# Presentation: 439248

## Federal Student Aid Federal Family Education Loan (FFEL) 

- Data Flow Reengineering Focus Group
- Orlando, FL
- Sunday, October 29, 2006

## Agenda

-  Introductions
-  Schedule
-  Objectives
-  Background
-  Current Improvement Ideas
-  Breakout Session
-  Closeout

## Introductions

_**Provide**__**:**_
- Name
- Organization
- Stage of the FFEL lifecycle you predominately work with

## Schedule

| Time | Agenda Topic  | Description |
| --- | --- | --- |
| 1:00pm to 1:45pm | Background and Focus Group Vision | Purpose of this session is to present opening remarks, set focus group objectives and expectations, provide background, and introduce current improvement ideas  |
| 1:45pm to 3:15pm | Breakout Sessions
 (with breaks as needed) | Attendees will break out into four facilitated discussion groups covering different stages of the FFEL lifecycle  |
| 3:15pm to 3:40pm | Break |  |
| 3:40pm to 4:50pm | Breakout Session Presentations  | Attendees will reconvene into one group; Federal Student Aid facilitators will present ideas generated during breakout sessions and open the floor for further discussion |
| 4:50pm to 5:00pm | Closeout | Federal Student Aid will provide closing remarks and discuss next steps |

## Ground Rules

- Feel Free to Express All Ideas
- Silence cell phones, blackberries, etc.
- Contractual implications/questions are off limits for discussion
- Respect everyone’s opportunity to participate, provide input, and feedback

## Background

**Background**

- Federal Student Aid's core strategic objectives include:
- Integrate systems and provide new technology solutions
- Improve program integrity
- Improve products and services to provide better customer service
- To achieve these strategic objectives, several key initiatives were introduced:
- Borrower Services
- ADvance
- Integrated Partner Management (IPM) System
- Information Framework

**Notes:**
Federal Student Aid has made considerable progress against our multiyear sequencing plan for system and business process integration.

## Background

**Background**

_**Borrower Services Initiative:**_ Started in FY 2004 to integrate Federal Student Aid's disparate back-office legacy student financial
_**ADvance Initiative:**_ Started in FY 2005 to modernize Federal Student Aid's core front office business functions
_**IPM system Initiative:**_ Started FY 2006, will integrate the eligibility, certification, demographic, financial, audit and default rate information received from schools, lenders, guaranty agencies and servicers

**Notes:**
Borrower Services
Borrower Services is in the process of reengineering Federal Student Aid's loan servicing, consolidation and default loan collection processes
Borrower Services is designed to improve service to both internal and external customers and to reduce operational costs
When complete, it should save an estimated $1 billion over the next ten years 

ADvance
ADvance will integrate Pell Grant award and Direct Loan origination and disbursement processes
ADvance will consolidate and streamline common functions, providing an end-to-end, online view of financial and aid information for customer service representatives, schools, and students 

Integrated Partner Management System
The IPM system initiative, which started FY 2006, will integrate the eligibility, certification, demographic, financial, audit and default rate information received from schools, lenders, guaranty agencies and servicers
IPM will significantly enhance Federal Student Aid's ability to reduce fraud, waste, and abuse by improving our oversight and monitoring of all participants in Title IV programs
IPM will incorporate a common routing ID, full partner security, and partner access to enrollment information; IPM will also enable a single sign-on for Federal Student Aid systems

## Background

**Background**

_**Information Framework (IF) Initiative**_
- Started in FY 2003, the goal of the IF is to ensure that accurate and consistent data is exchanged among:
- Federal Student Aid systems and employees
- Customers
- Partners
- Will improve business operations and data management functions by centralizing data transformation services
- The IF will replace existing functionality including the National Student Loan Data System (NSLDS)

## Background

**Background**

_**Information Framework (IF) Initiative (continued)**_
- Will facilitate the flow of business data across the enterprise

**Notes:**
The IF will facilitate the flow of business data across the enterprise, organize data structures and architecture, assign primary ownership of data, establish standards, document data management and governance policies, identify access methods and improve data quality

## Background

**Background**

- Federal Student Aid data strategy efforts:
- Documented as-is business processes
- Developed Target State Vision (TSV)
- Analyzed and documented gaps in current understanding
- Conducted an internal analysis of as-is FFEL data flows
- Developed internal ideas on ways to improvement the FFEL program
- The purpose of today's focus group is to:
- Generate ideas for improving the FFEL program's data flow
- Document your feedback on current Federal Student Aid ideas

**Notes:**
FSA has embarked on a major business and systems reengineering and modernization effort

A key component of successfully implementing such an effort is to ensure that all stakeholders understand and follow the same guidelines, standards, and processes in defining and sharing data

Our goal today, as it relates to the FFEL program, is to conduct the visioning processes needed to make sure that Federal Student Aid's business and systems reengineering efforts are aligned with the business requirements of the FFEL program

This is the first of two focus group meetings that we are conducting with the FFEL community as part of this effort

