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      19.                                        20.                                        21.         22.             23.                   24.    ITEM NO.                       SCHEDULE OF SUPPLIES/SERVICES                         QUANTITY       UNIT         UNIT PRICE             AMOUNT   32a. QUANTITY IN COLUMN 21 HAS BEEN     RECEIVED               INSPECTED          ACCEPTED, AND CONFORMS TO THE CONTRACT, EXCEPT AS NOTED:  32b.  SIGNATURE OF AUTHORIZED GOVERNMENT                  32c. DATE             32d.  PRINTED NAME AND TITLE OF AUTHORIZED GOVERNMENT        REPRESENTATIVE                                                                  REPRESENTATIVE   32e. MAILING ADDRESS OF AUTHORIZED GOVERNMENT REPRESENTATIVE                    32f. TELPHONE NUMBER OF AUTHORZED GOVERNMENT REPRESENTATIVE                                                                                  32g. E-MAIL OF AUTHORIZED GOVERNMENT REPRESENTATIVE  33. SHIP NUMBER           34. VOUCHER NUMBER          35. AMOUNT VERIFIED       36. PAYMENT                                       37. CHECK NUMBER                                                           CORRECT FOR                                                                                      COMPLETE         PARTIAL           FINAL     PARTIAL       FINAL 38. S/R ACCOUNT NO.       39. S/R VOUCHER NUMBER      40. PAID BY    41a. I CERTIFY THIS ACCOUNT IS CORRECT AND PROPER FOR PAYMENT           42a. RECEIVED BY (Print) 41b. SIGNATURE AND TITLE OF CERTIFYING OFFICER        41c. DATE                                                                           42b. RECEIVED AT (Location)                                                                            42c. DATE REC'D (YY/MM/DD)        42d. TOTAL CONTAINERS                                                                                                         STANDARD FORM 1449 (REV. 3/2005) BACK 

 

                                                  SCHEDULE Continued  ITEM NO.                        SUPPLIES/SERVICES                     QUANTITY     UNIT        UNIT PRICE $          AMOUNT $              Accounting and Appropriation Data:             0198M2009.A.2009.ENB00000.6P2.2572A.C26.000.0000.000000             Cost Applied: $5,000,000.00   0001       IDIQ Base Ordering Period Award Minimum Guarantee               1.00   SE            5,000,000.00          5,000,000.00              Period of Performance: 06/17/2009 - 06/16/2014   0002       OPTION - Optional Ordering Period                               0.00   EA                     0.00                 0.00              Optional Period of Performance: 06/17/2014 -             06/16/2019                                                             PAGE 2 OF  

 

A.    ADDENDUM 1 – SF 1449 CONTINUATION PAGE                                                            (This page left blank intentionally.)    Solicitation Number:  FSA-TitleIV-09                                 Page 1 of 20    

 

B.   ADDENDUM 2 – 52.212-4, CONTRACT TERMS AND CONDITIONS— COMMERCIAL ITEMS (MAR 2009)    B.1  52.212-4    Contract Terms And Conditions—Commercial Items (Mar 2009)—                   TAILORED  (c)(1) Changes. The Contracting Officer may at any time, by written order, and without notice       to the sureties, if any, make changes within the general scope of this contract in any one       or more of the following:              (i) Description of services to be performed.              (ii)  Time of performance (i.e., hours of the day, days of the week, etc.).              (iii)  Place of performance of the services.        (2)    If any such change causes an increase or decrease in the cost of, or the time              required for, performance of any part of the work under this contract, whether or             not changed by the order, the Contracting Officer shall make an equitable              adjustment in the contract price, the delivery schedule, or both, and shall modify              the contract.        (3)    The Contractor must assert its right to an adjustment under this clause within 30              days from the date of receipt of the written order. However, if the Contracting              Officer decides that the facts justify it, the Contracting Officer may receive and              act upon a proposal submitted before final payment of the contract.       (4)    If the Contractor’s proposal includes the cost of property made obsolete or excess              by the change, the Contracting Officer shall have the right to prescribe the manner              of the disposition of the property.       (5)   Failure to agree to any adjustment shall be a dispute under the Disputes clause.             However, nothing in this clause shall excuse the Contractor from proceeding with             the contract as changed.    B.2  52.252-2     Clauses Incorporated By Reference (Feb 1998)  This contract incorporates one or more clauses by reference, with the same force and effect as if  they were given in full text. Upon request, the Contracting Officer will make their full text  available. The full text of a clause may also be accessed electronically at:  http://www.arnet.gov/far/       •           52.203-13  Contractor Code of Business Ethics and Conduct (Dec 2008)    •           52.203-14  Display of Hotline Poster(s) (Dec 2007)    •           52.209-6  Protecting the Government’s Interest when Subcontracting with                Contractors Debarred, Suspended, or Proposed for Debarment (SEP 2006)     •  52.216-18  Ordering (OCT 1995)                    (a)   the effective date of award,  the end of the current period of                    performance    •  52.216-19  Ordering Limitations (OCT 1995)                    (a) One Borrower                    (b)(1)  Five Million Borrowers                     (b)(2)  Five Million Borrowers                      (b)(3) Two Days                     (d)  One Day      •  52.216-22  Indefinite Quantity (OCT 1995)   Solicitation Number:  FSA-TitleIV-09                                 Page 2 of 20    

 

                   (d)   the end of the current period of performance      •  52.216-27  Single Or Multiple Awards (OCT 1995)      •  52.217-8  Option To Extend Services (NOV 1999)      •  52.217-9  Option to Extend the Term of the Contract (MAR 2000)      •  52.224-1  Privacy Act Notification (APR 1984)      •  52.224-2  Privacy Act (APR 1984)      B.3 EDAR 3452.202-1 Definitions (Aug 1987) – TAILORED   (a)  The term "Secretary" or "Head of the Agency" (also called "Agency Head") means the      Secretary of the Department of Education; and the term "his/her duly authorized      representative" means any person, persons, or board authorized to act for these officials.   (b) “Chief Acquisition Officer” or “CAO” means the official responsible for monitoring the      agency’s acquisition activities, evaluating them based on applicable performance     measurements, increasing the use of full and open competition in agency acquisitions,     making acquisition decisions consistent with applicable laws, and establishing clear lines of     authority, accountability, and responsibility for acquisition decision-making and developing     and maintaining a acquisition career management program.  (c) "Chief of the Contracting Office" means an official serving in the contracting activity (CAM      or FSA Acquisitions) as the manager of a group that awards and administers contracts for a      principal office of the Department. See also definition of “Head of Contracting Activity”      below.   (d) “Contracting Officer's Representative” or “COR” means a government employee appointed      in writing ONLY by a contracting officer and delegated limited responsibilities to perform      specified contract management duties related to technical oversight and administration of a      specific contract.  CORs may serve in a full-time or part-time capacity.  The COR performs      the contract management duties assigned by the CO in a written "Contracting Officer's      Representative Designation Memorandum" for each particular contract.  Multiple CORs may      be appointed for a single contract when the area of expertise necessary requires such      appointments.  The CO may appoint alternate or assistant CORs to serve in the COR's      absence.  For the purpose of this program, the term Contracting Officer's Technical      Representative (COTR) will be used for assistant CORs.   (e) “Head of the Contracting Activity” or “HCA” means those officials within the Department of      Education who have responsibility for and manage an acquisition organization and usually      hold unlimited procurement authority.  The Director, Federal Student Aid Acquisitions, is the      HCA for FSA. The Director, Contracts and Acquisitions Management (CAM) is the HCA for      all other Departmental program offices and all boards, commissions, and councils under the      management control of the Department.   (f) “Performance-Based Organization” or “PBO” is the office within the Department that is      mandated by Public Law 105-244 to carry out Federal student assistance or aid programs and      report to Congress on an annual basis.  It may also be referred to as “Federal Student Aid.”   (g) “Senior Procurement Executive” or “SPE” means the single agency official appointed as such      by the head of the agency and delegated broad responsibility for acquisition functions,      including issuing agency acquisition policy and reporting on acquisitions agency-wide.  The      SPE also acts as the official one level above the contracting officer when the HCA is acting      as a contracting officer.   (h) "Department" or "ED" means the United States Department of Education.    Solicitation Number:  FSA-TitleIV-09                                 Page 3 of 20     

 

  B.4   ED 307-17   Conflicts Of Interest (Aug 2007)  (a)  The contractor, subcontractor, employee or consultant, has certified that, to the best of their     knowledge and belief, there are no relevant facts or circumstances which could give rise to an     organizational or personal conflict of interest, (see FAR Subpart 9.5 for organizational     conflicts of interest), (or apparent conflict of interest) for the organization or any of its staff,     and that the contractor, subcontractor, employee or consultant has disclosed all such relevant     information if such a conflict of interest appears to exist to a reasonable person with     knowledge of the relevant facts (or if such a person would question the impartiality of the     contractor, subcontractor, employee or consultant). Conflicts may arise in the following     situations:     (1) Unequal access to information – a potential contractor, subcontractor, employee or        consultant has access to non-public information through its performance on a government        contract.     (2) Biased ground rules – a potential contractor, subcontractor, employee or consultant has        worked, in one government contract, or program, on the basic structure or ground rules of        another government contract,      (3) Impaired objectivity – a potential contractor, subcontractor, employee or consultant, or        member of their immediate family (spouse, parent or child) has financial or other        interests that would impair, or give the appearance of impairing, impartial judgment in        the evaluation of government programs, in offering advice or recommendations to the        government, or in providing technical assistance or other services to recipients of Federal        funds as part of its contractual responsibility.                "Impaired objectivity" includes but is not limited to the following situations that would        cause a reasonable person with knowledge of the relevant facts to question a person's        objectivity:        (i)  financial interests or reasonably foreseeable financial interests in or in connection           with products, property, or services that may be purchased by an educational agency,           a person, organization, or institution in the course of implementing any program           administered by the Department;         (ii) significant connections to teaching methodologies that might require or encourage the           use of specific products, property or services; or         (iii)significant identification with pedagogical or philosophical viewpoints that might           require or encourage the use of a specific curriculum, specific products, property or           services,                Offerors must provide the disclosure described above on any actual or potential conflict        (or apparent conflict of interest) of interest regardless of their opinion that such a conflict        or potential conflict (or apparent conflict of interest) would not impair their objectivity.                In a case in which an actual or potential conflict (or apparent conflict of interest) is        disclosed, the Department will take appropriate actions to eliminate or address the actual        or potential conflict (or apparent conflict of interest), including but not limited to        mitigating or neutralizing the conflict, when appropriate, through such means as ensuring        a balance of views, disclosure with the appropriate disclaimers, or by restricting or        modifying the work to be performed to avoid or reduce the conflict. In this clause, the        term “potential conflict” means reasonably foreseeable conflict of interest.   Solicitation Number:  FSA-TitleIV-09                                 Page 4 of 20    

 

           (b) The contractor, subcontractor, employee or consultant agrees that if “impaired objectivity, or      an actual or potential conflict of interest (or apparent conflict of interest) is discovered after      the award is made, it will make a full disclosure in writing to the Contracting Officer. This      disclosure shall include a description of actions that the Contractor has taken or proposes to     take, after consultation with the Contracting Officer, to avoid, mitigate, or neutralize the     actual or potential conflict (or apparent conflict of interest).   (c)  Remedies - The Government may terminate this contract for convenience, in whole or in     part, if it deems such termination necessary to avoid the appearance of a conflict of interest.     If the Contractor was aware of a potential conflict of interest prior to award or discovered an     actual or potential conflict (or apparent conflict of interest) after award and did not disclose     or misrepresented relevant information to the Contracting Officer, the Government may     terminate the contract for default, or pursue such other remedies as may be permitted by law     or this contract. These remedies include imprisonment for up to five years for violation of     Title 18, U.S. Code, § 1001 and fines of up to $5000 for violation of Title 31, U.S. Code, §     3802. Further remedies include suspension or debarment from contracting with the federal     government. The Contractor may also be required to reimburse the Department for costs the     Department incurs arising from activities related to conflicts of interest. An example of such     costs would be those incurred in processing Freedom of Information Act requests related to a     conflict of interest.   (d) In cases where remedies short of termination have been applied, the contractor,     subcontractor, employee or consultant agrees to eliminate the organizational conflict of     interest, or mitigate it to the satisfaction of the Contracting Officer.   (e)  The Contractor further agrees to insert in any subcontract or consultant agreement hereunder,     provisions which shall conform substantially to the language of this clause, including specific     mention of potential remedies and this paragraph (e).    B.5    EDAR 3452.208-70  Printing (Aug 1987)  Unless otherwise specified in this contract, the contractor shall not engage in, nor subcontract  for, and printing (as that term is defined in Title I of the Government Printing and Binding  Regulations in effect on the effective date of this contract) in connection with the performance of  work under this contract; except that performance involving the reproduction of less than 5,000  production units of any one page, or less than 25,000 production units in the aggregate of  multiple pages, shall not be deemed to be printing. A production unit is defined as one sheet, size  8 1/2 by 11 inches, and one side and color only.    B.6    FSA 24-1    Release Of Information Under The Freedom Of Information Act (Jan        2008)—TAILORED  By entering into a contract with the Department of Education and as permitted/authorized by  existing statutes and applicable case law, without regard to proprietary markings, the contractor  approves the release of the entire contract and all related modifications and task orders,  including, but not limited to:  (1) Unit prices, including labor rates,  (2)    Statements of Work/Performance Work Statement generated by the contractor,   (3)    Performance requirements, including incentives, performance standards, quality levels        and service level agreements,      Solicitation Number:  FSA-TitleIV-09                                 Page 5 of 20     

 

 (4)   Reports, deliverables and work products delivered in performance of the contract         (including quality of service, performance against requirements/standards/service level         agreements),   (5)   Any and all information, data, software and related documentation first provided under         the contract,    (6)   Proposals or portions of proposals incorporated by reference, and   (7)   Other terms and conditions.      B.7   FSA 27-1    Labeling Of Documents (June 2007)—TAILORED   The Contractor shall not label any data, as defined in the clause at 52.227-14, produced in  performance of this contract in a way that would restrict the Government's right to use or release  the information.  If applicable, the Contractor shall include a legend that identifies sensitive data  that should not be released for security reasons.  Under FAR 52.227-14, Rights in Data-General  (or 52.227-15, -16, -17) clause, this data may be used for any public purpose. Deliverables shall  not contain vendor-specific logos, mottos, watermarks, or holograms.     The Contractor shall not use, particularly for proposals, U.S. Government logos, such as the U.S.  Department of Education or Federal Student Aid.    B.8    FSA 27-2    Limitations On The Use Or Disclosure Of Government-Furnished        Information Marked With Restrictive Legends (Dec 2006)  (a) For contracts under which data are to be produced, furnished, or acquired, the terms “limited     rights” and “restricted rights” are defined in the Rights in Data - General clause of this     contract.  (b) Proprietary data, technical data or computer software provided to the Contractor as     Government furnished information (GFI) under this contract may be subject to restrictions on     use, modification, reproduction, release, performance, display, or further disclosure.     (1) Proprietary data with legends that serve to restrict disclosure or use of data. The        Contractor shall use, modify, reproduce, perform, or display proprietary data received        from the Government with proprietary or restrictive legends only in the performance of        this contract. The Contractor shall not, without the express written permission of the        party who owns the data, release or disclose such data or software to any person.     (2) GFI marked with limited or restricted rights legends. The Contractor shall use, modify,        reproduce, perform, or display technical data received from the Government with limited        rights legends or computer software received with restricted rights legends only in the        performance of this contract. The Contractor shall not, without the express written        permission of the party whose name appears in the legend, release or disclose such data        or software to any person.     (3) GFI marked with specially negotiated license rights legends. The Contractor shall use,        modify, reproduce, release, perform, or display proprietary data, technical data or        computer software received from the Government with specially negotiated license        legends only as permitted in the license. Such data or software may not be released or        disclosed to other persons unless permitted by the license and, prior to release or        disclosure, the intended recipient has completed the use and non-disclosure agreement.        The Contractor shall modify paragraph (1)(c) of the use and non-disclosure agreement to        reflect the recipient's obligations regarding use, modification, reproduction, release,    Solicitation Number:  FSA-TitleIV-09                                 Page 6 of 20     

 

 

 

 

 

 

 

    (1) Name and Address of the Contractor.      (2) Invoice Number and Invoice Date (Date invoices as close as possible to the date of         mailing or transmission. The date and actual submission must occur after receipt,         inspection and acceptance of the supplies or services.)      (3) The Contract number, contract line item, and if applicable, the order number must be         included on the invoice and be correct.      (4) Description, quantity, unit of measure, unit price, and extended price of the item         delivered must agree with the contract or order.       (5) Terms of any prompt payment discount offered.       (6) Name, title, and phone number of persons to be notified in event of defective invoice.       (7) The period of time covered by the invoice must include the first and last day of the         period.       (8) Totals must be supported by subtotals and subtotals should be supported by detail, (i.e.         documentation for categories of labor, hours performed, unit prices) and deliverables         provided.       (9) If required by this contract or order, receipts must be provided to support documentation        of "other direct costs" (ODCs) or materials.    B.12  AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (Pub.L. 111-5)  In the event funds are utilized on this contract originating from the American Recovery and  Reinvestment Act of 2009, or other discrete legislation, the following clauses, or similar clauses,  shall apply:     •  52.203-15   Whistleblower Protections Under The American Recovery And        Reinvestment Act Of 2009 (Mar 2009)     •  52.204-11    American Recovery And Reinvestment Act—Reporting Requirements        (Mar 2009)     •  52.212-5    Contract Terms and Conditions Required to Implement Statutes or        Executive Orders—Commercial Items (Mar 2009)—Alternate II (Mar 2009)     •  52.215-2     Audit And Records—Negotiation—Alternate I (Mar 2009)     •  EDAR 3403-1 Self Reporting Of Violations – Recovery Act (Feb 2009)        The contractor and subcontractor shall promptly refer to an appropriate inspector general        any credible evidence that a principal, employee, agent, contractor, sub-grantee or        subcontractor has committed a violation of Federal criminal law involving fraud, conflict        of interest, bribery, or gratuity violations found in Title 18 U.S.C. or a violation of the        civil False Claims Act (31 U.S.C. 3729-3733).    B.13  ADDITIONAL TERMS AND CONDITIONS  A. Contract Type—Indefinite Delivery/Indefinite Quantity (IDIQ).  During the course of the     basic ordering period, the Government will provide a minimum of $5,000,000.00 in revenue,     provided that the contractor is in compliance with the requirements for servicing federally     held debt, and the maximum volume for the basic ordering period agreement will be 50     million borrowers.  The Optional Ordering Period will have a minimum of $0 and a     maximum of an additional 50 million borrowers  B. Ordering Period—The ordering period for this contract will be one (1), five (5) year Base     Ordering Period, with one (1) additional five (5) year Optional Ordering Period.     Solicitation Number:  FSA-TitleIV-09                                Page 10 of 20     

