# Presentation: 523752

## Session DL-02

**Direct Loan Servicing**
**Fundamentals**
- Cynthia Battle
- U.S. Department of Education

## Agenda

**Direct Loan Servicing Update**
-  *Facts and Figures *
* **CCRAA Changes*
* **Outreach Activities *
* **Customer Satisfaction Survey*
**Direct Loan Servicing Borrower Tools  **
**Direct Loan Servicing School Tools**

## Portfolio Statistics

**6.6 Million **_**Active**_** Borrowers**

**Total Direct Loan Borrowers**

## Portfolio Statistics

**Notes:**
In School 1,526,111 
In Grace 352,859 
In Repayment 3,567,185 
In Deferment 713705 
In Forbearance 498422 

## Direct Loan Payments

- For the month of  June 2008,  the percentage of borrower payment transactions received in paper format by the DLSC was only 38.2%.

_**July 2008**_
**Checks** – 35.2%
**EDA** – 35.8%
**Direct Loan Web** – 18.7%
**Aggregator Web –  **10.3%

## Electronic Services 

**Electronic Services **

- The Direct Loan Servicing program just celebrated over 2 billion dollars processed through the web site since online payments were made available, not including third party payments.  Over 8,281,679 transactions have been processed with an average value of $241.91.

## Delinquency 

## Consolidation Peak Planning

***Capacity Planning included:***
- Application volume forecasting based on previous year’s data
- Analysis of the interest rate trends and forecasting interest rates that would be in effect for July 1
- Adding additional systems capacity to receive web applications
- Adding additional call center representatives and back office workers to handle a small volume increase that was forecast

**Notes:**
Although consolidation outreach to borrowers continues, this years outreach to schools will not focus solely on consolidation but other program initiatives (e.g. LSDA and GPLUS).

## Consolidation Peak Planning

***Results: ***
- This year’s summer consolidation peak was very small, as forecast.  Decreases in interest rates, as occurred this year, usually cause increases in applications after July 1 when the interest rate changes
- We have seen an increase application volume since July 1
- We were able to handle volumes in all operational areas without problem

**Notes:**
Although consolidation outreach to borrowers continues, this years outreach to schools will not focus solely on consolidation but other program initiatives (e.g. LSDA and GPLUS).

## Loan Consolidation Peak

**Loan Consolidation**
- LC bookings decreased in June because we held loan applications to allow borrowers to take advantage of the falling interest rates
- The total June/July 2008 bookings of 41,720 exceeded the 2007 volume by 12,638 for the same two-month period

## Direct Loan Servicing Update
 Facts and Figures 
 CCRAA Changes
 Outreach Activities 
 Customer Satisfaction Survey
Direct Loan Servicing Borrower Tools  
Direct Loan Servicing School Tools

**Direct Loan Servicing Update**
-  *Facts and Figures *
* **CCRAA Changes*
* **Outreach Activities *
* **Customer Satisfaction Survey*
**Direct Loan Servicing Borrower Tools  **
**Direct Loan Servicing School Tools**

## CCRAA / Regulatory Changes

- Military Deferment
- Public Service Forgiveness
- Economic Hardship
- Total and Permanent Disability

## CCRAA / Regulatory Changes

- TEACH Grant
- Income Based Repayment (IBR)
- effective July 1, 2009
- ICR for Graduated PLUS
-  effective July 1, 2009

## Direct Loan Servicing Update
 Facts and Figures 
 CCRAA Changes
 Outreach Activities 
 Customer Satisfaction Survey
Direct Loan Servicing Borrower Tools  
Direct Loan Servicing School Tools

**Direct Loan Servicing Update**
-  *Facts and Figures *
* **CCRAA Changes*
* **Outreach Activities *
* **Customer Satisfaction Survey*
**Direct Loan Servicing Borrower Tools  **
**Direct Loan Servicing School Tools**

## Delinquency Management 

- Pre-Repayment Counseling
- Calls made two months prior to entering repayment
-  Emails sent to assist with repayment options
- Delinquency Counseling
- 31 days we begin a series of calls (22 calls)
- Letters begin at 7 days delinquent (12)
- Call Campaigns
- - High balance calls (balance of 80K or greater)

## Direct Loan Servicing Update
 Facts and Figures 
 CCRAA Changes
 Outreach Activities 
 Customer Satisfaction Survey
Direct Loan Servicing Borrower Tools  
Direct Loan Servicing School Tools

