servicing contracts earlier this year, the Department revised the performance metrics under those contracts. Specifically, we created greater incentives for servicers to improve performance on the key goals of helping borrowers in repayment remain current and increasing borrower customer satisfaction. We also took this opportunity to refocus and enhance the customer satisfaction survey performance metric to better support the new incentives. In doing so, we retained the survey’s borrower response element and discontinued the survey’s school response element.
All members of our federal loan servicer team understand that their work with schools must be successful if they are to increase the number of borrowers who are current and decrease the number of borrowers who are delinquent and in default. In addition to our servicers’ vested interest in and commitment to ongoing partnerships with schools, we will continue to welcome school feedback through a broad range of other existing vehicles. We acknowledge the key role all school partners play in the federal student loan program and appreciate their ongoing efforts that make us successful in providing service to students, parents, and families.
Contact Information
If you have questions about the assignment of a newly originated Direct Loan to an NFP member of our federal loan servicer team, contact the NFP servicer directly. Contact information for the appropriate servicer can be found on the Loan Servicing Centers for Schools Contact Information page on the IFAP Web site.