 

C. Requirements Deadlines—The contractor shall comply with the following compliance     requirements deadlines:     (1) The contractor shall meet the Initial Requirements by August 31, 2009 for servicing        federally held debt. If these are met, FFEL servicing may begin.     (2) The contractor shall meet the Intermediate Requirements by March 31, 2010 (unless        otherwise noted within the Intermediate Requirements document), for servicing federally        held debt. If all requirements are not met, the Government may elect to not assign further        volume to the contractor. Furthermore, the Government may transfer currently held        accounts to another servicer. The contractor losing the accounts shall bear the costs of        any such transfer.     (3) The contractor shall meet the Full Requirements by August 31, 2010 for Direct Loan        servicing. If the Government determines the requirements are not met, the Government        may elect to not assign further volume to the contractor. Furthermore, the Government        may transfer currently held accounts to another servicer. The contractor losing the        accounts shall bear the costs for any such transfer.  D. Quarterly Compliance Monitoring—[Reserved]  E.   Annual Compliance Audit—[Reserved]  F. Allocation Methodology—See Attachments A-4 and A-5.  G. Allocation Metrics— See Attachments A-4 and A-5.   H. Performance Incentives/Metrics—[Reserved]  I. Price Definitions—See Attachment A-6.  J. Work Performed Outside the Continental United States—The Contractor has represented     to the Department that it will perform all work required under this Contract within the United     States. If, at any time, the Contractor wishes to perform any Contract work outside the United     States, the Contractor shall inform the Contracting Officer, in advance and in writing, of its     intention and request the Department’s approval. The Contractor shall not perform any     Contract work outside the United States unless and until it has received the Contracting     Officer’s explicit, written approval to perform such work. In order to give proper     consideration to the Contractor’s request, the Department may ask for, and the Contractor     shall provide, information relevant to the proposed performance outside the United States,     including but not limited to a detailed description of the physical, personnel and management     resources to be used and any potential difficulties or constraints in performing in the foreign     jurisdiction. The Department may refuse to approve Contract performance outside the United     States to the extent that, solely in the Department’s judgment, the Contractor has not shown     that performance outside the United States would satisfy the Contract requirements and     would not impair or degrade performance. Further, the Department may refuse to approve     any performance outside the United States for any other reason, or for no reason, except as     otherwise required by the laws and treaties of the United States. The Department also may     approve performance outside the United States subject to certain conditions, to which     conditions the Contractor shall strictly adhere. Neither performance within the United States,     nor the Department’s refusal to allow performance outside the United States shall ever     constitute a change to this Contract or give rise to any entitlement to additional compensation     or excuse any failure of performance by the Contractor. Nothing in this clause shall be     interpreted to impose any obligation on the Department to allow or to refuse a request for     performance of this Contract outside the United States.    Solicitation Number:  FSA-TitleIV-09                                Page 11 of 20    

 

 K. Branding/Marketing Material—Contractors may not solicit or promote other      services/products they, or their affiliates, offer while servicing Department of Education      borrowers, or Federally held debt. This includes all communication channels and touch      points, such as but not limited to: inbound and outbound calls/email, web pages, any mailings      specific to the status of their account, direct personal and automated interaction, etc.         Scenarios: (1) if the servicer services Federally and non-Federally held debt and offers      combined billing, no marketing envelopes or inserts for other services/products may be      issued; (2) if the servicer services Federally and non-Federally held debt and does NOT use     combined billing, normal marketing may be provided for non- Federally held debt for other     services/products; and (3) if the servicer services Federally and non-Federally held debt and     is in personal contact, no marketing for other services/products may be discussed. If a      borrower with in-school status seeks information regarding other products or services from     the servicer, the borrower shall be directed to their school’s Student Financial Assistance     Office.          Any exception or ambiguity regarding the above shall be reviewed and approved by the     Contracting Officer in advance.  L. Invoicing and Non-Compliance – Borrowers whose loans are not being serviced in     compliance with the Requirements, Policy and Procedures for servicing federally held debt     due to the fault of the servicer (i.e. correct interest calculations, correct balances, interest     determination and calculations, notices sent properly, proper due diligence, etc.), will not be     billable to the Government from the initial point of non-compliance.  Any funds that have     been invoiced for these borrowers and paid shall be returned to the Government via a credit     on the next invoice.  M.  Contracting Officer’s Representative – The following individual is designated as      Contracting Officer’s Representative (COR) for this contract:        Mr. James McMahon     Federal Student Aid         830 First Street, NE     Suite 111G5     Washington, DC 20202     Email:  james.mcmahon@ed.gov         Phone:  (202) 377-3124      N. Additional Terms:         1. The Title IV Servicing contracts are for any potential services to manage all types of Title         IV student aid obligations, including, but not limited to, servicing and consolidation of         outstanding debt.  However, they are not Requirements contracts.      2. Each contractor will provide, at a minimum, the services provided within their proposal,         in accordance with the pricing identified in Term #3 below.      3. The Government will set and manage the common pricing, including tier structure,         below:             Solicitation Number:  FSA-TitleIV-09                                Page 12 of 20     

 

                   Status               Volume Low   Volume High    Unit Price                   Borrowers in In-school Status N/A        N/A       $           1.050        Borrowers in Grace or Current Repayment                                   Status      1        3,000,000    $           2.110                                           3,000,001       UP        $           1.900          Borrowers in Deferment or Forbearance 1       1,600,000    $           2.070                                           1,600,001       UP        $           1.730               Borrowers 31-90 Days Delinquent N/A         N/A       $           1.620              Borrowers 91-150 Days Delinquent N/A         N/A       $           1.500             Borrowers 151-270 Days Delinquent N/A         N/A       $           1.370               Borrowers 270+ Days Delinquent N/A          N/A       $           0.500                Out year pricing will follow the methodology described utilizing the subsequent terms.         There will be no set declination in pricing at the time of award.          4. The Government has included an escalation methodology based upon the Bureau of        Labor Statistics’ (BLS) Employment Cost Index (ECI) for Total Compensation, Private        Industry, Service Occupations (Not Seasonally Adjusted), to account for significant        inflation and/or deflation. When the ECI exceeds 3.0% (plus or minus) in any given year        the Government will adjust the established common pricing by any amount in excess of        this rate.  The calculated rate of escalation will equal the average of the 12-month percent        change for the previous four quarters, ending June 30th.  This ECI escalation will be        applied beginning in September of the same calendar year.  Further, this escalation will        compound for all remaining years of the Base and Optional Ordering Periods.             For example, ECI rate released in June 2010 is 3.6%. The Government will increase unit        pricing by .6% for the contract beginning September 1, 2010 and all remaining years of       the Base Ordering Period, as well as the Optional Ordering Period.           A decreasing rate of inflation would follow the same pattern as above. For example, if the        ECI decreases by more than 3.0%, then the unit prices for the remaining out-years will       also decrease by the percentage in excess of 3.0%.  For example, ECI rate released in        June 2010 is -4.2%. The Government will decrease unit pricing by 1.2% for the contract        period beginning September 1, 2010 and all remaining years of the Base Ordering Period,        as well as the Optional Ordering Period.       5. Common pricing includes all supplies, services and other costs to deliver Title IV        servicing under this contract, including:        •  Costs for bringing contractor systems into compliance for handling federally held          debt.       •  Costs for legislative, regulatory or policy changes that affect the FFEL community as          a whole, as is commercially accepted practice in the FFEL community.       •  For all other costs, the Department and the contractor(s) may come to an agreement          via change order process or negotiation, as necessary.        6. The Government makes no guarantee to any contractor that their organization will retain       their current loan servicing volume. In addition, the Government makes no minimum   Solicitation Number:  FSA-TitleIV-09                                Page 13 of 20    

 

      volume guarantees to any contractor. The Government does guarantee a minimum        dollar/revenue amount of $5,000,000 over the base ordering period under this Indefinite        Delivery, Indefinite Quantity contract, regardless of the number of loans serviced by a        contractor.       7. The Government reserves the right to periodically review and equitably adjust the rate        structure to maintain effectiveness of the services provided (i.e., different volume breaks,        different ties, cost allocations, etc)        8. The Government reserves the right to equitably introduce, eliminate, or modify loan        deliverables/status items that are in the best interest of the Government or Borrower. (i.e.,        in-school deferments moved into the In-School deliverable; new deferment or        forbearance categories; etc).       9. The Government reserves the right to unilaterally shift borrowers in the best interest of        the Government or Borrowers, at no additional cost to the Government.  It is anticipated        that this will be done only with reasonable and prudent cause.       10. The Government retains the unilateral right to resolve split-borrowers as deemed        appropriate by the Government, at no additional cost to the Government.    Solicitation Number:  FSA-TitleIV-09                                Page 14 of 20    

 

 B.14  52.212-5    Contract Terms And Conditions Required To Implement Statutes Or         Executive Orders—Commercial Items (Dec 2008)   (a)  The Contractor shall comply with the following Federal Acquisition Regulation (FAR)     clauses, which are incorporated in this contract by reference, to implement provisions of law     or Executive orders applicable to acquisitions of commercial items:      (1) 52.233-3, Protest After Award (Aug 1996) (31 U.S.C. 3553).      (2) 52.233-4, Applicable Law for Breach of Contract Claim (Oct 2004) (Pub. L. 108-77, 108-        78)    (b) The Contractor shall comply with the FAR clauses in this paragraph (b) that the Contracting      Officer has indicated as being incorporated in this contract by reference to implement      provisions of law or Executive orders applicable to acquisitions of commercial items:       _X (1) 52.203-6, Restrictions on Subcontractor Sales to the Government (Sept 2006), with        Alternate I (Oct 1995) (41 U.S.C. 253g and 10 U.S.C. 2402).   _X (2) 52.203-13, Contractor Code of Business Ethics and Conduct (Dec 2008) (Pub. L. 110        252, Title VI, Chapter 1 (41 U.S.C. 251 note)).   __ (3)  52.219-3, Notice of Total HUBZone Set-Aside (Jan 1999) (15 U.S.C. 657a).   __ (4)  52.219-4, Notice of Price Evaluation Preference for HUBZone Small Business Concerns        (July 2005) (if the offeror elects to waive the preference, it shall so indicate in its offer)        (15 U.S.C. 657a).   __ (5)  [Reserved]   __ (6)(i) 52.219-6, Notice of Total Small Business Set-Aside (June 2003) (15 U.S.C. 644).         __ (ii) Alternate I (Oct 1995) of 52.219-6.         __ (iii) Alternate II (Mar 2004) of 52.219-6.   __ (7)(i) 52.219-7, Notice of Partial Small Business Set-Aside (June 2003) (15 U.S.C. 644).         __ (ii) Alternate I (Oct 1995) of 52.219-7.         __ (iii) Alternate II (Mar 2004) of 52.219-7.   _X (8) 52.219-8, Utilization of Small Business Concerns (May 2004) (15 U.S.C. 637(d)(2) and         (3)).    _X (9)(i) 52.219-9, Small Business Subcontracting Plan (Apr 2008) (15 U.S.C. 637(d)(4)).          __ (ii) Alternate I (Oct 2001) of 52.219-9.          _X (iii) Alternate II (Oct 2001) of 52.219-9.    __ (10) 52.219-14, Limitations on Subcontracting (Dec 1996) (15 U.S.C. 637(a)(14)).    __ (11) 52.219-16, Liquidated Damages—Subcontracting Plan (Jan 1999) (15 U.S.C.         637(d)(4)(F)(i)).    __ (12)     (i) 52.219-23, Notice of Price Evaluation Adjustment for Small Disadvantaged               Business Concerns (Oct 2008) (10 U.S.C. 2323) (if the offeror elects to waive the               adjustment, it shall so indicate in its offer).          __ (ii) Alternate I (June 2003) of 52.219-23.    __ (13) 52.219-25, Small Disadvantaged Business Participation Program—Disadvantaged Status         and Reporting (Apr 2008) (Pub. L. 103-355, section 7102, and 10 U.S.C. 2323).    __ (14) 52.219-26, Small Disadvantaged Business Participation Program— Incentive         Subcontracting (Oct 2000) (Pub. L. 103-355, section 7102, and 10 U.S.C. 2323).    __ (15) 52.219-27, Notice of Total Service-Disabled Veteran-Owned Small Business Set-Aside         (May 2004) (15 U.S.C. 657 f).      Solicitation Number:  FSA-TitleIV-09                                Page 15 of 20     

 

 __ (16)  52.219-28, Post Award Small Business Program Rerepresentation (June 2007) (15          U.S.C. 632(a)(2)).    _X (17) 52.222-3, Convict Labor (June 2003) (E.O. 11755).    _X (18) 52.222-19, Child Labor—Cooperation with Authorities and Remedies (Feb 2008) (E.O.          13126).    _X (19) 52.222-21, Prohibition of Segregated Facilities (Feb 1999).   _X (20) 52.222-26, Equal Opportunity (Mar 2007) (E.O. 11246).    _X (21) 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam         Era, and Other Eligible Veterans (Sept 2006) (38 U.S.C. 4212).   _X (22) 52.222-36, Affirmative Action for Workers with Disabilities (Jun 1998) (29 U.S.C.          793).    _X (23) 52.222-37, Employment Reports on Special Disabled Veterans, Veterans of the Vietnam          Era, and Other Eligible Veterans (Sept 2006) (38 U.S.C. 4212).   _X (24) 52.222-39, Notification of Employee Rights Concerning Payment of Union Dues or         Fees (Dec 2004) (E.O. 13201).   _X (25)    (i) 52.222-50, Combating Trafficking in Persons (Aug 2007) (Applies to all contracts).         __ (ii) Alternate I (Aug 2007) of 52.222-50.   __ (26)      (i) 52.223-9, Estimate of Percentage of Recovered Material Content for EPA-            Designated Items (May 2008) (42 U.S.C. 6962(c)(3)(A)(ii)).         __ (ii) Alternate I (May 2008) of 52.223-9 (42 U.S.C. 6962(i)(2)(C)).    __ (27)  52.223-15, Energy Efficiency in Energy-Consuming Products (Dec 2007) (42 U.S.C.          8259b).    __ (28)    (i) 52.223-16, IEEE 1680 Standard for the Environmental Assessment of Personal             Computer Products (Dec 2007) (E.O. 13423).         __ (ii) Alternate I (Dec 2007) of 52.223-16.   __ (29) 52.225-1, Buy American Act—Supplies (June 2003) (41 U.S.C. 10a-10d).    __ (30)     (i) 52.225-3, Buy American Act—Free Trade Agreements—Israeli Trade Act (Aug              2007) (41 U.S.C. 10a-10d, 19 U.S.C. 3301 note, 19 U.S.C. 2112 note, Pub. L 108-            77, 108-78, 108-286, 109-53 and 109-169).         __ (ii) Alternate I (Jan 2004) of 52.225-3.         __ (iii) Alternate II (Jan 2004) of 52.225-3.   __ (31)  52.225-5, Trade Agreements (Nov 2007) (19 U.S.C. 2501, et seq., 19 U.S.C. 3301 note).    _X (32) 52.225-13, Restrictions on Certain Foreign Purchases (June 2008) (E.O.’s,          proclamations, and statutes administered by the Office of Foreign Assets Control of the          Department of the Treasury).    __ (33)  52.226-4, Notice of Disaster or Emergency Area Set-Aside (Nov 2007) (42 U.S.C.          5150).    __ (34)  52.226-5, Restrictions on Subcontracting Outside Disaster or Emergency Area (Nov          2007) (42 U.S.C. 5150).    __ (35)  52.232-29, Terms for Financing of Purchases of Commercial Items (Feb 2002) (41          U.S.C. 255(f), 10 U.S.C. 2307(f)).    __ (36)  52.232-30, Installment Payments for Commercial Items (Oct 1995) (41 U.S.C. 255(f),          10 U.S.C. 2307(f)).    _X (37) 52.232-33, Payment by Electronic Funds Transfer—Central Contractor Registration          (Oct 2003) (31 U.S.C. 3332).      Solicitation Number:  FSA-TitleIV-09                                Page 16 of 20     

 

 __ (38)  52.232-34, Payment by Electronic Funds Transfer—Other than Central Contractor          Registration (May 1999) (31 U.S.C. 3332).    __ (39)  52.232-36, Payment by Third Party (May 1999) (31 U.S.C. 3332).    _X (40) 52.239-1, Privacy or Security Safeguards (Aug 1996) (5 U.S.C. 552a).    __ (41)     (i) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (Feb               2006) (46 U.S.C. Appx. 1241(b) and 10 U.S.C. 2631).          __ (ii) Alternate I (Apr 2003) of 52.247-64.             (c)  The Contractor shall comply with the FAR clauses in this paragraph (c), applicable to      commercial services, that the Contracting Officer has indicated as being incorporated in this      contract by reference to implement provisions of law or Executive orders applicable to      acquisitions of commercial items:    _X (1) 52.222-41, Service Contract Act of 1965 (Nov 2007) (41 U.S.C. 351, et seq.).    _X (2) 52.222-42, Statement of Equivalent Rates for Federal Hires (May 1989) (29 U.S.C. 206        and 41 U.S.C. 351, et seq.).   _X (3) 52.222-43, Fair Labor Standards Act and Service Contract Act—Price Adjustment         (Multiple Year and Option Contracts) (Nov 2006) (29 U.S.C. 206 and 41 U.S.C. 351, et         seq.).    __ (4)  52.222-44, Fair Labor Standards Act and Service Contract Act—Price Adjustment (Feb         2002) (29 U.S.C. 206 and 41 U.S.C. 351, et seq.).    __ (5)  52.222-51, Exemption from Application of the Service Contract Act to Contracts for         Maintenance, Calibration, or Repair of Certain Equipment—Requirements (Nov 2007)         (41 U.S.C. 351, et seq.).    __ (6)  52.222-53, Exemption from Application of the Service Contract Act to Contracts for         Certain Services—Requirements (Nov 2007) (41 U.S.C. 351, et seq.).    __ (7)  52.237-11, Accepting and Dispensing of $1 Coin (Sept 2008) (31 U.S.C. 5112(p)(1)).             (d)  Comptroller General Examination of Record. The Contractor shall comply with the      provisions of this paragraph (d) if this contract was awarded using other than sealed bid, is in      excess of the simplified acquisition threshold, and does not contain the clause at 52.215-2,      Audit and Records—Negotiation.       (1) The Comptroller General of the United States, or an authorized representative of the         Comptroller General, shall have access to and right to examine any of the Contractor’s         directly pertinent records involving transactions related to this contract.       (2) The Contractor shall make available at its offices at all reasonable times the records,         materials, and other evidence for examination, audit, or reproduction, until 3 years after         final payment under this contract or for any shorter period specified in FAR Subpart 4.7,         Contractor Records Retention, of the other clauses of this contract. If this contract is         completely or partially terminated, the records relating to the work terminated shall be         made available for 3 years after any resulting final termination settlement. Records         relating to appeals under the disputes clause or to litigation or the settlement of claims         arising under or relating to this contract shall be made available until such appeals,         litigation, or claims are finally resolved.       (3) As used in this clause, records include books, documents, accounting procedures and         practices, and other data, regardless of type and regardless of form. This does not require     Solicitation Number:  FSA-TitleIV-09                                Page 17 of 20     