**Direct Loan Servicing Update**
-  *Facts and Figures *
* **CCRAA Changes*
* **Outreach Activities *
* **Customer Satisfaction Survey*
**Direct Loan Servicing Borrower Tools  **
**Direct Loan Servicing School Tools**

## Customer Satisfaction Survey

- 250 interviews of Direct Loan Servicing customers conducted by phone from 7/11/08 through 7/20/08
- 100 Electronic Debit
- 100 Paper
- 50 E-Bill customers
- Results weighted in proportion to customer population
- 64% Paper
- 5% E-bill
- 31% Electronic Debit

**Notes:**
As in prior studies, included only those in repayment; no forbearance, deferment or collections

## Customer Satisfaction Survey - 2008

- Confidence

- Customer Satisfaction
- Index

- Complaints

- Overall satisfaction
- Satisfaction compared to expectations
- Satisfaction compared to ideal

**Customer Satisfaction Survey - ****2008**

## Customer Satisfaction Survey

- Score

- Impact

- Confidence

- Customer Satisfaction

- Complaints

- Statements

- Website

- Voice ResponseUnit

- Call CenterRepresentative

- 0.0

- 0.3

- 1.1

- 1.5

- -1.4

- 3.0

- Electronic Debit

- 2.4

## Satisfaction levels holding steady

***Satisfaction levels holding steady***

- =Significant Difference vs. 2007

## Satisfaction Benchmarks Federal Government

- DL Servicing remains among the highest satisfaction services in the Federal Government

## Satisfaction Benchmarks Private Sector

- DL Servicing has satisfaction levels comparable or superior to private sector financial services

## Survey Highlights

- Direct Loan Servicing continues to garner very high levels of customer satisfaction
- Call Center Representatives and the VRU remain the key action areas for further improvements
- Score for Electronic Debit are as close to “perfect” as they are likely to get; high impact implies that customers expect FSA to keep it this way
- Website scores up thanks to improved perceptions among Paper statement customers, but some potential “early warning” signs from E-Bill customers

**Notes:**
E-bill customers’ ratings are down, though effect is muted by their small numbers
They are more likely to say the site is worse than similar sites 

## Direct Loan Servicing Update
 Facts and Figures 
 CCRAA Changes
 Outreach Activities 
 Customer Satisfaction Survey
Direct Loan Servicing Borrower Tools  
Direct Loan Servicing School Tools

**Direct Loan Servicing Update**
-  *Facts and Figures *
* **CCRAA Changes*
* **Outreach Activities *
* **Customer Satisfaction Survey*
**Direct Loan Servicing Borrower Tools  **
**Direct Loan Servicing School Tools**

## Benefits to Borrowers

- Repayment incentive
- Repayment options tailored to individual need (Standard, Extended, Graduated, Income Contingent, Alternative Repayment)
- Payment due date selection by borrower
- Options for receiving bills and/or correspondence electronically
- Electronic Payments (EDA and on-line)
- Self-Service tools for borrowers
- 	(telephone voice response system, Web portals)
- Online form submission with
-      electronic PIN signatures (forbearance,
-      deferments, EDA, FAFSA)
- Loan Consolidation

## Direct Loan Servicing Web Sites

**For Borrowers  -  **_[www.dl.ed.](http://www.dl.ed.gov/)__[gov](http://www.dl.ed.gov/)_
- Real Time Account Information
- Online Transaction Processing - Borrower Self-Service
- Online Counseling and Rules Based Messaging
- Interactive Pre-qualifier for Deferment and Forbearance Requests including online submission with eSignatures
- Online payments
- Electronic Mail Services
- EDA Enrollment
- Online Calculators
- Online Surveys
**For Schools  -  **_[www.dl.ed.](http://www.dl.ed.gov/schools)__[gov](http://www.dl.ed.gov/schools)__[/schools](http://www.dl.ed.gov/schools)_
- Student Account Lookup
- Online Reports – Portfolio, Delinquency and Counseling
- Complete Question Center

## Borrower Web SiteHomepage – dl.ed.gov

- Highly Secure
-  PIN protected
-  Data encryption
- Section 508 Compliant for borrowers with disabilities
- English/Spanish option for entire site
- Online Tour – tutorial to aid borrowers in using site
- Search Feature & Site Map helps borrowers find what they need quickly

**Borrower Web Site****Homepage – dl.ed.gov**

## Borrower Web SitePersonalized Online Messages

**Key Features**
- Personalized messages are displayed to borrowers based on their account status and other information.
-  Messages include information about last and next payment, options for delinquent borrowers, and special information as the need arises.