## Current Improvement Ideas

**Current Improvement Ideas**

- Federal Student Aid's goal is to streamline the FFEL reporting process and make it easier for our partners to conduct business with us
- Our current improvement goals are grouped into three areas:

| Data Collection | Capturing the data needed to meet business and reporting requirements; eliminating unnecessary and duplicative data collection requirements |
| --- | --- |
| Data Process Flows | Getting the right data, to the right place, at the right time |
| Data Integrity | Preserving the reliability and condition of FFEL data so that it is consistently defined and maintained during the lifecycle of a FFEL loan |

- 1

- 2

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## Current Improvement Ideas

**Based on our improvement goals, we have identified the following initial high-level improvement ideas**

| Data Collection |
| --- |
| Data Process Flows |
| Data Integrity |

- Data Integrity Standards
- Common Identifier Methodologies
- Link Data Collection to Business Requirements
- Timeliness of Data Consistent with Business Requirements
- Loan Holder Responsible for Reporting
- Single Federal Student Aid Gateway
- Reporting Standards
- Consolidation Standards

**GOALS**

## Current Improvement Ideas

- Develop and implement standard data definitions, consistent edits, and collection methods
- Standard data definitions and processes
- Adoption of standards

**Data Integrity Standards**

- Data Integrity Standards
- Common Identifier Methodologies
- Link Data Collection to Business Requirements
- Timeliness of Data Consistent with Business Requirements
- Loan Holder Responsible for Reporting
- Single Federal Student Aid Gateway
- Reporting Standards
- Consolidation Standards

**Notes:**

Develop and implement standard data definitions, consistent edits, and collection methods to ensure that the quality of data is consistent throughout the FFEL lifecycle

Standard data definitions and processes will reduce reporting errors and improve data quality

To be successful, the FFEL community and Federal Student Aid will need to adopt the standards

## Current Improvement Ideas

- Adopt unique and immutable identifiers
- Specific identifiers include:
- Enterprise Aid Identifier (Aid ID)
- System ID (SID)
- Routing ID (RID)
- Transaction ID (TID)

**Common Identifier Methodologies**

- Data Integrity Standards
- Common Identifier Methodologies
- Link Data Collection to Business Requirements
- Timeliness of Data Consistent with Business Requirements
- Loan Holder Responsible for Reporting
- Single Federal Student Aid Gateway
- Reporting Standards
- Consolidation Standards

**Notes:**
Adopt unique identifiers to ensure traceability of loans, students, partners, and eligibility transactions throughout the FFEL lifecycle

Immutable unique identifiers improve data quality, program integrity, and reporting consistency

## Current Improvement Ideas

_**Enterprise Aid Identifier (Aid ID):**_** **A consistent methodology for defining and maintaining the uniqueness of an aid instance (i.e., a specific loan)
_**System ID (SID):**_** **A consistent methodology for defining a student, parent, or borrower
_**Routing ID (RID):**_** **A consistent methodology for defining partners such as schools, lenders, servicers, and guaranty agencies
_**Transaction ID (TID):**_** **Use Institutional Student Information Record (ISIR) transaction identifiers to ensure awards are based on documented eligibility

**Common Identifier Methodologies (continued)**

- Data Integrity Standards
- Common Identifier Methodologies
- Link Data Collection to Business Requirements
- Timeliness of Data Consistent with Business Requirements
- Loan Holder Responsible for Reporting
- Single Federal Student Aid Gateway
- Reporting Standards
- Consolidation Standards

**Notes:**
Enterprise Aid Identifier (Aid ID)
A consistent methodology for defining and maintaining the uniqueness of an aid instance (i.e., a specific loan)
The Aid ID can be assigned by the institution issuing the loan; it will follow the loan in the event of sale, transfer, or assignment
The Aid ID can be created following an enhanced version of the FFEL CommonLine ID format

System ID (SID)
A consistent methodology for defining a student, parent, or borrower
The SID can be assigned by the institution at the first instance a person (student, parent, or borrower) completes the FAFSA
The SID can follow the person throughout all interactions with Federal Student Aid and partners

Routing ID (RID)
A consistent methodology for defining partners such as schools, lenders, servicers, and guaranty agencies
Federal Student Aid and lenders can use the RID to identify ineligible schools for which loans cannot be issued

Transaction ID (TID)
Use Institutional Student Information Record (ISIR) transaction identifiers to ensure awards are based on documented eligibility
Federal Student Aid and lenders can use the TID to ensure that awards are only made to borrowers that have completed the FAFSA and have been deemed eligible on the ISIR

## Current Improvement Ideas

- Collect the data needed to meet business requirements
- Eliminate unnecessary and redundant data collection
- Integrate data usage

**Link Data Collection to Business Requirements**

- Data Integrity Standards
- Common Identifier Methodologies
- Link Data Collection to Business Requirements
- Timeliness of Data Consistent with Business Requirements
- Loan Holder Responsible for Reporting
- Single Federal Student Aid Gateway
- Reporting Standards
- Consolidation Standards

**Notes:**
Identify and collect the data needed to meet FFEL program participant and Federal Student Aid business and reporting requirements
Eliminate unnecessary and redundant data collection, which can eliminate many fields currently required on financial reports 
Expand use of loan detail aggregation to streamline financial reporting and minimize data required on financial reports; will eliminate the same data being reported twice to Federal Student Aid systems