 

      the Contractor to create or maintain any record that the Contractor does not maintain in        the ordinary course of business or pursuant to a provision of law.                 (e) (1)  Notwithstanding the requirements of the clauses in paragraphs (a), (b), (c), and (d) of this        clause, the Contractor is not required to flow down any FAR clause, other than those in        paragraphs (e)(1)(i) through (xi) of this paragraph in a subcontract for commercial items.        Unless otherwise indicated below, the extent of the flow down shall be as required by the        clause—         (i)  52.203-13, Contractor Code of Business Ethics and Conduct (Dec 2008) (Pub. L.            110-252, Title VI, Chapter 1 (41 U.S.C. 251 note)).        (ii)  52.219-8, Utilization of Small Business Concerns (May 2004) (15 U.S.C. 637(d)(2)             and (3)), in all subcontracts that offer further subcontracting opportunities. If the             subcontract (except subcontracts to small business concerns) exceeds $550,000             ($1,000,000 for construction of any public facility), the subcontractor must include             52.219-8 in lower tier subcontracts that offer subcontracting opportunities.         (iii)  52.222-26, Equal Opportunity (Mar 2007) (E.O. 11246).         (iv)  52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the             Vietnam Era, and Other Eligible Veterans (Sept 2006) (38 U.S.C. 4212).         (v)  52.222-36, Affirmative Action for Workers with Disabilities (June 1998) (29             U.S.C. 793).         (vi)  52.222-39, Notification of Employee Rights Concerning Payment of Union Dues             or Fees (Dec 2004) (E.O. 13201).         (vii)  52.222-41, Service Contract Act of 1965 (Nov 2007) (41 U.S.C. 351, et seq.).         (viii) 52.222-50, Combating Trafficking in Persons (Aug 2007) (22 U.S.C. 7104(g)).                 Flow down required in accordance with paragraph (f) of FAR clause 52.222-50.         (ix)  52.222-51, Exemption from Application of the Service Contract Act to Contracts             for Maintenance, Calibration, or Repair of Certain Equipment-Requirements (Nov             2007) (41 U.S.C. 351, et seq.).         (x)  52.222-53, Exemption from Application of the Service Contract Act to Contracts             for Certain Services-Requirements (Nov 2007) (41 U.S.C. 351, et seq.).         (xi)  52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (Feb             2006) (46 U.S.C. Appx. 1241(b) and 10 U.S.C. 2631). Flow down required in             accordance with paragraph (d) of FAR clause 52.247-64.      (2) While not required, the contractor may include in its subcontracts for commercial items a        minimal number of additional clauses necessary to satisfy its contractual obligations.     Solicitation Number:  FSA-TitleIV-09                                Page 18 of 20    

 

 C.   STATEMENT OF OBJECTIVES (SOO)    C.1   General Description Of Scope/Purpose          C.1.1  Federal Student Aid Background/Overview        Federal Student Aid (FSA), an office of the Department, plays a central and essential role        in America's postsecondary education community.                FSA's core mission is to ensure that all eligible individuals benefit from federal financial        assistance—grants, loans and work-study programs—for education beyond high school.        The programs FSA administers comprises the nation's largest source of student aid:        during the 2007-08 school year alone, FSA provided approximately $83 billion in new        aid to nearly 10 million postsecondary students and their families. FSA’s staff of 1,100 is        based in 10 cities, in addition to its Washington, D.C. headquarters.                C.1.2 Current Need        With the current economic and liquidity uncertainty facing financial markets, many        student loan lenders are dropping out of the market. With more than $65 billion in 2008-       09 loans and approximately $130 billion in eligible 2003-07 student loans on bank        balance sheets and auction rate securitizations, the capital markets are currently unable to        generate adequate funds at prices that will ensure 2009-10 loans can be made.                Recent legislation including the College Cost Reduction Authorization Act of 2008        (CCRAA) (Pub. Law 110-84) and the Ensuring Continued Access to Student Loans Act        of 2008 (ECASLA) (Pub. Law 110-227) enabled the Department to accept former        Federal Family Education Loan Program (FFELP) loans in the form of additional Direct        Loan (DL) capacity, and to purchase FFELP loans as far back as 2003, in an effort to        bring liquidity and stability back to the student loan market.                With the sudden increase in current and potential loan volume that the Department will        be responsible for servicing, the need for increasing the Title IV student aid servicing        vehicles is determined appropriate at this time.                C.1.3 Objective        Acquire efficient and effective commercial contract services to manage all types of Title        IV student aid obligations, including, but not limited to, servicing and consolidation of        outstanding debt.                C.1.4 Constraints                      C.1.4.1 Specific compliance activities for servicing Federally held assets include,                   but are not limited to, Attachments A-1 through A-3 provided herein.                       C.1.4.2 In order to manage the costs associated with such a potentially large                    portfolio, the service must provide innovative measures to ensure portfolio                    growth is not the key driver of total cost. Contractor incentives must be                    based on performing assets, rather than transaction or activity based                    delinquency incentives. Costs may also be managed through redistribution                    of customers to self-service options, as approved by the Government.                   Performance measures will help ensure that the complete service operates                   as efficiently and effectively as possible and that it is achieving the desired   Solicitation Number:  FSA-TitleIV-09                                Page 19 of 20    

 

                  business outcomes. These measurements will be flexible to allow for                   regular reviews and revisions as necessary.                    C.1.4.3 The contractor(s) will be responsible for maintaining a full understanding                    of all federal and state laws and regulations and FSA requirements and                    ensuring that all aspects of the service continue to remain in compliance as                    changes occur.                      C.1.4.4 The contractor(s) will provide a service flexible enough to handle new                    requirements generated by Congress and respond to legislative mandates                    and policy changes. Please see Appendix A – Standards and Relevant                    Documents for historical and current representative information.                      C.1.4.5 The contractor(s) will provide timely (as defined by FSA and contractor)                    responses to Office of Inspector General (OIG), General Accounting                    Office (GAO), budget, data, and management requests.                      C.1.4.6 It is understood and mutually agreed that the Department of Education                    has exclusive ownership of all information stored in, retrieved, modified,                    and/or archived in as part of this service. The contractor shall have no                    rights in such information and no rights to such information shall vest on                    the contractor by virtue of its performance of this contract. No other party                    has the right to copy, delete, archive, or transfer such information without                    the prior express written consent of the Department of Education. The                    contractor shall not use such information for any marketing or solicitation                    purpose including, but not limited to, commercial advertising, credit                    offers, or similar campaigns.    C.2 Attachments/Supplemental Documents                 Number Title           A-1    Additional Servicer—Initial Requirements Document (Version 21.0)           A-2 Additional Servicer—Intermediate Requirements Document (Version                  6.0)           A-3    Additional Servicer—Full Requirements Document (Version 6.0)           A-4 Ongoing Allocation Methodology           A-5 Sample—Ongoing Allocation Metric Calculation           A-6    Servicing Pricing Definitions (Version 9.0)                                               Solicitation Number:  FSA-TitleIV-09                                Page 20 of 20    

 

Attachment A-1                                       Additional               Servicer       INITIAL Requirements                                              All_InitialReq_v21.0.doc   All_InitialReq_v21.0                               1 

 

Attachment A-1           Additional Servicer – Initial Requirements                                                           Required by 8/31/09 unless otherwise noted          TABLE OF CONTENTS    General Statement ................................................................................................................. 3    Financial Reporting ................................................................................................................ 3    Treasury ...................................................................................................................................... 5    Transaction Management ....................................................................................................  6    Internal Controls ...................................................................................................................... 7    Accounting ................................................................................................................................. 9    Reconciliations ......................................................................................................................... 9    Additional Reporting ............................................................................................................ 12    Security ...................................................................................................................................... 12    NSLDS ....................................................................................................................................... 13    Unique Client/Lender Requirements for Federally Serviced Portfolio ........... 14    Loan Conversion ................................................................................................................... 16          All_InitialReq_v21.0                                                         2 

 

Attachment A-1   General Statement  It is the intent of the Department to procure a performance-based contract(s) that  promotes competition and provides best of business services. To achieve this goal, the  Department expects each servicer to provide commercially available services that will  yield high performing portfolios and high levels of customer satisfaction. The following  statements apply:    -  Servicers will be required to meet all statutory and legislative requirements.  -  Servicers will use their own discretion in deciding to provide services or business     functionality that is recommended but not required.   -  Servicers may leverage all borrower repayment channels while maintaining existing     branding provided all federally held loans are clearly distinguished and identified,     and borrowers are directed to make payment directly to the Department via a U.S.     Treasury lockbox or electronic payment service.   -  Small differences due to rounding in various calculations are understood and     accepted providing the calculation itself is in compliance with federal regulation.   -  The Department will allocate volume based on defined and understood performance     metrics.   -  The Department does not intend to provide additional service level requirements.     The Department does, however, expect best of business practices to be deployed.   -  The Department will not require the use of the Department or FSA logo on letters,     web sites, etc.   -  Servicers will have full discretion to promote or not promote services as long as they     meet legislative and regulatory requirements and are cost neutral to the     Government.  -  Servicers will have discretion to provide services to schools.  -  Servicers may use their own authentication process as long as the process is fully     compliant with federal IT security guidelines.   -  With regard to split borrowers, it is acceptable for servicers to handle requests,     phone calls, etc. for all loans being serviced by that servicer, regardless of the holder     (Federal or Non-Federal), as long as all federal laws and regulations are met.    Financial Reporting  1.  The servicer shall uniquely identify each specific activity (e.g., Collection of Principal,     Collection of Interest, etc.) in the transaction level data.  2.  The servicer shall provide required accounting reports. A preliminary list is presented     below.      a)  Trial Balance by Fund & a Working Trial Balance By Fund     b)  Detailed Trial Balance by Transaction Type     c)  Sub ledger Reconciliation Reports     d)  Transaction Tables and mapping (Crosswalk) to the Department’s general ledger        system, the Financial Management System (FMS), including transaction        descriptions and amount fields.     e)  Cash Receipt Detail     f) Cash Disbursement Detail     g)  Report of Debts Assigned by Assignor (Lender, GA, Intra-Fund Transfers)   All_InitialReq_v21.0                                                         3 

 

Attachment A-1      h)  Report of Loans Consolidated (by Fund, Cohort Year, Loan Program Type, Risk        Category)     i)  Report of Loans Rehabilitated (if applicable)     j)  Loan portfolio performance reports (by Fund, Loan Type, cohort year and risk        category).     k)  Collection Activity Report - The report summarizes by Current Month, Current        Quarter, and Year to Date for each Loan Type, the number of loans and the        amount of loans for each delinquency stage.     l)  Loans Transferred to and from the Department’s Default Management Collection        System (DMCS)- The report has 3 parts:                    a.  Loans Transferred to DMCS - Displays by transfer date the total                    number of borrowers, total number of loans, total principal balance                    at time of transfer, and date DMCS accepts the loans for each                    weekly transmission to DMCS.                  b.  Rejected and Re-transfer to DMCS - Displays by re-transfer date                    the total number of loans, total number of borrowers, total principal                    balance, and date DMCS accepts the loans for each weekly                    transmission to DMCS.                  c.  Transfers by Loan Type - Displays by transfer date, total number of                    borrowers, and total number of PLUS, Stafford, and Consolidation.  m)    DMCS Recall and Rehabilitation Tracking Report - The report displays by        month/year the total number of borrowers recalled from DMCS, total number of        loans recalled, total number of Rehabilitated loans and borrowers received from        DMCS.  n)   System Balancing Reporting of daily, weekly and monthly activity sent and        received with each interfacing partner at the Batch level and at the Transaction        Type, Transaction Count, Transaction Amount levels.  Reports activity sent and        activity received; and balances activity received to activity accepted and rejected.    o)   Financial Transactions Reconciliation Report of all daily, weekly and monthly        transactions posted on the servicing system for each interfacing partner.         Displays summary data by financial transaction type, number, and dollar        amounts.  p)   Work in Process Reports of activity received and accepted into the servicing        system, but not posted to borrower accounts for each interfacing partner.         Displays detail level transactions at the loan level for all financial transactions        received but not posted.  Includes applicable dollar amounts and reflects aging of        each transaction.  Reporting can include, but is not limited to, pending        disbursements, loan adjustments, consolidation payoffs, etc.  (See below for        specific unapplied cash reporting).  Daily cumulative reporting with the last daily        report for the month reflecting the WIP balances as of month end.  q)   Unapplied Cash Payment Recycle report:  Payment and Payment adjustment        activity received and accepted into the servicing system but not posted to        borrower accounts.   Reporting is by payment source (including, but not limited        to:  lockbox, electronic debit, IPAC, etc.)  Displays detail level cash payment and        payment return/adjustment transactions at the borrower level and includes    All_InitialReq_v21.0                                                         4 

 

 Attachment A-1          Treasury document information (schedule number, schedule amount and         schedule type) and aging of each transaction.  Daily cumulative reporting with the         last daily report for the month reflecting the WIP balances as of month end.  r)     Ad-hoc reporting capability and access for the Department (see        “Reconciliations”).           Treasury    3.  The servicer shall require entities making payments on Government loans      (borrowers, lenders, etc) to direct payments to a Treasury designated service      including:       a)  Treasury lockbox       b) Pay.gov      c) Remittance Express      d) IPAC.          Note: Receipts must be processed in accordance with guidance provided in         Treasury Financial Management (TFM), available at         www.fms.treas.gov/tfm/index.htm  4.  The servicer shall establish an interface with the Treasury lockbox service for the      receipt of payment posting file and returned payments files.   5.  The servicer shall establish an interface with Pay.gov for the receipt of ACH debits      and credit card payments.   6.  The servicer shall establish an interface for Remittance Express (REX) to support     receipt of ACH credits. REX provides FSA and the servicer with download capability     of an activity file with optional fields for identifying borrower accounts.    7.  The servicer shall establish an interface for the receipt and processing of Inter-    Governmental Payment and Collection (IPAC) systems payments. IPAC provides     FSA and the servicer with download capability of an activity file with optional fields     for identifying borrower accounts.  8.  The servicer shall post payments to the borrower accounts on the same date of     receipt of payment information from Treasury. If the servicer directly receives     payments, those payments will be deposited to Treasury on the day of receipt.  9.  The servicer shall maintain a recycle or unapplied file of any payment/payment     return transactions that cannot be posted to a borrower account. The servicer shall     perform due diligence to research payments held in suspense for the purpose of     resolving the unposted items including: posting payment to appropriate borrower     account; refunding to remitter; or escheatment to Treasury.  10. The servicer shall obtain daily deposit information from Treasury's Ca$hLinkII     system to support accounting processes and controls, such as daily and monthly     reconciliations.  11. The servicer shall maintain proper controls over payment posting and accounting     activities, and perform daily and monthly required reconciliations.  12. Issuance of Refunds - The servicer shall promptly manage credit balance accounts,     and other payments and accounts requiring a refund. The Servicer shall process     refund transactions to borrowers (borrower overpayments), lenders (such as     consolidation overpayments), etc.     All_InitialReq_v21.0                                                         5 

 

Attachment A-1      a)  The servicer shall establish an interface and process payments refunds via        interface via interface with FSA's Financial Management System (FMS) using the        FMS standard file format (see FMS Attachment A).     b)  Batches of refunds shall be subject to FSA review and approval.     c)  The servicer shall receive and work from a Treasury Confirmation Report        available through Treasury's Government-Wide Accounting System (GWA). This        confirmation data will be used to provide information to borrower inquiries on        refund status.  The GWA report confirms the completion of processing on a        batch, and provides the first and last check number for the batch.     d)  The servicer shall receive a report of Treasury Cancellations, maintain        cancellation data, and shall provide information for borrower inquiries and        support re-issuance of refunds.     e)  The servicer shall perform due diligence on cancelled refunds, on issuance of        validated refunds, and will follow Treasury guidelines for escheatment.     f)  The servicer shall request FSA to cancel refunds, when appropriate.     g)  The servicer shall use FSA's student application internet gateway (SAIG) to        transmit refund requests to FMS.     h)  The servicer shall pass Treasury cancellation data to FMS using the FMS        standard file format (see FMS Attachment A).      Transaction Management  13. The servicer shall establish a system and processes to correctly record all     transactions on their database and to post summary transactions to the FSA’s     general ledger (FMS) on the same business day they are generated.  14. All servicer transactions shall include all fields as required by FMS and all amounts     applicable to each transaction type.  15. All servicer transactions must pass all FMS edits for posting into the general ledger.  16. The servicer shall ensure all transactions are reversible.  17.  The servicer shall provide unique transaction reporting for each type of loan activity.  18. All servicer transactions will be accurately translated (mapped) from the Servicer's     subsidiary ledger to FSA's general ledger (FMS).  19. The servicer shall maintain both the posting date and effective date of the     transactions on their system.  20. The servicer shall provide an audit trail that efficiently links their detailed transactions     in the subsidiary ledger to summarized transactions in FSA's general ledger.     Transactions must have sufficient audit trail to support efficient tracing.   21. The servicer shall include original Treasury document numbers on applicable     transactions, in addition to any system created document numbers (including but not     limited to:  SF215, SF5515, SF1166, SF1098, and SF1081).  The usage of Treasury     documents is described on the web site http://fms.treas.gov/index.html.  22. The servicer shall assign and retain the Credit Reform Code (CRC), recording and     reporting on all loan related transactions at the CRC level.  Federal Credit Reform    Act legislation and Treasury guidelines for reporting are described on the web site     http://fms.treas.gov/index.html. Appendix A (CRC Codes) of Attachment C (FMS File     Layouts) describes how CRC codes are generated.   All_InitialReq_v21.0                                                         6 