## Borrower Web SiteAccount Summary

**Borrower Web Site****Account Summary**

- _Exit Counseling_

- _Click here to view your Non-Direct Loans_

- Borrowers are provided with the amount of their total indebtedness (Direct Loans, FFEL, and Perkins) during Exit Counseling or from the Account Summary page.

## Borrower Web SitePayment Due Date

- Borrowers may select one of our four repayment plans:
- Standard
- Extended
- Graduated
- Income Contingent
-  Repayment (ICR)
- Borrowers may also select from any of the four available due dates:
-            7th, 14th, 21st, or 28th

**Borrower Web Site****Payment Due Date**

## Borrower Web SiteBills and Payment

**Borrower Web Site****Bills and Payment**

## Borrower Web SiteElectronic Debit

- Borrower feedback:
- I just wanted to congratulate you on providing an excellent way to manage my student loan account.  I cannot tell you how much simpler it is for me, knowing I can do everything I need on-line.  I don't have to mail anything or call someone -- I just need to log in.		- Troy

- Over                              1MILLION borrowers are receiving a .25% incentive by enrolling in EDA!

**Borrower Web Site****Electronic Debit**

## Borrower Web SiteOnline Form Submission

- Borrowers can submit Unemployment Deferment and General Forbearance applications online.

**Borrower Web Site****Online Form Submission**

## Borrower Web SiteEntrance and Exit Counseling

**Borrower Web Site****Entrance and Exit Counseling**

## Direct Loan Servicing Update
 Facts and Figures 
 CCRAA Changes
 Outreach Activities 
 Customer Satisfaction Survey
Direct Loan Servicing Borrower Tools  
Direct Loan Servicing School Tools

**Direct Loan Servicing Update**
-  *Facts and Figures *
* **CCRAA Changes*
* **Outreach Activities *
* **Customer Satisfaction Survey*
**Direct Loan Servicing Borrower Tools  **
**Direct Loan Servicing School Tools**

## School Web SiteHomepage – dl.ed.gov/schools

## School Web SiteWelcome Page

**School Web Site****Welcome Page**

## School Web SiteStudent Account Lookup

**School Web Site****Student Account Lookup**

## School Web SiteEntrance and Exit Counseling Reports

**School Web Site****Entrance and Exit Counseling Reports**

## School Web SiteDelinquency Reports

- Summary Delinquency Report

- Late Stage Delinquency Report

**School Web Site****Delinquency Reports**

## Contact Direct Loan School Services

- 1-888-877-7658 (School Services)
- 		_[www.dl.ed.](http://www.dl.ed.gov/schools)__[gov](http://www.dl.ed.gov/schools)__[/schools](http://www.dl.ed.gov/schools)_
- 30-day Demand Letters
- Cohort Default Assistance
- Delinquency Management Assistance
- Exit Counseling Interview Materials
- NSLDS/Clearinghouse
- SSCR/Student Enrollment
- Account Status
- Web Assistance

**Notes:**
Cohort Default – Provide assistance with a specific cohort year inquiries including what year a borrower is calculated in, how to prepare a challenge, timeframes on submitting a challenge and how to read the loan detail report.  

Delinquency Management - Provide assistance on reading and understanding the delinquency reports available on the website.
Exit Counseling Interview Materials - Schools can request exit counseling interview materials to be mailed to them 30, 60 or 90 days before a borrower graduates from any School Support Services Representative. The interview material shows the total indebtedness of Direct Loans for a specific student and what the borrower's approximate monthly payment amount will be for each of the repayment plans.
NSLDS/Clearinghouse – Research any conflicts that may involve borrower enrollment and loan history
SSCR/Student Enrollment - Verify borrower's correct enrollment information to ensure borrower's account is updated appropriately.
Statusing – Provide updated borrower account information. 
Web Assistance – Respond to inquiries on enhancements, how to access or use the School and Borrower Services websites, and specific site information.  

## Contact Information

- Thank You!
- We appreciate your feedback and comments.
- Cynthia Battle
- Phone: 	(202) 377-3261
- Email:		_[Cynthia.Battle@ed.](mailto:Cynthia.Battle@ed.gov)__[gov](mailto:Cynthia.Battle@ed.gov)_