## Current Improvement Ideas

**Timeliness of data consistent with business requirements**
**Loan holder **_**responsible**_** for reporting**
**Single Federal Student Aid Gateway**

- Data Integrity Standards
- Common Identifier Methodologies
- Link Data Collection to Business Requirements
- Timeliness of Data Consistent with Business Requirements
- Loan Holder Responsible for Reporting
- Single Federal Student Aid Gateway
- Reporting Standards
- Consolidation Standards

**Notes:**
Timeliness of Data Consistent with Business Requirements
Determine when data is needed and adjust report submission timing to be consistent with the business time requirement 
Federal Student Aid business requirements necessitate lenders and guaranty agencies report certain data elements within a given time interval of an event, such as loan status information that affect a borrower’s eligibility 

Loan Holder Responsible for Reporting
Loan holders responsible for reporting data, for which they control, directly to Federal Student Aid such as guarantee, disbursement, and servicing activities
Although holder responsible, industry flexibility is maintained for reporting processes, whereby a reporting designee such as a guaranty agency or third-party data integrator could be used 
Having loan holders as the responsible party for reporting eliminates requirements for guaranty agencies to consolidate multiple lenders information for submission to Federal Student Aid  

Single Federal Student Aid Gateway
Provide partners with the capability to interact with Federal Student Aid via a single FFEL reporting interface; this interface will then coordinate workflows between systems such as NSLDS, FMS and Borrower Services systems  
Lenders/servicers and guaranty agencies can report all data to Federal Student Aid one time, to one location
A single reporting interface will reduce time consuming reporting requirements under current processes

## Current Improvement Ideas

- Adopt industry standards across the FFEL program
- Use and or modify existing standards as appropriate
- Create new standards where needed
- Reporting areas that could benefit from standardization include:
- Student/borrower and aid identification
- Servicing activities
- Claims
- Consolidations (loan verification certificates)
- Automation tools
- XML Registry and Repository
- XML schemas
- Digital imaging

**Reporting Standards**

- Data Integrity Standards
- Common Identifier Methodologies
- Link Data Collection to Business Requirements
- Timeliness of Data Consistent with Business Requirements
- Loan Holder Responsible for Reporting
- Single Federal Student Aid Gateway
- Reporting Standards
- Consolidation Standards

**Notes:**
Adopt industry standards across the FFEL program for reporting loan details and summary data that will help to eliminate inconsistent, unnecessary, and duplicative data collection processes

Reporting areas that could benefit from standardization include student/borrower and aid identification, servicing activities, claims, and consolidations (loan verification certificates)

Automate and develop industry standards and tools such as XML Registry and Repository, XML schemas and digital imaging can be used to improve FFEL reporting  

## Current Improvement Ideas

- Definitively link consolidation loans to their underlying loans through the use of standard loan identifiers (i.e., the Aid ID
- Standardize loan verification and payoff processes
- Use date certain payoff totals during consolidations

**Consolidation Standards**

- Data Integrity Standards
- Common Identifier Methodologies
- Link Data Collection to Business Requirements
- Timeliness of Data Consistent with Business Requirements
- Loan Holder Responsible for Reporting
- Single Federal Student Aid Gateway
- Reporting Standards
- Consolidation Standards

**Notes:**
Definitively link consolidation loans to their underlying loans through the use of standard loan identifiers (i.e., the Aid ID), which will create the ability to track an underlying loan after consolidation

Automate, standardize, and streamline consolidation processes to improve consolidation timelines and consistency through loan verification and payoff processes

Use date certain payoff totals during consolidations, which will reduce the number of costly, time consuming over- and underpayment adjustments

## Breakout Session

**Breakout Session**

- We are now going to break out into four individual groups where we will lead facilitated discussions on the FFEL lifecycle

## Breakout Session Topics

| Certification through Entering Repayment | Repayment through Closure (non-claims) | Claim Filing through Closure | Consolidations |
| --- | --- | --- | --- |
|  Establish the person record (FAFSA/ISIR process)
 Determine aid eligibility
 Receive student and school aid award records
 Process promissory notes
 Distribute funds for aid awards |  Initiate the borrower repayment process 
 Perform exit counseling
 Conduct servicing activities
 Includes delinquency status; does not include default status |  File for default 
 File for discharge (disability, death, bankruptcy, etc.)
 File for loan assignment
 Determine claim eligibility
 Conduct default servicing activities  
 Request reinsurance |  Initiate a consolidation request
 Verify consolidation eligibility 
Send/receive Loan Verification Certificates (LVC)
 Payoff underlying loans
 Communicate with borrower |

**Groups**

**Example Lifecycle Activities**

- A

- B

- C

- D

## Closeout

**Closeout**

- Thank you for participating in our first FFEL Data Flow Reengineering Focus Group
- Document feedback and new ideas discussed today
- Incorporate feedback into FFEL data flow reengineering efforts
- Continue community dialogue
- Work in partnership to improve FFEL data flow