 

 Attachment A-1       Internal Controls   23. The servicer shall incorporate a system of internal controls consistent with federal      laws, regulations, policies and authoritative guidance. These laws, regulations, and      guidances include, but are not limited to: Federal Financial Management      Improvement Act (FFMIA); Federal Managers' Financial Integrity Act (FMFIA); CFO      Act; Government Performance and Results Act (GPRA); GAO's Green Book; OMB      Circulars A-123, 1-127, and A-130; Joint Financial Management Improvement      Program (JFMIP); and Treasury Financial Manual (TFM).   24. The servicer's procedures and systems shall include a system of internal controls      that ensures resource use is consistent with laws, regulations and policies;      resources are safeguarded against waste, loss, and misuse; and reliable data are      obtained, maintained, and disclosed in reports. Appropriate internal controls shall be     applied to all system inputs, processing and outputs.     Examples of Internal Control Standards to be implemented by the servicer include     the following:     a)  Review and Reconciliation: Records are examined and reconciled to determine        that transactions were properly processed and approved.     b) Execution of Transactions: Independent evidence is required to be maintained to        ensure that authorizations are issued by persons acting within the scope of their        authority and transactions conform with such authority.     c)  Segregation of Duties: Proper segregation of duties is required to exist among        functions including: authorization, execution, recording and reviewing        transactions, custody of assets, and performing reconciliations.     d)  Qualified and continuous supervision is required to be provided to ensure that        proper internal control is maintained.     e)  Access to and Accountability for Resources: Access to resources and custody        and use of resources is required to be assigned and maintained.    25. The servicer shall provide FSA with supporting documentation for FSA's OMB     Circular A-123 annual review, the annual Financial Statement Audit, and other audits     and reviews (as further described in the Requirement #29 below on Audit Support     Services and in Audit Attachment A, “Audit Support Requirements”).  26. The servicer shall consult with FSA during FSA's OMB Circular A-123 annual review     process and for other audits, so that FSA can: (a) maintain its understanding of the     servicers controls (in the context of GAO Internal Control Standards and the     Committee on Sponsoring Organizations (COSO) control framework), (b) maintain     FSA documentation depicting the servicer's controls and process flows (as further     described in Requirement #29 below on Audit Support Services and in the     attachment, "Audit Support Requirements"), and (c ) maintain FSA's test plan, which     will call for the provision of supporting materials from the servicer.  27. The servicer shall be responsible for resolving all deficiencies identified during audits     and participating in corrective action plans as needed.  28. The servicer shall provide FSA with support for conducting FSA site visits to servicer     centers of operation. The purpose of the site visits will be to enable and enhance     FSA's plans for the conduct of its A-123 review. In addition, during the site visit, FSA    All_InitialReq_v21.0                                                         7 

 

Attachment A-1      will observe the execution of selected processes for compliance with stated     procedures and system function.  29. The servicer shall provide Audit Support Services, upon request, including but not     limited to the following audits and reviews.  The “Audit Support Requirements”     document attached provides additional information on the annual Financial     Statement Audit and describes the “Prepared by client” (or PBC) process that will be     used by the auditor and/or FSA to submit requests for documentation, data, and/or     walkthroughs and for the servicer to fulfill these requests.:     a)  FSA’s annual Financial Statement audits;     b)  Assessments of internal controls in accordance with FMFIA and OMB Circular A-       123, Appendix A;     c)  Program-specific financial and compliance audits conducted by GAO, OIG,        and/or OMB;     d) FISMA audits;     e)  Certification and Accreditation reviews;     f)  Internal reviews;      g)  Contract oversight activities; and      h)  Agreed Upon Procedures Audits for Loan Purchase Programs.        This support generally includes, but is not limited to: making resources and facilities        available, participating in audit planning (such as to determine when resources would be        made available and for what purpose), responding to “prepared-by-client” (PBC)        requests, reporting status, and remediating deficiencies identified. At a minimum, PBC        requests will include: interviews, access to process and system documentation, standard        and ad hoc queries and reports, and general questions on processes, systems, data,        and/or other matters.  30. The servicer shall meet requirements for a Type II SAS 70 audit. It is anticipated that     performance of the Type II SAS 70 audit with an unqualified opinion and submission     of the resulting work papers will eliminate or substantially reduce audit work    performed by various auditors, internal and external to the Department, as part of    the Department-wide and Government-wide annual audits. As part of their contracts    with various lenders, servicers also normally have a SAS 70 audit performed    annually by a qualified independent auditor.          a)  For IT controls, the servicer shall supplement the Type II SAS 70 with              additional agreed-upon procedures resulting in an audit consistent with              GAO’s Federal Information System Control Audit Manual (FISCAM).  The              results of these procedures should be conducted and reported at least              annually, with a year-end of 6/30.  Further, the servicer shall provide FSA              with a “bridge letter” covering the period from 6/30 to 9/30 indicating no              changes to the control environment.           b)  For operational controls, the servicer shall ensure that the Type II SAS 70              covers all GAO Internal Control Standards or COSO Components (e.g.,              control environment, risk assessment, control activities, information and              communication, and monitoring) for those transactions processed by the              servicer.  The results of these procedures should be conducted and              reported at least semi-annually covering the periods 1/1 – 6/30 and 7/1 –              12/31.     All_InitialReq_v21.0                                                         8 

 

 Attachment A-1    Accounting    31. The servicer shall create a financial interface between the FSA servicer and FSA      Financial Management System (FMS) to provide financial data to FMS on a daily,      weekly and monthly basis.       a)  The data and data layouts to be provided within this interface are described in         the FMS Attachment C – FMS File Layouts      b)  Submission / send rules for these transmissions are:          1.  In addition to daily transaction files, servicer shall send weekly (summary) and           monthly (interest and adjustment) files to FMS.        2.  Servicer shall use secure FSA’s SAIG mailbox to place daily, weekly and           monthly files on the FMS server for processing in FMS.  32. The servicer shall conduct accountancy, ensuring that transactions of the servicer’s     subsidiary ledger are accurately recorded in the FMS general ledger, to include:     a)  Managing the accounting transaction processing between the subsidiary ledger        and the general ledger.     b)  Preparing procedural instructions and execution of manual procedures related to        the preparation of accounting transactions.     c)  Reconciling cash, accounts receivable, accounts payable, and other general        ledger accounts.     d)  Correcting all differences between the subsidiary ledger balances and the control        account balances in the general ledger.     e)  Assisting FSA, FMS, and CFO in posting financial data and recommending        alternatives to resolve rejected activity and variances.            Reconciliations   33. The servicer shall perform reconciliations of balances and activity as requested, that      meet the following general requirements:       a)  Reconciliation activity should demonstrate that all required data is transmitted to        the Department and that all omissions, duplications of data, and recording errors        are detected and corrected timely.     b)  All reconciliations and financial accounting will be inclusive of principal, interest        and fee amounts.     c)  Monthly reconciliation between Servicing Trial Balance by Portfolio and FSA’s        general ledger (FMS) trial balance for each individual balance sheet account        (balances and activity).      d)  All programs are to be accounted, reported and reconciled individually (distinct         portfolios).      e)  Portfolio balances must be supportable at the loan level.      f)  Unless otherwise instructed, all reconciliation processes must identify and define         specific transactions causing differences.      g)  Unless otherwise instructed, all requirements apply to each portfolio.      h) Monthly reconciliations are due to FSA by the 8th calendar day of the subsequent         month. (e.g. Reconciliations for the month of June are due July 8th.)     i)  Monthly reconciliations require contractor review by at least one level of        management.     All_InitialReq_v21.0                                                         9 

 

 Attachment A-1       j)  Monthly reconciliations require the signature of the preparer and reviewer and        the date of signatures.     k)  Signed monthly reconciliations and all necessary supporting documentation are         to be provided to FSA in Adobe .pdf format.       l)  The servicer shall provide reports in the file format requested by FSA. File format         types would include, but are not limited to: the Microsoft Office Professional Suite         (Excel, Word, Access, etc.), Adobe (.pdf), text (.txt), comma delimited (.csv) etc.      m) Daily reconciliations are not standard deliverables to FSA but are considered         operational processes and subject to internal control testing.       n)  Unless otherwise instructed, all reconciling items arising from monthly         reconciliations are to be researched and cleared within the month subsequent to         the reconciled period. For example, reconciling items for the month of June must         be cleared within July. This eliminates repeat reconciling items.       o)  Unless otherwise instructed, all reconciling items arising from daily reconciliations         are to be researched and cleared within 48 hours.       p)  Daily reconciliations include tracking and resolution of all work in process activity.   34. The servicer shall reconcile loan sales as follows:      a)  Perform daily 3-way reconciliation between invoice (pre-sale report), Bill of Sale        from selling lender, and conversion reports from servicing system. Offeror must         be able to produce the reconciliation at the deal, invoice, lender and summary        level.     b)  Perform daily and monthly over/underpayment reconciliation between the Selling        lender, servicing system, FMS and Treasury.     c)  Maintain resulting accounts receivable/accounts payable reconciliation of        over/underpayment activity between the Selling lender & FMS.  To include:                        1.  Maintain balance of receivables from sellers and payables to                      sellers.                   2.  Invoice sellers for accounts receivables.                   3.  Process FMS accounts payable refund request to sellers (see                      Refund Reconciliations for specific requirements).                   4.  Process overpayment refund collections from Selling lenders.                   5.  Maintain clear audit trail of overpayment refund transactions                      processed to Treasury deposits.      d)  Daily reconciliation to assure that the FMS net funding transactions purchasing        loans equal the net loans accepted and either posted or pending posting        (traceable in work in process files) to the servicing system by the next day.     e)  Daily reconciliation of activity sent from sellers to accepted and either posted or        pending posting (traceable in work in process files) on the servicing system.  35. The servicer shall reconcile transfers as follows:     a)  Servicer will provide for loan exchange and reconciliations between servicing        system and FSA servicing systems. Servicer will maintain portfolio integrity upon        re-entry into the servicing system.     b)  Perform daily reconciliation on transfers of loans between the Servicing system        and each FSA servicing system.      All_InitialReq_v21.0                                                        10 

 

 Attachment A-1       c)  Perform monthly reconciliation of transfers of loans between the servicing system        and each FSA servicing system.   36. The servicer shall reconcile cash collections as follows:           NOTE:  The terms  “recycle file”, “suspense account” and “unapplied file” are           defined as the transactional level cash payments and payment adjustments            received but not posted to borrower accounts on the servicing system.         a)  Record all incoming check & electronic collections received (deposits) to the         cash clearing account (level 1); reverse collection transactions from cash clearing         account when posted to borrower accounts (level 2).         b)  The application process for postable cash payments and payment returns must         be completed within 48 hours of collection receipt.      c)  Reconcile all cash activity to Treasury daily. This includes, but is not limited to:         electronic funds transfer (EFT), checks (SF 1166), Intra-governmental Payment         and Collection (IPAC) System/SF 1081 payments, internal electronic cash         transactions, and any other payments to or deposits with Treasury.      d)  Perform daily collection reconciliation among the various Treasury receipt         channels (i.e. Lockbox, Pay.gov, Remittance Express, and IPAC), servicing         system and FMS general ledger. Collection transactions are to be posted to FMS         daily.      e)  Daily reconciliation to ensure Total Cash Received (check and electronic) =        (Total Cash Payments Posted to Borrower’s accounts + New Recycle File Items).       f)  Daily reconciliation to ensure Outstanding Recycle File Balance = Beginning         Recycle File Balance + New Recycle File Items - Recycle File Items Posted to         Borrower Accts - Refunds of Misdirected Payments - Treasury Escheatment.      g) Monthly reconciliation of the Servicer’s unapplied cash payment recycle file         balance at the servicing system to the FMS Unapplied Collections general ledger         account.      h)  Monthly reconciliation of Treasury bank statement to FMS and Treasury.    37. The servicer shall reconcile refunds as follows:      a)  Maintain daily and monthly three-way reconciliation of refund activity among the         servicing system, FMS accounts payable system and Treasury.         1.  Process overpayment refunds, refund cancellations, and stop payments            posted to borrower accounts.         2.  Refund transactions processed on the servicing system for misdirected            payments.         3.  Track and reconcile refund transactions to refund requests (FMS accounts            payables) to Treasury confirmations.         4.  Track and reconcile refund cancellation transactions processed on servicing            to refund reversals in FMS to Treasury cancellations.   38. The servicer shall provide ad hoc reporting tools to support reconciliations:       Servicing Trial Balance by Portfolio – using FSA/FMS transactional account      mapping, must be capable of producing daily, weekly, ad hoc, and monthly trial      balances at a summary and detailed transactional. If multiple databases are      employed each database will be reported individually as well as on a consolidated      basis.      All_InitialReq_v21.0                                                        11 

 

 Attachment A-1    39. The servicer shall perform daily, weekly and monthly system balancing of all data        transmitted to and from the servicing system.             a)  Balancing will be done at the transaction type, transaction count and               transaction amount(s) levels.            b) Balancing will ensure data sent = data received; and data received will =              the sum of data accepted and rejected.           c)  Rejected data will be researched, resolved/resent by the originating              system.     Additional Reporting   40. The servicer shall provide a data file (daily for the previous day’s activity, monthly for      previous month's activity) to FSA containing standard data elements needed for      additional financial and portfolio analysis.  FSA will determine the type of file,      transfer specifications, and specific data elements to be included in the file.     41. The Servicer shall ensure that the balances reported to FSA within the daily/monthly      data files reconcile to the balances reported in the Servicer’s servicing system as      well as to the Servicer’s FMS accounting interface file.    42. The servicer shall provide reasonable additional support as needed (e.g., data files,      reports, source documents) to substantiate reported activity and balances.      Security   43. The Servicer shall restrict access to FSA held loans being serviced from all other      loans on their system.  Access must be limited to personnel who have obtained      proper clearances and who are specifically authorized to view or perform     transactions and services on loans held by FSA.  44. The servicer shall provide previous security information from the past three years to     include a discussion of security incidents; and audits like SAS 70s, Sarbanes Oxley     reviews, independent security assessments, risk assessments, and/or internal     reviews along with the applicable remediation plans.  45. The servicer shall provide its system's most current vulnerability scan results, and     remediation plan.  46. The servicer shall provide existing security documentation like its security     organizational structure, its system's boundary, existing security policy, procedures,     and plans.  47. The servicer shall complete personnel background screening requirements ASAP.     a)  All personnel are required to complete a federal background clearance based on        their position risk level. Background clearances are submitted on line via Office of        Personnel Management (OPM)'s Electronic Questionnaire for Investigations        Process (e-Qip). Contractor employees who have undergone appropriate        personnel security screening for another federal agency may submit proof of        personal security screening for validation. (Attached Security Attachment A -       Department of Education's Directive for Contractor Employee Personnel Security        Screenings.)     b)  Preliminary clearances must be completed for high-risk positions prior to working         on Federal Student Aid systems or data (This process can take 2-6 weeks).     All_InitialReq_v21.0                                                        12 

 

Attachment A-1         Moderate and low risk positions must submit background clearance paperwork        prior to working on Federal Student Aid computer resources.      c)  Non-U.S. Citizen may be assigned to a High Risk IT (6C) level position, provided:        he/she is a Lawful Permanent Resident of the United States and has resided        continuously in the United States for a minimum of three (3) years. Non-U.S.        Citizens living outside of the United States cannot have the capability to access        Federal Student Aid systems or data.  48. The servicer shall complete a self-assessment of it's system and facilities based on     NIST SP 800-53 controls, identify security deficiencies/gaps, and create a     remediation plan for the identified deficiencies.  49. The servicer shall agree to provide support for all actions required for a formal     security authorization and continuous monitoring program as defined by NIST SP     800-37.  50. The servicer shall create a project plan that they will follow to develop a NIST SP     800-18 compliant System Security Plan created in the Department of Education     format.  51. The servicer shall bundle the requested information in requirements 39 - 45 above     as attachments to a discussion document that provides a discussion for each     requirement and artifact submitted. The cover page for this package will include a     self-certification document identifying the system's security posture to include its     overall security risk. The cover page will be signed by the servicer's senior security     official and program manager attesting that the information within the package is     accurate.    NSLDS   52.   The servicer shall report in the same format as a Guaranty Agency (GA) for all     loans serviced for Federal Student Aid by creating an NSLDS data base extract file     containing FFEL loans and transmit the FFEL Loans data to NSLDS using the     reporting requirements detailed in the GA Data Provider Instructions with minimal     differences.   The Servicers will be provided a GA and Lender Code to be associated     with each loan.  The Servicers will report the date of default and loan status for     default as day 271, using NSLDS loans status fields. The Cohort Default Rate date     will be reported at day 361, using the NSLDS Claim Payment fields.  A list of these     filed changes will be provided.    The GA Data Provider Index of fields that are    required of the FFEL servicers in addition to more information on Guaranty Agency    Data Provider Instructions can be found at the GA DPI Link    (http://ifap.ed.gov/nsldsmaterials/0605DPInstNSLDS.html).  53. The servicer shall use the NSLDS provided DataPrep software (or equivalent) to     perform Extract Validation and create a Submittal file.  54. The servicer shall send the submittal file to NSLDS on an established weekly     schedule.  55. Once loans have been reported, the servicer shall report to NSLDS all FFEL open     loans. Closed loans must be continually reported until closed status is successfully     accepted by NSLDS. This includes loans that are closed prior to initial NSLDS     reporting.    All_InitialReq_v21.0                                                        13 

 

 Attachment A-1    56. The servicer shall retrieve the Load Process Error file from NSLDS for each      submittal. The servicer must review errors and correct as many as possible before      the next weekly submittal.   57. The servicer shall identify when key borrower indicators have change and report on      both the old data and the new data.   58. The servicer shall work with other data providers—including other GAs, the Direct      Loan Program, the Debt Management Collection System, Perkins schools, and the     Common Origination Disbursement System—to resolve identifier conflicts including     assigning pseudo SSNs where appropriate (see NSLDS DPI).  59. The servicer shall update date, amount and reason for defaults based on current      default criteria if the loans are transferred to DMCS or CDDTS. Once a loan has      transferred to DMCS or CDDTS, stop reporting on the loan unless it is transferred      back. When transferring loans the borrower and loan identifiers must be the same      identifiers reported to NSLDS. For Rehabilitated Loans, the Date or Maturity should      not change.    60. The servicer shall report as a GA for all loans serviced for Federal Student Aid.   61. The servicer shall utilize NSLDS on-line updating functionality to resolve customer      service issues and to report loan discharge and Teacher Loan Forgiveness      information.   62. The Servicer shall transmit data to and from NSLDS via the Student Aid Internet     Gateway (SAIG) or other approved secure transmission methods.  Additional     information on SAIG transmissions can be found at     https://www.fsadownload.ed.gov/mainframeguide.htm.   63. The servicer shall meet NSLDS reporting requirements and quality standards. All     data submitted to NSLDS must be as complete and correct as possible.  64. The servicer shall accept and store enrollment data and updates from NSLDS as the     official source of such data.   65. The servicer shall continue to follow Common Manual Delinquency reporting to     schools.  66. The servicer shall provide additional data elements to the re-engineered NSLDS.     These elements will include, but not be limited to: delinquency data, discharge data,     forgiveness data, and school/ISIR data. This data has been worked through the     community on the FFEL Data Standards Team and can be found online.  67. The servicer shall work with FSA data providers on changes to interfaces as re-    engineering projects occur.   68. The servicer shall accept a file from NSLDS when receiving loans from DMCS and     CDDTS in order to update the records with missing data elements.           Unique Client/Lender Requirements for Federally Serviced Portfolio   69. The servicer shall use the client name Department of Education for this portfolio.   70. The servicer shall use the Government assigned client LID for this portfolio.   71. The servicer shall use the Government assigned Guarantor Code for this portfolio.   72. Each servicer will be assigned a unique code.     All_InitialReq_v21.0                                                        14 

 

 Attachment A-1    73. The servicer shall maintain unique standard reporting for loans within each Program      (i.e. 08/09 Loan Purchase Program, Puts from 08/09 Participation Program, 09/10      Loan Purchase program, Conduit, Direct Loan, etc.)    74. The servicer shall process refunds via Treasury checks. Refunds are required for      overpayments greater than or equal to $5.00.    75. The servicer shall perform small balance processing as follows:            a)  Overpaid Amount – Small balance write-ups of overpaid balances less              than $5.00.           b)  Underpaid Amount – Small balance write-off of underpaid balances less              than $25.00.  76. The servicer shall have the ability to charge late charges, but no assessment of late     charges on loans in the ED portfolio is to be assessed at this time.  77. The servicer shall have the ability to charge other fees (i.e. NSF), but no charges for     other fees on loans in the ED portfolio are to be assessed at this time.  78. The servicer shall have the ability to support borrower benefit plans required by each     loan purchase (PUT) program.  79. 799/LARS reporting is not required for ED portfolio.  80. The servicer shall have the ability to perform collection and due diligence activities      "as required by legislation and/or regulations." Servicers will be required to provide     collection and default aversion activity on loans serviced under this contract as long     as the loan remains on the servicer’s system. If a borrower reaches the 360 days     delinquent, the servicer will be required to transfer the loan to the DMCS.     a)  The servicer shall send and electronic transfer file to DMCS with required         information about the defaulted borrower and the defaulted loan.      b)  The servicer shall provide access to all required collateral information for the         defaulted loan.      c)  The servicer shall accept and resolve rejected records received from DMCS.   81. The servicer shall process discharge transactions with required supporting      documentation following the required regulatory guidelines. The servicer is required      to facilitate the timely and accurate processing of discharge requests by ensuring      that complete loan discharge documentation for the individual is submitted. The      servicer is also required to make a determination based on complete loan discharge     documentation and applicable guidelines. Depending on the discharge type, the     Department reviews discharge decisions through a sampling methodology or     conducts a complete review.  82. The servicer shall transfer loans to the Conditional Disability and Discharge System     once loans have been determined as eligible to be transferred.  83. The servicer shall obtain school information needed from the Postsecondary     Education Participants System (PEPS).  84. The servicer shall be prepared to provide procedure and/or training materials when     requested by ED. ED may review these documents to ensure regulatory and     legislative requirements are met.   85. The servicer shall be required to transfer loans to, or accept loans from, another     servicer at the request of ED.     All_InitialReq_v21.0                                                        15 

 

 Attachment A-1    86. The servicer shall provide access to account level information and collateral for all      federally held loans using technology supported by ED (web-based, terminal      emulation, etc.).      Loan Conversion    The loan conversion process occurs when a seller requests ED to purchase loans, and   ED validates the seller’s approval to participate, checks the eligibility of the loans,  provides payment to the seller, and takes ownership of the loans as federally held  assets.    Below are the requirements a servicer must complete in addition to the existing   requirements to service an FFEL loan:      87. The servicer shall create and maintain a Loan Purchases Tracking Log - to include:      Checklist of loan purchase activities, status of activities, and loan counts/amounts.      SEE Conversion ATTACHMENT A – Sample of Loan Purchases Tracking Log.   88. The servicer shall provide Loan Purchases Tracking Log to FSA, CFO, and OCFO     on a periodic basis.  89. The servicer shall accept 45-day notices submitted by sellers via email. SEE      Conversion ATTACHMENT B – Sample of 45 Day Notice.   90. The servicer shall inform FSA when a 45-day notice has been received.    91. The servicer shall send an acknowledgement of receipt of the 45 Day notice to the      Seller via email.   92. The servicer shall validate, with FSA contact, the status of the seller’s Master Loan      Sales Agreement (MLSA).   93. The servicer shall notify seller if any additional MSLA approvals or documentation      are needed for the sale and schedule the sale date with the seller's Servicer.   94. The servicer shall notify FSA of the status of the MLSA package, if necessary.   95. The servicer shall perform testing of the loan conversion transfer file process with      sellers. SEE Conversion ATTACHMENT C – Sample of a loan conversion transfer      file layout.   96. The servicer shall receive loan conversion transfer file from the seller via FTP or      other approved transfer method.   97. The servicer shall review the loan conversion transfer file and notify FSA, CFO,      OCFO of differences between the 45-day notice and loan conversion file as needed.   98. The servicer shall perform edits on the loan conversion transfer file.  Note: edits may      vary based on purchase program.   99. The servicer shall prepare report identifying any errors with the loan conversion file      and/or any loans not eligible for sale.    100.  The servicer shall provide results of edit errors to the seller, FSA, and designated      parties. The servicer shall work with the seller to resolve errors.   101.  The servicer shall send an acknowledgement of receipt of the 45 Day notice to      the Seller via email."   102.  The servicer shall work with the Seller to confirm sales parameters, including but     not limited to:            a)  Identify any loans in the sale have any liens on them.    All_InitialReq_v21.0                                                        16 

 

 Attachment A-1             b)  Identify if the loans are part of a Put from Participation or a straight Put to               the Department.            c)  Identify timing for receipt of Loan Conversion Transfer file from the               Servicer, if needed.   103.  The servicer shall calculate pre-sale totals and final purchase price after errors      have been resolved.    104. The servicer shall create a pre-sale detail loan report including loan details for all       loans included in the sale. SEE Conversion ATTACHMENT D – Sample of pre-sale       detail loan report.   105. The servicer shall transmit pre-sale detail loan schedule to seller for validation by       seller.   106. The servicer shall create invoice total file and submit to SAIG mailbox to be 'swept'       by FSA CFO. SEE ATTACHMENT Conversion E – Invoice total file layout.   107. The servicer shall receive Bill of Sale and related documents. SEE Master Loan       Sale Agreement – Exhibit B – Sample of Bill of Sale.  108. The servicer shall validate Bill of Sale package is authorized and complete.  109. The servicer shall validate Schedule and Security Release Certificate (SRC) has       been received if loans are subject to a security lien. SEE Master Loan Sale       Agreement – Exhibit E – Sample of Schedule and SRC.   110. The servicer shall flag loans subject to a security lien in Tracking Log.   111. The servicer shall accept Notice of Assignments from seller and notify FSA that       payment will be sent to designee if a Notice of Assignment is received. SEE       Conversion ATTACHMENT F – Sample of Notice of Assignment.   112. The servicer shall compare FSA Servicer pre-sale totals to seller's pre-sale       detailed listing of loans sold - identify and resolve differences.    113. The servicer shall request seller to provide updated Bill of Sale documents as       needed.   114. The servicer shall validate FSA approves/disapproves invoice of payment.   115. The servicer shall process the loan sale transaction on servicing system when       notified payment has been made. Loans now reside on FSA Servicer's system.   116. The servicer shall reconcile the Servicing System balance and activity to FMS for       each purchase deal. Resolve and differences and provide the reconciliation to       FSA.   117. The servicer shall reconcile the Servicing System balance and activity to FMS on a       monthly basis. Resolve and differences and provide the reconciliation to FSA.   118. The servicer shall receive collateral documentation and review for completeness.    119. The servicer shall identify and notify seller of missing collateral documentation,       work with seller to obtain required documentation.   120. The servicer shall notify FSA of receipt of collateral and completeness of       documentation.   121. The servicer shall provide storage for, and access to, collateral documentation.   122. The servicer shall accept, edit and process loan adjustment files from Servicer       after close of sale.    123. The Servicer shall coordinate with the Seller to receive and process any sales       transition and post sale transactions, including but not limited to, borrower     All_InitialReq_v21.0                                                        17 

 

Attachment A-1       payments, loan cancellations, school refunds, NSF transactions for loans      purchased by the Department.  124. The Servicer shall provide a process to Put any ineligible loans back to the Seller,      as needed (process "Unput" transactions).        All_InitialReq_v21.0                                                        18 

 

Attachment A-2                  Additional       Servicer      IINNTTEERRMMEEDDIIAATTEE        Requirements                     All_IntermediateReq_v6.0   All_IntermediateReq_v6.0 1 

 

Attachment A-2   Additional Servicer – Intermediate Requirements                 Required by 3/31/10 unless otherwise noted        TABLE OF CONTENTS    General Statement ........................................................................................... 3  Financial Reporting .......................................................................................... 4  Treasury ............................................................................................................. 4  Transaction Management .............................................................................. 5  Internal Controls ............................................................................................... 5  Accounting ......................................................................................................... 5  Reconciliations .................................................................................................. 5  Additional Reporting ........................................................................................ 5  Security ............................................................................................................... 6  NSLDS .............................................................................................................. 10  Additional Requirements for Federally Held Portfolio ............................ 10  Loan Conversion ............................................................................................ 11  Records Management ................................................................................... 11        All_IntermediateReq_v6.0                                               2 

 

 Attachment A-2    General Statement           It is the intent of the Department to procure a performance based contract(s)   that promotes competition and provides best of business services.   To achieve  this goal, the Department expects each servicer to provide commercially  available services that will yield high performing portfolios and high levels of   customer satisfaction. The following statements apply:         -    Servicers will be required to meet all statutory and legislative           requirements.     -     Servicers will use their own discretion in deciding to provide services or           business functionality that is recommended but not required.      -     Servicers may leverage all borrower repayment channels while           maintaining existing branding provided all federally held loans are           clearly distinguished and identified.      -     Small differences due to rounding in various calculations are           understood and accepted providing the calculation itself is in           compliance with federal regulation.       -     The department will allocate volume based on defined and understood            performance metrics.        -    The Department does not intend to provide additional service level            requirements.  The Department does, however, expect best of           business practices to be deployed.      -     The Department will not require the use of the Department or FSA logo            on letters, web sites, etc.        -    Servicers will have full discretion to promote or not promote services            as long as they meet legislative and regulatory requirements and are            cost neutral to the government.      -    Servicers will have discretion to provide services to schools.      -    Services may use their own authentication process as long as the            process is fully compliant with federal IT security guidelines.       -     With regard to split borrowers, it is acceptable for servicers to handle            requests, phone calls, etc. for all loans being serviced, regardless of            the holder as long as all federal laws and regulations are met.        All_IntermediateReq_v6.0                                               3 

 

 Attachment A-2       Financial Reporting      The following Financial Reporting Requirements are required to be implemented   by September 30, 2009:         1.  The servicer shall produce the Treasury Report on Receivables (TROR),         for each portfolio, on a monthly basis.  The report must meet all         Treasury/FMS guidance (See Treasury attachments A & B).  The TROR         must also:            a.  Be provided in Microsoft Excel Format;            b.  Be provided for the previous month by the 8th business day of the              current month;           c.  Include all supporting data / documentation.  The supporting               documentation must also be provided for the previous month (e.g.,              aging information, status information, etc.) in Microsoft Excel              format, by the 8th business day of the current month.     2. The servicer shall provide all remaining required accounting reports.             a. Consolidating Trial Balance (All Funds)           b.  Monthly & Annual Sub ledger Reports (to include Closing reports)           c.  Accounting Distribution Reports           d.  Specific Collection Reports (e.g. Lockbox, ACH Credits, ACH              Debits, Web payments, Credit Cards, etc.)           e.  Receivable Aging Reports (by Fund, Cohort Year, Loan Program              Type, Risk Category)           f.  Loan Portfolio Analysis           g.  SF-224 for cash transactions with Treasury ED Form            h.  Trial balance reports indicated under Reconciliation            i.  Loan portfolio performance reports (by Fund, Loan Type, cohort              year, & Risk Category)           j. Others as determined               Treasury       In 2010, Treasury will implement the Transaction Reporting System (TRS).  TRS   will be a centralized repository of detailed collection transaction information.  TRS   will provide integrated transaction and deposit reporting of revenue activity   across all collection systems.  Therefore, the servicer will be required to migrate   its data recipient interfaces for the Lockbox (checks and ACH credits), Pay.gov   (ACH debits and credit card payments), and CA$HLINKII (which reports detail for   ACH credits that are not processed via the lockbox servicer, and reports  summary for all deposits from all sources) to TRS. This requirement is estimated  to be effective by September 30, 2010.  Treasury’s web site contains further  information on the TRS project at http://www.fms.treas.gov/trs/index.html.    All_IntermediateReq_v6.0                                               4 

 

Attachment A-2     Transaction Management    NO Additional Requirements beyond the Initial Requirements      Internal Controls      3.  Effective from the first government fiscal year of operations (i.e., as of        9/30/2009), the servicer shall develop and execute the following reports in       response to financial statement audit “Prepared-by-Client” (PBC) data       requests or as requested by management to support other audits or       reviews:          a. Collections Download          b.  Write-Offs activity – Download Requirements & Documentation             Requirements          c.  Download of Transfers activity to DCMS          d.  Additional work products to support responses to auditor inquiries             and requests                          ** Refer to the FMS_Attachment_D document attached for additional       details on these requirements.                     4. The Servicer shall provide support to FSA in compliance with OMB        Circular A-123, Appendix C, which incorporates the Improper Payments       Information Act of 2002 (IPIA).       Accounting     NO Additional Requirements beyond the Initial Requirements      Reconciliations       5.  The servicer must demonstrate that all data transfers (e.g., interfaces,        files) are balanced across systems and reconciled at the transaction and        balance level and all exceptions noted are aged and resolved timely. The        servicer shall report aging of reconciling items on all reconciliations.  The        servicer shall resolve errors and/or variances timely, generally within one        month.      Additional Reporting       6.  The Servicer shall provide a Disbursement Date Change (Cohort Year)        Report (required to be implemented by September 30, 2009) - The report   All_IntermediateReq_v6.0                                               5 

 

 Attachment A-2          displays all disbursement date changes after each quarter end that         crossed cohort years.  It displays the Account Number, Loan Identification         Number, Principal Balances Outstanding, Interest Receivable Balances,         Principal Paid, and Interest Paid.      7.  The servicer shall support the FSA implementation of a ‘Data Warehouse’         including the conversion of the daily/monthly file transfers to the         warehouse.  FSA will determine the type of file, transfer specifications,         and specific data elements to be included in the file.                             Security      Federal Student Aid agrees with the Office of Management and Budget (OMB)  and Congress that the security of its data and IT resources is one of our highest  priorities.  Recognizing the need for agencies to have effective information  security programs, Congress passed the Federal Information Security  Management Act (FISMA) of 2002.  FISMA provides the overall framework for  ensuring the effectiveness of information security controls that support federal  computer operations and assets. FISMA requirements apply to all federal  contractors and organizations or sources that possess or use federal  information or that operate, use, or have access to federal information  systems on behalf of an agency.  FISMA mandates the use of the standards  created by the National Institute of Standards and Technology (NIST). and  Federal Student Aid has adopted those standards and guidance for securing its  information technology resources.         Federal Student Aid security requirements indicated below ensure the confidentiality,  integrity and availability of its data at a high level.  System controls need to be tested and  system documentation reviewed using an independent source.  If adequate security is in  place, Federal Student Aid will provide a formal security authorization to operate (ATO).   Additional detailed requirements can be found in NIST security standards, special  publications, and bulletins; OMB memorandums; and the Department of Education  (DoED) policies and procedures.  The primary document Federal Student Aid uses to  identify and implement controls is NIST SP 800-53. The latest version of this guidance  can be found at:  http://csrc.nist.gov/publications/nistpubs/800-53-Rev2/sp800-53-rev2-  final.pdf                                                 Personnel      8. All personnel are required to complete a federal background clearance         based on their position risk level.  Background clearances are submitted        on line via Office of Personnel Management (OPM)’s Electronic        Questionnaire for Investigations Process (e-Qip).  Contractor employees         who have undergone appropriate personnel security screening for another     All_IntermediateReq_v6.0                                               6 

 

Attachment A-2         federal agency may submit proof of personal security screening for        validation.   (Attached: Department of Education’s Directive for Contractor        Employee Personnel Security Screenings)     9.  Preliminary clearances must be completed for high-risk positions prior to        working on Federal Student Aid systems or data (This process can take 2-       6 weeks).  Moderate and low risk positions must submit background        clearance paperwork prior to working on Federal Student Aid computer        resources.       10. Non-U.S. Citizen may be assigned to a High Risk IT (6C) level position,        provided: he/she is a Lawful Permanent Resident of the United States and        has resided continuously in the United States for a minimum of three (3)        years.  Non-U.S. Citizens living outside of the United States cannot have        the capability to access Federal Student Aid systems or data.     11. All personnel are required to successfully complete initial security       awareness training within two weeks of employment and annual refresher       training.  The training can be completed on line using DoED’s security        training program.     12. Annual specialized training is required that is appropriate to job function.    Facility     13. Data Centers supporting Federal Student Aid systems are required to        have controlled access with working security cameras..     14. Data center access control lists must be kept current. .     15. Visitors must be logged and escorted at all times.     16. Power equipment and power cabling for the information system must be        protected from damage and destruction.  Facility failover power and        lighting are required for emergencies.     17. The facility must employ and maintain fire suppression and detection,        water damage controls, and temperature and humidity controls.     18. Alternate data center worksites are required to have the same protections        as the primary data center site.    Telecommunications     19. Data transfers of PII or other sensitive information must be encrypted        using NIST certified encryption methods (see NIST standard, FIPS 140-2)      20. All interconnections must be documented and have an Interconnection        Security Agreement in place.  (see NIST SP 800-47)     21. Wireless communication containing Federal Student Aid information is not        permitted within the data center.     22. The Federal Student Aid System Security Officer must approve all remote        access.     Contingency Planning and Recovery     23. A contingency / disaster recovery plan is required to provide continued        operational service within 72 hours of a major catastrophe.    All_IntermediateReq_v6.0                                               7 

 

 Attachment A-2       24. Contingency plans must be tested at a recovery site annually using both        DoED and Contractor personnel.     25. The recovery site(s) must be geographically separated from the        production site(s).     26. Data sanitation at the recovery site is required after testing.  (see NIST SP         800-88)      27. System backups must be encrypted and kept at an alternate location with         secured access.  Sensitive backup tapes must be marked and have a         secure transfer.  (Attached:  Federal Student Aid’s General Support         System and Major Application Backup Media Handling Policy &         Procedures)      Risk Management      28. Annual self-assessment of security controls is required.  .      29. Independent risk assessments will be completed prior to system’s        operation and then reassessed at a minimum of every three years.      30. Independent  security  controls assessment will be completed.     31. All identified vulnerabilities and security weaknesses will be captured and        corrective actions tracked through Federal Student Aids Operational        Vulnerability Management Solution (OVMS).  Security remediations must        be implemented to correct security deficiencies and appropriate evidence        must be provided to close actions.      32. Contractors will make themselves and the site available for security audits        and control assessments.  This includes interviews with key security staff,        data gathering and submissions, scanning support, and escort activities.     33. Federal Student Aid will have the right to test controls through        independent scanning within the boundaries of the Federal Student Aid        system and by other means like interviews, observations, and to        document reviews.     Security Documentation     34. The contactor will develop, implement, and maintain a current system        security plan (SSP) for the information system to provide an overview of        the security requirements for the system and a description of the security        controls in place or planned for meeting those requirements. Designated        officials within Federal Student Aid will review and approve the plan.  (see        NIST SP 800-18)     35. A contingency plan must be created, approved, and tested annually.     36. A configuration management plan must be created, approved, and        implemented.     37. Documented system boundaries are required. A documented inventory of        hardware and software utilized, telecommunication interconnections and a        network topology are required.  (Attached:  Federal Student Aid’s        Boundary Definition template).     38. System access authorizations and signed rules of behavior must be        maintained.     All_IntermediateReq_v6.0                                               8 

 

 Attachment A-2       39. Plans of Actions and Milestones that address security remediations are         maintained in Federal Student Aid’s Operational Vulnerability         Management Solution.      Security Monitoring and Detection      40. Network intrusion detection systems (NIDS) and host-based intrusion         detection systems (HIDS) are configured appropriately and continuously         monitored and updated if necessary.      41. Systems will have appropriate auditing capabilities enabled.       42. System logs are to be analyzed for suspicious activity.  Logs will be made         available to Federal Student Aid upon request.      43. Compliance monitoring established for configuration settings.      44. Routine network and database scans are scheduled.  The scan results are         analyzed and vulnerabilities identified. The identified vulnerabilities and         actions taken will be documented in OVMS.        45. Scans that identify web vulnerabilities will be completed.  Scan results will         be provided to FSA upon request. The identified vulnerabilities and actions         taken will be documented in OVMS.      46. Security  remediations  must be implemented to correct security        deficiencies and appropriate evidence must be provided to close actions.     Incident Response     47. Contractor must maintain an incident response plan that correlates to the        DoED plan.     48. Compromises of personal identifiable information (PII) must be reported         immediately so that the Department can comply with its reporting         requirements to report to U.S. Computer Emergency Readiness Team         (CERT) within one hour of the incident.       49. Contractor must preserve evidence and allow external forensic analysis         either on-site or through shipment of components.      50. Contractor  must  take appropriate actions for alerts and warnings provided         by DoED or through other sources.  Contractor will report status of their         actions as requested.      Security Configurations      51. Federal Student Aid data must be segregated from non-Federal Student        Aid data.     52. Security patches must be kept current and appropriately tested prior to        moving into production.      53. Server and device security configurations must be maintained in        accordance with NIST security configuration standards (See:        http://checklists.nist.gov/).     54. Passwords must meet Federal Student Aid’s password standards.        (Attached:  Federal Student Aid’s Password Parameters Policy &        Procedures)     All_IntermediateReq_v6.0                                               9 

 

 Attachment A-2       55. Change control management procedures must be documented and        followed.     56. Federal Student Aid must approve system changes prior to production        implementation.     57. Data will be safeguarded commensurate with the highest categorization        level based on FIPS 199.     Access Control     58. Federal Student Aid must approve all access to Federal Student Aid data        and all contractor access that can affect any component within the        system’s boundary.      59. Application access reports need to be sent quarterly to Federal Student        Aid for certification of access.     60. A listing of IT personnel responsible for operations and maintenance of        any Federal Student Aid system must be provided on a quarterly basis to        FSA for certification of access.     61. Access must be restricted based on least privilege. Role based access        controls should be defined and documented.        NSLDS        62. The Servicer shall provide the National Student Loan Clearinghouse         monthly updates to their federally serviced portfolio. National Student         Clearinghouse (NCS) will provide weekly updates to NSLDS for all FFEL        and DL loans in the FSA portfolio. NSLDS will provide the servicer with        weekly enrollment data that include NSC updates.     Additional Requirements for Federally Held Portfolio            63. The servicer shall receive collateral in imaged and paper format and if         received in paper format image it should be imaged in a format that can be         ported easily to another system (Non-proprietary)      64. The servicer shall verify collateral for all loans received in a sale within 45         days and if any collateral is missing the missing collateral will be obtained         from the seller.      65. The servicer shall provide for FSA access to the imaging and serving         system to view images, make annotations on borrower accounts and have         complete access to view FSA data.      66. The servicer shall provide a means for FSA to make a final determination         on eligibility of borrowers for entitlements, such as discharge due to         Closed School, Death, etc., and compromise offers.      67. The servicer shall report loans to NSLDS and credit bureaus.        68. The servicer shall cancel loans and make all financial adjustments when         needed.      69. The servicer shall place loans, where the borrower has applied for         bankruptcy, into a bankruptcy status, prepare a Proof-of-Claim and    All_IntermediateReq_v6.0                                              10 

 

Attachment A-2         provide any additional support needed to defend the loan against        bankruptcy discharge.     70. The servicer shall accurately prepare and respond to control        correspondence (correspondence sent to FSA from the White House,        Congress, and other high government officials) and meet control        turnaround times established by the U.S. Department for FSA.       71. The servicer shall respond to written and email questions and requests        timely and accurately.     72. The servicer shall respond and resolve customer complaints; and create        and execute a plan to escalate complaints to FSA and the Ombudsman.     73. The servicer shall have the ability to provide borrower interest rate        discounts and assess late fees if directed to do so by FSA.     74. The servicer shall accurately and timely complete and return Loan        Verification Certificates received from consolidating lenders.     75. The servicer shall assign loans to DMCS for collection once they reach        360 days delinquent.  If a loan is assigned in error the loan will be        reinstated onto the servicer’s system.       76. The servicer shall have the ability to accept and service loans that        undergo rehabilitation from the DMCS.     77. The servicer shall provide FSA the ability to monitor phone calls remotely.     78. The servicer shall support quarterly monitoring reviews completed by FSA.     79. The servicer shall support annual program compliance reviews done by        FSA, or by an agent of FSA.         Loan Conversion     NO Additional Requirements beyond the Initial Requirements      Records Management     80. The Servicer shall comply with all of the following standard items related       to records management:           a.  Citations to pertinent laws, codes and regulations such as 44 U.S.C             chapters 21, 29, 31 and 33; Freedom of Information Act (5 U.S.C.             552); Privacy Act (5 U.S.C. 552a); 36 CFR Part 1222 and Part             1228.           b. Contractor shall treat all deliverables under the contract as the             property of the U.S. Government for which the Government Agency             shall have unlimited rights to use, dispose of, or disclose such data             contained therein as it determines to be in the public interest.     All_IntermediateReq_v6.0                                              11 

 

Attachment A-2            c. Contractor shall not create or maintain any records that are not              specifically tied to or authorized by the contract using Government              IT equipment and/or Government records.             d.  Contractor shall not retain, use, sell, or disseminate copies of any              deliverable that contains information covered by the Privacy Act of              1974 or that which is generally protected by the Freedom of              Information Act.             e. Contractor shall not create or maintain any records containing any              Government Agency records that are not specifically tied to or              authorized by the contract.             f.  The Government Agency owns the rights to all data/records              produced as part of this contract.             g.  The Government Agency owns the rights to all electronic              information (electronic data, electronic information systems,              electronic databases, etc.) and all supporting documentation              created as part of this contract. Contractor must deliver sufficient              technical documentation with all data deliverables to permit the              agency to use the data.             h.  Contractor agrees to comply with Federal and Agency records              management policies, including those policies associated with the              safeguarding of records covered by the Privacy Act of 1974. These              policies include the preservation of all records created or received              regardless of format [paper, electronic, etc.] or mode of              transmission [e-mail, fax, etc.] or state of completion [draft, final,              etc.].             i.  No disposition of documents will be allowed without the prior written              consent of the Contracting Officer. The Agency and its contractors              are responsible for preventing the alienation or unauthorized              destruction of records, including all forms of mutilation. Willful and              unlawful destruction, damage or alienation of Federal records is              subject to the fines and penalties imposed by 18 U.S.C. 2701.              Records may not be removed from the legal custody of the Agency              or destroyed without regard to the provisions of the agency records              schedules.             j.  Contractor is required to obtain the Contracting Officer's approval              prior to engaging in any contractual relationship (sub-contractor) in              support of this contract requiring the disclosure of information,              documentary material and/or records generated under, or relating              to, this contract. The Contractor (and any sub-contractor) is    All_IntermediateReq_v6.0                                              12 

 

Attachment A-2               required to abide by Government and Agency guidance for              protecting sensitive and proprietary information.     All_IntermediateReq_v6.0                                              13 

 

 Attachment A-2    Additional Information regarding records management:   Extract from 36 CFR Part 12, regarding records management   responsibilities of contractors.     §1222.48 Data created or received and maintained for the Government by   contractors.    (a) Contractors performing Congressionally mandated program functions are   likely to create or receive data necessary to provide adequate and proper   documentation of these programs and to manage them effectively. Agencies   shall specify the delivery of the Government of all data needed for the adequate   and proper documentation of contractor-operated programs in accordance with  requirements of the Federal Acquisition Regulation (FAR) and, where applicable,   the Defense Federal Acquisition Regulation Supplement (DFARS).  (b) When contracts involve the creation of data for the Government's use, in  addition to specifying a final product, agency officials may need to specify the  delivery of background data that may have reuse value to the Government.  Before specifying the background data that contractors must deliver to the  agency, program and contracting officials shall consult with agency records and  information managers and historians and, when appropriate, with other  Government agencies to ensure that all agency and Government needs are met,  especially when the data deliverables support a new agency mission or a new  Government program.  (c) Deferred ordering and delivery-of-data clauses and rights-in-data clauses  shall be included in contracts whenever necessary to ensure adequate and  proper documentation or because the data have reuse value to the Government.  (d) When data deliverables include electronic records, the agency shall require  the contractor to deliver sufficient technical documentation to permit the agency  or other Government agencies to use the data.  (e) All data created for Government use and delivered to, or falling under the  legal control of, the Government are Federal records and shall be managed in  accordance with records management legislation as codified at 44 U.S.C.  chapters 21, 29, 31, and 33, the Freedom of Information Act (5 U.S.C. 552), and  the Privacy Act (5 U.S.C. 552a), and shall be scheduled for disposition in  accordance with 36 CFR part 1228.   36 CFR Part 1228, Subpart K - Facility Standards for Records   Storage Facilities.     NARA requires that the requirements of Subpart K be incorporated into the   contract requirements when records storage facilities are included in the contract.    This covers direct contracts with commercial storage vendors such as Iron   Mountain; it also covers contractors who store ED records as part of a larger   service contract. http://www.archives.gov/about/regulations/part-1228/k.html          All_IntermediateReq_v6.0                                              14 

 

Attachment A-3                  Additional       Servicer          FULL        Requirements                       Full_Req_v6.0   Full_Req_v6.0        1 

 

Attachment A-3        Additional Servicer – FULL Requirements                 Required by 8/31/10 unless otherwise noted        TABLE OF CONTENTS    General Statement ........................................................................................... 3  Direct Loans ...................................................................................................... 4        Full_Req_v6.0                                                          2 

 

 Attachment A-3    General Statement           It is the intent of the Department to procure a performance based contract(s)   that promotes competition and provides best of business services.   To achieve  this goal, the Department expects each servicer to provide commercially  available services that will yield high performing portfolios and high levels of   customer satisfaction. The following statements apply:         -    Servicers will be required to meet all statutory and legislative           requirements.     -     Servicers will use their own discretion in deciding to provide services or           business functionality that is recommended but not required.      -     Servicers may leverage all borrower repayment channels while           maintaining existing branding provided all federally held loans are           clearly distinguished and identified.      -     Small differences due to rounding in various calculations are           understood and accepted providing the calculation itself is in           compliance with federal regulation.       -     The department will allocate volume based on defined and understood            performance metrics.        -    The Department does not intend to provide additional service level            requirements.  The Department does, however, expect best of           business practices to be deployed.      -     The Department will not require the use of the Department or FSA logo            on letters, web sites, etc.        -    Servicers will have full discretion to promote or not promote services            as long as they meet legislative and regulatory requirements and are            cost neutral to the government.      -    Servicers will have discretion to provide services to schools.      -    Services may use their own authentication process as long as the            process is fully compliant with federal IT security guidelines.       -     With regard to split borrowers, it is acceptable for servicers to handle            requests, phone calls, etc. for all loans being serviced, regardless of            the holder as long as all federal laws and regulations are met.        Full_Req_v6.0                                                          3 

 

Attachment A-3       Direct Loans       1.  The servicer shall meet all legislative and regulatory requirements for the       Direct Loan program (DL). In some cases Direct Loans will need to be       serviced differently than FFEL loans, a few examples of these differences       are listed below (not an all inclusive list):          a.  The interest rate for a Federal Direct PLUS loan is fixed at 7.9% for             loans first disbursed after July 1, 2006.           b.  Public service loan forgiveness is only offered in the DL.          c.  There are two repayment plans unique to the DL: Income             Contingent Repayment (ICR) and the Alternative Repayment.          d.  DL provides a 0.25% interest rate reduction for borrowers making             payments through electronic debit accounts.           e.  As of July 1, 2009 the up front interest rebate for direct subsidized             and unsubsidized loans will be 1.00%.          f.  There is an origination fee but no Federal default fee in the DL. As              of July 1, 2009, the origination fee will be 1.5% for direct subsidized              and direct unsubsidized loans.           g.  There is authority in the DL for unlimited discretionary              forbearances. DL servicers must be able to offer borrowers              additional administrative forbearance after the 3-year limit and upon              receipt of additional documentation from the borrowers.     2.  The servicer shall meet all previously identified requirements for Federally        Held Debt (i.e. Accounting, Treasury, Reconciliation, Internal Controls,        etc.) for the Direct Loan portfolio.     3.  The servicer shall interface with Common Origination and Disbursement       System (COD) & Electronic Master Promissory Note (eMPN) for newly       originated loans.    4.  The servicer shall interface with the Direct Loan Consolidation System       (DLCS) for Direct Consolidation Loans.    5.  The servicers shall accept loan and disbursement level adjustments from       the originating system(s) and/or directly from schools as necessary.  The       majority of Direct Loan adjustments & cancellations are passed from the       school to COD, and then from COD to the servicing system via the       servicing system/COD interface.  Direct Consolidation Loan adjustments &        cancellations are received by the servicing system from the Direct Loan        Consolidation System (DLCS) via the servicing system/DLCS interface     6.  The servicer shall interface with Internal Revenue Service (IRS) as        needed to support income contingent or income based programs.     7.  The servicer shall support servicing of all Direct Loans, including Direct       Consolidation Loans.                                      Full_Req_v6.0                                                          4 

 

Attachment A-4  Ongoing Allocation Methodology    The allocation of ongoing volume will be determined based on the performance of each servicer in  relation to the other servicers awarded. While the total number of awarded servicers has not yet been  determined, this methodology works with any number of servicers (as shown in examples).    Quarterly scores will be compiled for each servicer based on various performance factors; five high-level  metrics, and some sub-metric categories, have been defined (see below). An average of the quarterly  scores available on July 1 of each year will be used to determine the ranking of each servicer in each of  the five high-level metric categories. By combining each servicer’s ranking in all categories, each servicer  will be given a percentage of the total new volume of Federally Held Debt to be distributed for the  upcoming year.    Servicers will be informed of their allocation percentage of new volume by July 15 of each year. This  allocation will become effective on August 15 of each year. The first ongoing allocation will be provided  by August 15, 2010.    The allocation of ongoing volume will be determined based on the following factors:          1.  Percentage of “In Repayment” Portfolio Dollars that go into default (as transferred to DMCS –        360+ days) – Measured as a percentage of the servicer’s current Federally held portfolio           a.  Percentage at Public Schools           b.  Percentage at Private Schools           c.  Percentage at Proprietary Schools     2.  Percentage of unique “In Repayment” Portfolio borrowers that go into default (as transferred to        DMCS – 360+ days) – Measured as a percentage of the servicer’s current Federally held portfolio           a.  Percentage at Public Schools           b.  Percentage at Private Schools           c.  Percentage at Proprietary Schools     3. Borrower Surveys           a.  In School Borrowers           b.  In Grace Borrowers           c.  In Repayment Borrowers     4. School Surveys           a. Public Schools           b. Private Schools           c. Proprietary Schools     5.  Survey of FSA personnel    Allocation Metric # 1 – to be measured Quarterly (calendar quarters beginning with October 1, 2009).  Calculation = (Total Principal Balance Outstanding (or “PBO”) + Interest of all loans sent to DMCS  during the quarter or > 360 days delinquent at the end of the quarter) DIVIDED BY (Total PBO + Interest  of all of the servicer’s Federally held debt portfolio in repayment status). Resulting value is a percentage  rounded to the nearest hundredth for each category of schools (Public, Private, Proprietary). All available  quarterly scores in each category (1a, 1b, 1c) will be averaged together on July 1 of each year to calculate  the Final Score for this allocation metric.    Allocation Metric # 2 – to be measured Quarterly (calendar quarters beginning with October 1, 2009).  Calculation = (Total number of borrowers sent to DMCS during the quarter or > 360 days delinquent at                                  Page 1 of 3  

 

Attachment A-4  the end of the quarter) DIVIDED BY (Total number of borrowers within the servicer’s Federally held  debt portfolio in repayment status). Resulting value is a percentage rounded to the nearest hundredth for  each category of schools (Public, Private, Proprietary). All available quarterly scores in each category (2a,  2b, 2c) will be averaged together on July 1 of each year to calculate the Final Score for this allocation  metric.    Allocation Metric # 3 – Surveys will be conducted quarterly of borrowers in each category (In School, In  Grace, and In Repayment). The survey will measure borrower satisfaction with the servicer and results  will be based on a scale of 0 – 100%, with 100% representing a perfect score. FSA, or an agent of FSA  will conduct surveys. All available quarterly scores in each category (3a, 3b, 3c) will be averaged together  on July 1 of each year to calculate the Final Score for this allocation metric.    Allocation Metric # 4 – Surveys will be conducted quarterly of schools in each category (Public, Private,  and Proprietary). The survey will measure school satisfaction with the servicer and results will be based  on a scale of 0 – 100%, with 100% representing a perfect score. FSA, or an agent of FSA will conduct  surveys. All available quarterly scores in each category (4a, 4b, 4c) will be averaged together on July 1 of  each year to calculate the Final Score for this allocation metric.    Allocation Metric # 5 – Surveys will be conducted quarterly of FSA personnel. The survey will measure  FSA satisfaction with the servicer and results will be based on a scale of 0 – 100%, with 100%  representing a perfect score. FSA, or an agent of FSA will conduct surveys. All available quarterly scores  will be averaged together on July 1 of each year to calculate the Final Score for this allocation metric.    Allocation Metric Score Comparison Among Servicers  The above calculation will result in a set of 5 scores for each servicer, one score in each metric category  (1-Defaulted borrower dollars, 2-Defaulted borrower count, 3-Borrower Survey, 4-School Survey, 5-FSA  Survey).    FSA will compare all servicers’ scores in each allocation metric category and provide a ranking for each  servicer in that category, with the best score in each category receiving the highest possible value and the  worst score receiving the lowest possible value (highest / lowest values will be determined by the number  of servicers selected --- Highest score possible will be the total number of servicers selected, lowest score  will be 1).    Once a ranking value has been assigned to each servicer in each allocation category, all scores for a  servicer will be added together to provide the “Total Score” for that servicer for the year. Each servicer  will have one Total Score for each year.    Allocation of New Volume of Federally Held Debt  Each servicer will be assigned an allocation of new volume by dividing that servicer’s total score by the  combined total scores of all servicers. The resulting percentage will determine each servicer’s percentage  of new volume of Federally Held Debt.        The servicer’s percentage of new volume will determine the percentage of new borrowers that will be  sent to the servicer for servicing (loans for existing borrowers may, to the maximum extent practicable, be  sent to the servicer already holding that borrower’s other loans).     NOTE: If a servicer is out of compliance (for example, but not limited to, financial management or  reporting, security, OMB Circular A-123, Legislative Mandates, Program Compliance, etc.), that                                  Page 2 of 3  

 

Attachment A-4  servicer’s new volume may be re-allocated to one or more other servicers until compliance has been  achieved. In addition, that servicer’s current account volume may be transferred to another servicer,  at the non-compliant servicer’s expense.                                    Page 3 of 3  

 

           Attachment A-5 SAMPLE - ONGOING ALLOCATION METRIC CALCULATION Scenario 1 - 6 Servicers selected  FINAL SCORE BY ALLOCATION METRIC                                                                                   Servicers                        METRIC                             12                     3            456       1       Defaulted borrower count                   1.10%      2.20%          3.30%      4.40%     5.50%      6.60%       2       Defaulted borrower amount                  1.10%      2.20%          3.30%      4.40%     5.50%      6.60%       3       Borrower Survey                           97.00%     95.00%         93.00%    91.00%     90.00%    89.00%       4       School Survey                             97.00%     95.00%         93.00%    91.00%     90.00%    89.00%       5       FSA Survey                                97.00%     95.00%         93.00%    91.00%     90.00%    89.00%  SERVICER RANKING BY ALLOCATION METRIC                                                                                   Servicers                        METRIC                             12                     3            456       1       Defaulted borrower count                      6.0        5.0            4.0        3.0       2.0        1.0       2       Defaulted borrower amount                     6.0        5.0            4.0        3.0       2.0        1.0       3       Borrower Survey                               6.0        5.0            4.0        3.0       2.0        1.0       4       School Survey                                 6.0        5.0            4.0        3.0       2.0        1.0       5       FSA Survey                                    6.0        5.0            4.0        3.0       2.0        1.0  TOTAL SCORE BY SERVICER                                                           Servicers                                                           12                     3            456                    TOTAL SCORE                             30.0       25.0           20.0      15.0       10.0        5.0  ALLOCATION EACH SERIVER WILL RECEIVE                                                         % of new volume          New                                                        Servicer will receive  borrowers                                                       (Total Score / Combined (based on 6M                              Total Score                      Totals)       total new borr) Servicer 1                     30.0                     28.57%                  1,714,286 Servicer 2                     25.0                     23.81%                  1,428,571 Servicer 3                     20.0                     19.05%                  1,142,857 Servicer 4                     15.0                     14.29%                   857,143 Servicer 5                     10.0                      9.52%                   571,429 Servicer 6                      5.0                      4.76%                   285,714 Combined  Total                           105                    100.00%                  6,000,000 

 

           Attachment A-5 SAMPLE - ONGOING ALLOCATION METRIC CALCULATION Scenario 2 - 5 Servicers selected  FINAL SCORE BY ALLOCATION METRIC                                                                                   Servicers                         METRIC                                12345         1        Defaulted borrower count                      1.10%     2.20%          3.30%      4.40%      5.50%         2        Defaulted borrower amount                     1.10%     2.20%          3.30%      4.40%      5.50%         3        Borrower Survey                              97.00%    95.00%         93.00%     91.00%    90.00%         4        School Survey                                97.00%    95.00%         93.00%     91.00%    90.00%         5        FSA Survey                                   97.00%    95.00%         93.00%     91.00%    90.00%  SERVICER RANKING BY ALLOCATION METRIC                                                                                   Servicers                         METRIC                                12345         1        Defaulted borrower count                         5.0       4.0            3.0        2.0        1.0         2        Defaulted borrower amount                        5.0       4.0            3.0        2.0        1.0         3        Borrower Survey                                  5.0       4.0            3.0        2.0        1.0         4        School Survey                                    5.0       4.0            3.0        2.0        1.0         5        FSA Survey                                       5.0       4.0            3.0        2.0        1.0  TOTAL SCORE BY SERVICER                                                           Servicers                                                               12345                      TOTAL SCORE                                 25.0      20.0           15.0       10.0        5.0  ALLOCATION EACH SERIVER WILL RECEIVE                                                              % of new volume          New                                                            Servicer will receive   borrowers                                                            (Total Score / Combined (based on 6M                                 Total Score                       Totals)        total new borr) Servicer 1                         25.0                       33.33%                 2,000,000 Servicer 2                         20.0                       26.67%                 1,600,000 Servicer 3                         15.0                       20.00%                 1,200,000 Servicer 4                         10.0                       13.33%                   800,000 Servicer 5                          5.0                        6.67%                   400,000 Combined  Totals                              75                     100.00%                 6,000,000 

 

           Attachment A-5 SAMPLE - ONGOING ALLOCATION METRIC CALCULATION Scenario 3 - 4 Servicers selected  FINAL SCORE BY ALLOCATION METRIC                                                                             Servicers                         METRIC                                1234         1        Defaulted borrower count                      1.10%     2.20%          3.30%      4.40%         2        Defaulted borrower amount                     1.10%     2.20%          3.30%      4.40%         3        Borrower Survey                              97.00%    95.00%         93.00%     91.00%         4        School Survey                                97.00%    95.00%         93.00%     91.00%         5        FSA Survey                                   97.00%    95.00%         93.00%     91.00%  SERVICER RANKING BY ALLOCATION METRIC                                                                             Servicers                         METRIC                                1234         1        Defaulted borrower count                         4.0       3.0            2.0        1.0         2        Defaulted borrower amount                        4.0       3.0            2.0        1.0         3        Borrower Survey                                  4.0       3.0            2.0        1.0         4        School Survey                                    4.0       3.0            2.0        1.0         5        FSA Survey                                       4.0       3.0            2.0        1.0  TOTAL SCORE BY SERVICER                                                     Servicers                                                               1234                      TOTAL SCORE                                 20.0      15.0           10.0        5.0  ALLOCATION EACH SERIVER WILL RECEIVE                                                              % of new volume          New                                                            Servicer will receive   borrowers                                                            (Total Score / Combined (based on 6M                                 Total Score                       Totals)        total new borr) Servicer 1                         20.0                       40.00%                 2,400,000 Servicer 2                         15.0                       30.00%                 1,800,000 Servicer 3                         10.0                       20.00%                 1,200,000 Servicer 4                          5.0                       10.00%                   600,000 Combined  Totals                              50                     100.00%                 6,000,000 

 

           Attachment A-5 SAMPLE - ONGOING ALLOCATION METRIC CALCULATION Scenario 4 - 3 Servicers selected  FINAL SCORE BY ALLOCATION METRIC                                                                        Servicers                         METRIC                                12                       3         1        Defaulted borrower count                      1.10%     2.20%          3.30%         2        Defaulted borrower amount                     1.10%     2.20%          3.30%         3        Borrower Survey                              97.00%    95.00%         93.00%         4        School Survey                                97.00%    95.00%         93.00%         5        FSA Survey                                   97.00%    95.00%         93.00%  SERVICER RANKING BY ALLOCATION METRIC                                                                        Servicers                         METRIC                                12                       3         1        Defaulted borrower count                         3.0       2.0            1.0         2        Defaulted borrower amount                        3.0       2.0            1.0         3        Borrower Survey                                  3.0       2.0            1.0         4        School Survey                                    3.0       2.0            1.0         5        FSA Survey                                       3.0       2.0            1.0  TOTAL SCORE BY SERVICER                                                Servicers                                                               12                       3                      TOTAL SCORE                                 15.0      10.0            5.0  ALLOCATION EACH SERIVER WILL RECEIVE                                                              % of new volume          New                                                            Servicer will receive   borrowers                                                            (Total Score / Combined (based on 6M                                 Total Score                       Totals)        total new borr) Servicer 1                         15.0                       50.00%                 3,000,000 Servicer 2                         10.0                       33.33%                 2,000,000 Servicer 3                          5.0                       16.67%                 1,000,000 Combined  Totals                              30                     100.00%                 6,000,000 

 

           Attachment A-5 SAMPLE - ONGOING ALLOCATION METRIC CALCULATION Scenario 5 - 2 Servicers selected  FINAL SCORE BY ALLOCATION METRIC                                                                 Servicers                         METRIC                                12         1        Defaulted borrower count                      1.10%     2.20%         2        Defaulted borrower amount                     1.10%     2.20%         3        Borrower Survey                              97.00%    95.00%         4        School Survey                                97.00%    95.00%         5        FSA Survey                                   97.00%    95.00%  SERVICER RANKING BY ALLOCATION METRIC                                                                 Servicers                         METRIC                                12         1        Defaulted borrower count                         2.0       1.0         2        Defaulted borrower amount                        2.0       1.0         3        Borrower Survey                                  2.0       1.0         4        School Survey                                    2.0       1.0         5        FSA Survey                                       2.0       1.0  TOTAL SCORE BY SERVICER                                         Servicers                                                               12                      TOTAL SCORE                                 10.0       5.0  ALLOCATION EACH SERIVER WILL RECEIVE                                                              % of new volume                                                            Servicer will receive   New borrowers                                                            (Total Score / Combined (based on 6M total                                 Total Score                       Totals)            new borr) Servicer 1                         10.0                       66.67%                     4,000,000 Servicer 2                          5.0                       33.33%                     2,000,000 Combined  Totals                              15                     100.00%                     6,000,000 

 

           Attachment A-5 SAMPLE - ONGOING ALLOCATION METRIC CALCULATION Scenario 6 - 6 Servicers selected  FINAL SCORE BY ALLOCATION METRIC                                                                                   Servicers                        METRIC                             12                     3            456       1       Defaulted borrower count                   1.10%      2.20%          3.30%      4.40%     5.50%      6.60%       2       Defaulted borrower amount                  6.60%      5.50%          3.30%      4.40%     2.20%      1.10%       3       Borrower Survey                           97.00%     95.00%         93.00%    91.00%     90.00%    89.00%       4       School Survey                             89.00%     90.00%         93.00%    91.00%     95.00%    97.00%       5       FSA Survey                                97.00%     95.00%         93.00%    91.00%     90.00%    89.00%  SERVICER RANKING BY ALLOCATION METRIC                                                                                   Servicers                        METRIC                             12                     3            456       1       Defaulted borrower count                      6.0        5.0            4.0        3.0       2.0        1.0       2       Defaulted borrower amount                     1.0        2.0            4.0        3.0       5.0        6.0       3       Borrower Survey                               6.0        5.0            4.0        3.0       2.0        1.0       4       School Survey                                 1.0        2.0            4.0        3.0       5.0        6.0       5       FSA Survey                                    6.0        5.0            4.0        3.0       2.0        1.0  TOTAL SCORE BY SERVICER                                                           Servicers                                                           12                     3            456                    TOTAL SCORE                             20.0       19.0           20.0      15.0       16.0      15.0  ALLOCATION EACH SERIVER WILL RECEIVE                                                         % of new volume          New                                                        Servicer will receive  borrowers                                                       (Total Score / Combined (based on 6M                              Total Score                      Totals)       total new borr) Servicer 1                     20.0                     19.05%                  1,142,857 Servicer 2                     19.0                     18.10%                  1,085,714 Servicer 3                     20.0                     19.05%                  1,142,857 Servicer 4                     15.0                     14.29%                   857,143 Servicer 5                     16.0                     15.24%                   914,286 Servicer 6                     15.0                     14.29%                   857,143 Combined  Total                           105                    100.00%                  6,000,000 

 

           Attachment A-5 SAMPLE - ONGOING ALLOCATION METRIC CALCULATION Scenario 7 - 5 Servicers selected  FINAL SCORE BY ALLOCATION METRIC                                                                              Servicers                        METRIC                             12345       1       Defaulted borrower count                   1.10%      2.20%          3.30%      4.40%     5.50%       2       Defaulted borrower amount                  6.60%      5.50%          3.30%      4.40%     2.20%       3       Borrower Survey                           97.00%     95.00%         93.00%    91.00%     90.00%       4       School Survey                             89.00%     90.00%         93.00%    91.00%     95.00%       5       FSA Survey                                97.00%     95.00%         93.00%    91.00%     90.00%  SERVICER RANKING BY ALLOCATION METRIC                                                                              Servicers                        METRIC                             12345       1       Defaulted borrower count                      5.0        4.0            3.0        2.0       1.0       2       Defaulted borrower amount                     1.0        2.0            4.0        3.0       5.0       3       Borrower Survey                               5.0        4.0            3.0        2.0       1.0       4       School Survey                                 1.0        2.0            4.0        3.0       5.0       5       FSA Survey                                    5.0        4.0            3.0        2.0       1.0  TOTAL SCORE BY SERVICER                                                      Servicers                                                           12345                    TOTAL SCORE                             17.0       16.0           17.0      12.0       13.0  ALLOCATION EACH SERIVER WILL RECEIVE                                                         % of new volume          New                                                        Servicer will receive  borrowers                                                       (Total Score / Combined (based on 6M                              Total Score                      Totals)       total new borr) Servicer 1                     17.0                     22.67%                  1,360,000 Servicer 2                     16.0                     21.33%                  1,280,000 Servicer 3                     17.0                     22.67%                  1,360,000 Servicer 4                     12.0                     16.00%                   960,000 Servicer 5                     13.0                     17.33%                  1,040,000 Combined  Total                           75                     100.00%                  6,000,000 

 

           Attachment A-5 SAMPLE - ONGOING ALLOCATION METRIC CALCULATION Scenario 8 - 4 Servicers selected  FINAL SCORE BY ALLOCATION METRIC                                                                            Servicers                         METRIC                               1234        1         Defaulted borrower count                   1.10%      2.20%          3.30%      4.40%        2         Defaulted borrower amount                  6.60%      5.50%          3.30%      4.40%        3         Borrower Survey                           97.00%     95.00%         93.00%    91.00%        4         School Survey                             89.00%     90.00%         93.00%    91.00%        5         FSA Survey                                97.00%     95.00%         93.00%    91.00%  SERVICER RANKING BY ALLOCATION METRIC                                                                            Servicers                         METRIC                               1234        1         Defaulted borrower count                      4.0        3.0            2.0        1.0        2         Defaulted borrower amount                     1.0        2.0            4.0        3.0        3         Borrower Survey                               4.0        3.0            2.0        1.0        4         School Survey                                 1.0        2.0            4.0        3.0        5         FSA Survey                                    4.0        3.0            2.0        1.0  TOTAL SCORE BY SERVICER                                                    Servicers                                                              1234                      TOTAL SCORE                              14.0       13.0           14.0        9.0  ALLOCATION EACH SERIVER WILL RECEIVE                                                            % of new volume          New                                                           Servicer will receive  borrowers                                                          (Total Score / Combined (based on 6M                                 Total Score                      Totals)       total new borr) Servicer 1                        14.0                     28.00%                  1,680,000 Servicer 2                        13.0                     26.00%                  1,560,000 Servicer 3                        14.0                     28.00%                  1,680,000 Servicer 4                         9.0                     18.00%                  1,080,000  Combined Total                     50                     100.00%                  6,000,000 

 

           Attachment A-5 SAMPLE - ONGOING ALLOCATION METRIC CALCULATION Scenario 9 - 3 Servicers selected  FINAL SCORE BY ALLOCATION METRIC                                                                       Servicers                         METRIC                               12                     3        1         Defaulted borrower count                   1.10%      2.20%          3.30%        2         Defaulted borrower amount                  6.60%      5.50%          3.30%        3         Borrower Survey                           97.00%     95.00%         93.00%        4         School Survey                             89.00%     90.00%         93.00%        5         FSA Survey                                97.00%     95.00%         93.00%  SERVICER RANKING BY ALLOCATION METRIC                                                                       Servicers                         METRIC                               12                     3        1         Defaulted borrower count                      3.0        2.0            1.0        2         Defaulted borrower amount                     1.0        2.0            3.0        3         Borrower Survey                               3.0        2.0            1.0        4         School Survey                                 1.0        2.0            3.0        5         FSA Survey                                    3.0        2.0            1.0  TOTAL SCORE BY SERVICER                                               Servicers                                                              12                     3                      TOTAL SCORE                              11.0       10.0            9.0  ALLOCATION EACH SERIVER WILL RECEIVE                                                            % of new volume          New                                                           Servicer will receive  borrowers                                                          (Total Score / Combined (based on 6M                                 Total Score                      Totals)       total new borr) Servicer 1                        11.0                     36.67%                  2,200,000 Servicer 2                        10.0                     33.33%                  2,000,000 Servicer 3                         9.0                     30.00%                  1,800,000  Combined Total                     30                     100.00%                  6,000,000 

 

           Attachment A-5 SAMPLE - ONGOING ALLOCATION METRIC CALCULATION Scenario 10 - 2 Servicers selected  FINAL SCORE BY ALLOCATION METRIC                                                               Servicers                         METRIC                               12        1         Defaulted borrower count                   1.10%      2.20%        2         Defaulted borrower amount                  6.60%      5.50%        3         Borrower Survey                           97.00%     95.00%        4         School Survey                             89.00%     90.00%        5         FSA Survey                                97.00%     95.00%  SERVICER RANKING BY ALLOCATION METRIC                                                               Servicers                         METRIC                               12        1         Defaulted borrower count                      2.0        1.0        2         Defaulted borrower amount                     1.0        2.0        3         Borrower Survey                               2.0        1.0        4         School Survey                                 1.0        2.0        5         FSA Survey                                    2.0        1.0  TOTAL SCORE BY SERVICER                                       Servicers                                                              12                      TOTAL SCORE                               8.0        7.0  ALLOCATION EACH SERIVER WILL RECEIVE                                                            % of new volume          New                                                           Servicer will receive  borrowers                                                          (Total Score / Combined (based on 6M                                 Total Score                      Totals)       total new borr) Servicer 1                         8.0                     53.33%                  3,200,000 Servicer 2                         7.0                     46.67%                  2,800,000  Combined Total                     15                     100.00%                  6,000,000 

 

Federal Student Aid                              Attachment A-6-- Servicing Pricing Definitions  U.S. Department of Education                      Title IV Student Loan Servicing/Management             Deliverable                             Definition    Borrowers in In-school Status   Number of unique borrowers (SSNs) with balance not                                    equal to $0.00 who have not separated from school                                    as of the last day of the billing period    Borrowers in Grace or Current   Number of unique borrowers (SSNs) with balance not    Repayment Status                equal to $0.00 who have separated from school and                                    are less than 31 days delinquent and are not in                                    deferment, forbearance, or conditionally discharged                                    as of the last day of the billing period    Borrowers in Deferment or       Number of unique borrowers (SSNs) with balance not    Forbearance                     equal to $0.00 who have separated from school, are                                    in deferment or forbearance and who are not                                    conditionally discharged as of the last day of the                                    billing period    Borrowers 31-90 Days            Number of unique borrowers (SSNs) with balance not    Delinquent                      equal to $0.00 who have separated from school, are                                    31 or more days, but less than 91 days delinquent,                                    and who are not conditionally discharged as of the                                    last day of the billing period    Borrowers 91-150 Days           Number of unique borrowers (SSNs) with balance not    Delinquent                      equal to $0.00 who have separated from school, are                                    91 or more days, but less than 151 days delinquent,                                    and who are not conditionally discharged as of the                                    last day of the billing period    Borrowers 151-270 Days          Number of unique borrowers (SSNs) with balance not    Delinquent                      equal to $0.00 who have separated from school are                                    151 or more days, but less than 271 days delinquent,                                    and who are not conditionally discharged as of the                                    last day of the billing period    Borrowers 270+ Days             Number of unique borrowers (SSNs) with balance not    Delinquent                      equal to $0.00 who have separated from school and                                    271 or more days and who are not conditionally                                    discharged as of the last day of the billing period.                                     This may include borrowers over 360 day that are                                    considered in Default Status, but for some reason                                    have not been transferred through no fault of the                                    Servicer.      NOTES:     1.  Common pricing shall apply regardless of program (i.e. Direct Loan, Federal Family         Education Loan) or volume serviced, unless otherwise noted in the contract.     2.  Reporting is required for the number of borrowers and/or loans and dollar amount of each         program, in addition to any other reporting requirements provided in the contract.     3.  Borrowers in multiple statuses shall be billed once, in the lowest performing deliverable         status.  The lowest performing deliverable status is defined as the lowest unit priced         deliverable.     4.  Borrowers pending discharge, which include, but are not limited to: conditional disability,         death, or bankruptcy, shall be, for billing purposes, counted in the deliverable status at         the time of the discharge request.      5.  “The last day of the billing period" is defined as the last day of the Department of         Education’s monthly billing period.     6.  The annual pricing period shall begin on September 1, 2009.   Version 9.0                                                             Page 1 of 1edfsa09d0012mod0081execu

 

 

 

 

 

 

   AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT                                                        1. Contract ID Code                   Page of Pages                                                                                                                                                        1       21   2. AMENDMENT MODIFICATION NO.                       3. EFFECTIVE DATE           4. REQUISITION/PURCHASE REQ. NO.             5. PROJECT NO. (if applicable)                         0080                                SEP 01, 2014   6. ISSUED BY                                               CODE FSA-FS2         7. ADMINISTERED BY (If other than item 6)        CODE   United States Department of Education   Federal Student Aid/Mission Support Group                                        See Block 6  830 First St NE - Suite 91F3   Washington DC 20202   Katharine Hill 202-377-4215 katharine.hill@ed.gov    8. NAME AND ADDRESS OF CONTRACTOR (NO., Street, Country, State and ZIP Code)                          (x)    9A. AMENDMENT OF SOLICITATION NO.   GREAT    LAKES EDUCATIONAL LOAN SERVICES, INC.                     DUNS: 967379496   2401 INTERNATIONAL LN.                                             Cage Code: 5J3D5                      MADISON WI 537043121                                                                                                                 9B. DATED (SEE ITEM 11)                                                                                                                  10A. MODIFICATION OF CONTRACT/ORDER NO.                                                                                                                                    ED-FSA-09-D-0012                                                                                                                 10B. DATED (SEE ITEM 13)    CODE 00030773                                       FACILITY CODE                                                     JUN 17, 2009                                               11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS     ... The above numbered solicitation is amended as set forth in item 14. The hour and date specified for receipt of offers ... is extended,  ...is not extended.    Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:    (a) By completing items 8 and 15, and returning ______ copies of amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted;    or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE    RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OR OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF    YOUR OFFER. If by virtue of this amendment your desire to change an offer already submitted, such change may be made by telegram or letter, provided each   telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.     12. ACCOUNTING AND APPROPRIATION DATA (If required)                                                                                 Modification Amount: $0.00   See Schedule                                                                                                              Modification Obligated Amount: $0.00      13. THIS ITEM ONLY APPLIES TO MODIFICATION OF CONTRACTS/ORDERS. IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.    Check One      A.  THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE                         CONTRACT ORDER NO. IN ITEM 10A.                                         B.   THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying                 office, appropriation date, etc) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b).                     C.   THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:                   Mutual   Agreement Between the Parties                    D.   OTHER (Specify type of modification and authority)                         E.  IMPORTANT:   Contractor ...  is not,   ... is required to sign this document and return _______1             copies to the issuing office.    14.  DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible)     Please   see the attachment for modification description.                               Except as provided herein, all terms and conditions of the document referenced in item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.    15A. NAME AND TITLE OF SIGNER (Type or print)                                     16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)                                                                                     Soo Kang                                                                                      202-377-3798    soo.kang@ed.gov   15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED                                           16B. UNITED STATES OF AMERICA                  16C. DATE SIGNED                                                                                                                                                                                                                               AUG 27, 2014                                                                                                                                                                                  (Signature of person authorized to sign)                                            (Signature of Contracting Officer)  NSN 7540-01-152-8070                                                                                    STANDARD FORM 30. (Rev. 10-83)  Previous Edition unusable                                                                              Prescribed by GSA FAR (48 CFR) 53.243 

 

                                      Attachment Page   The purpose of this modification is to:      1. Replace Section B.13.H: Delinquency Reduction Compensation Program     2. Modify Section B.13.N: Additional Terms        -  Replace Item 3: Common Pricing, previously revised in Modification 0074       -  Modify Item 5: Common Pricing       -  Add Item 11       -  Add Item 12: Service Member Requirements       -  Add Item 13: Servicing Requirements Submission     3. Update C.2 Attachments/Supplemental Documents     4. Replace Attachment A-4, Servicer Allocation Metrics     5. Replace Attachment A-5, Allocation Calculation Example     6. Replace Attachment A-6, Servicing Pricing Definitions     7. Add Attachment A-7, Borrower Status Reporting     8. Add Attachment A-8, Quarterly Delinquency Reduction Compensation Report  All other terms and conditions remain unchanged.                                   PAGE 2 OF 21  ED-FSA-09-D-0012/0080 

 

                                      Attachment Page                    B.13  ADDITIONAL TERMS AND CONDITIONS   H.  Delinquency Reduction Compensation Program  A Delinquency Reduction Compensation Program is established as follows:                                       (Borrowers > 30 Days Delinquent)       _ Delinquency Percentage =  (Borrowers In Current Status + Borrowers < 361 Days Delinquent)  Each of the Servicers may earn up to $500,000 per quarter, depending upon performance, as  follows:  Level 1 Award is valued at $200,000 if the Servicer achieves a Delinquency Percentage for  Quarter End of less than 23.0%.  Level 2 Award is valued at $300,000 if the Servicer achieves a Delinquency Percentage for  Quarter End of less than 23.0% (earns $200,000) AND Servicer improves upon prior Quarter End Delinquency Percentage (earns $100,000).   Level 3 Award is valued at $500,000 if the Servicer achieves a Delinquency Percentage for  Quarter End of less than 21.0% AND Servicer improves upon prior Quarter End Delinquency  Percentage.   Delinquency Reduction Compensation will be available based on the results of the quarter  ending 12/31/2014. Servicers shall submit the Quarterly Delinquency Reduction Compensation  Report (Attachment A-8) at the end of each quarter. Quarters are defined as Q1 = Oct 1 to Dec  31; Q2 = Jan 1 to Mar 31; Q3 = Apr 1 to Jun 30, and Q4 = Jul 1 to Sep 30 of each year.  This contract includes performance compensation terms that address delinquency reduction.  The  compensation will become due to the vendor upon successful achievement of delinquency  reduction objectives.  The Government intends to promote the reduction of loan delinquency  across the entire period of vendor performance.  Any vendor that appears to be performing in a  manner inconsistent with this intent (e.g. attempting to earn compensation every other quarter, etc.) may, at the sole discretion of the Government, forfeit the delinquency reduction compensation they would have otherwise earned; and may, at the sole discretion of the  Government, be required to return previously earned compensation that was achieved through  this delinquency reduction program.    The Government may, at its sole discretion, reset the structure of the compensation on an annual  basis, effective on September 1 of the performance year; maintain the current structure; or,  remove the delinquency reduction compensation entirely by unilateral modification of the  contract.                                    PAGE 3 OF 21  ED-FSA-09-D-0012/0080 

 

                                         Attachment Page      N. Additional Terms:          3.   The Government will set and manage the common pricing, including tier             structure, below:   CLIN                   Status                     Unit     Unit Measure    Unit Rate 0001    In School                              1+               EA           $ 1.05 0002    In Grace                               1+               EA           $ 1.68 0003    In Repayment                           1+               EA           $ 2.85 0004    Service Member                         1+               EA           $ 2.85 0005    Deferment                              1+               EA           $ 1.68 0006    Forbearance                            1+               EA           $ 1.05 0007    Delinquent 6-30 Days                   1+               EA           $ 2.11 0008    Delinquent 31-90 Days                  1+               EA           $ 1.46 0009    Delinquent 91-150 Days                 1+               EA           $ 1.35 0010    Delinquent 151-270 Days                1+               EA           $ 1.23 0011    Delinquent 271-360 Days                1+               EA           $ 0.45 0012    Delinquent 361 or more Days            1+               EA            $0.45 0013    Delinquency Reduction Compensation Program1 N/A         N/A       Not-to-Exceed                                                                             $2,000,000         Cohort Default Rate (CDR) Challenge Support 0014          Institution2                     1+               EA           $213.00 0015          Borrower3                        1+               EA           $23.00         Loan Consolidation 0016          One-Time Development Cost4       N/A              N/A       Not-to-Exceed                                                                            $1,200,000.00 0017          Consolidations Completed         1+               EA           $27.35 0018    CDR Assistance Pilot (rate per school assisted)5 1+     EA         $18,000.00         Image Repository (Storage & Access)6 0019          Tier 1 (Images)                  0 –              EA          $0.00088                                                50,000,000 0020          Tier 2 (Images)                  50,000,001 –     EA          $0.00077                                                100,000,000 0021          Tier 3 (Images)                  100,000,001 –    EA          $0.00070                                                150,000,000 0022          Tier 4 (Images)                  150,000,001+     EA          $0.00065        1. Delinquency Reduction Compensation Program shall not exceed $2,000,000 annually per servicer. The           maximum amount available each quarter shall not exceed $500,000 per servicer.       2. An institution is defined as a school or branch having a unique school code/ID as established by the U.S.           Department of Education.       3. A borrower is defined as an individual with a unique SSN.       4. Development costs for Loan Consolidation will be reimbursed for the actual costs incurred, but not-to-          exceed $1,200,000, for the first year only.       5. The CDR Assistance Pilot ends on May 16, 2014       6. The tier structure for Image Repository is based on total volume at the associated unit rate, on a monthly           basis.  For example, if there are 100,000,000 images in Month 1, the total monthly cost will be 100,000,000                                      PAGE 4 OF 21  ED-FSA-09-D-0012/0080 

 

                                      Attachment Page         X $0.00077 (Tier 2 Unit Rate); if in Month 2 there are 120,000,000 images, the total monthly cost will be        120,000,000 X $0.00070 (Tier 3 Unit Rate); and so on.          5.   Common pricing includes all supplies, services and other costs to deliver Title IV         Servicing under this contract, including:       x  Costs for bringing contractor systems into compliance for handling federally           held debt.       x  Costs for legislative, regulatory or policy changes that affect the FFEL community           as a whole, as is commercially accepted practice in the FFEL community.       x  Costs to successfully shutdown the federal servicing system and operations,           including:              a. Continued borrower support for a minimum of 90 days from the last                  transfer off. Including, but not limited to, responses to inquiries, credit                  bureau resolutions, payment and correspondence forwarding, tax reporting,                  etc.              b. Creation and execution of a decommissioning plan for systems and                  operational activities.              c. Continued system support (including interfaces and reject resolution) until                  system successfully decommissioned – minimum of 90 days from last transfer                  off.              d. Continued reporting and reconciliations until system successfully                  decommissioned – including full resolution of all variances, suspense balances                  and fund balance with Treasury.       x  For all other costs, the Department and the contractor(s) may come to an           agreement via the change management process or negotiation, as necessary.  11. The contractor shall provide a complete copy of any complaint served on the contractor in a     lawsuit by an individual for conduct alleged to have occurred in the course of servicing     activity under the contract. Within 10 days of the date of service of the complaint on the     contractor, the contractor shall deliver the copy by email attachment sent to     OGC.Servicer@ed.gov, or by hard copy addressed, postage prepaid, to Education     Department, Office of General Counsel, DPE: Servicer, 400 Maryland Ave. SW, Washington     DC 20202. The contractor need not provide such a complaint if the contractor determines     that the conduct alleged did not occur in the course of the contractor’s servicing activities     under the contract or the plaintiff does not assert a claim with respect to an obligation owed     or believed to be owed by the plaintiff to repay a student loan. The contractor shall provide     the complaint at no additional cost to the government.   12. Service Member Requirements    12.1 Service Member is defined in accordance with the Servicemember Civil Relief Act.    12.2 The servicer shall provide a unique email address and phone number (or an IVR option         within existing phone number) that allows the borrowers in the service member category         to go directly to a group of agents who have been specially trained to respond to         inquiries on all aspects of the military entitlements, forms, regulations, and military         payments, as they relate to federal financial aid.  The email and phone options shall be                                   PAGE 5 OF 21  ED-FSA-09-D-0012/0080 

 

                                   Attachment Page       made available to these borrowers on servicer websites and hard copy/electronic      correspondences.    12.2.1 Validation - Servicer shall provide a document to FSA explaining how the service            member borrowers can uniquely contact the servicer and where/when that            information is made available to the borrower.  Servicer shall provide a high level            overview of the specialized training the CSRs/agents will go through to be trained            to respond to these inquiries and when that training takes place.  The training            materials should also be made available to FSA on demand. (Send validation            items to EdServicerG@ed.gov and COR within 60 days of the Effective Date of            this executed modification (0080).)  12.3 The servicer shall review all borrowers in their portfolio against the Department of      Defense database MONTHLY and apply the borrower entitlements based on that      matching.    12.3.1 Validation - Servicer shall provide a document outlining the timing of when the            monthly matching will occur as well as how/when the benefits will be applied to            borrower accounts as a result of the matching. (Send validation items to           EDServicerG@ed.gov and COR within 60 days of the Effective Date of this           executed modification (0080).)  12.4 The servicer shall provide a listing (SSN, Name, days delinquent) by the 10th calendar      day of each month to FSA that identifies EVERY borrower in the service member      category that has reached 300 or more days delinquent.  The listing shall also outline all      activity (calls/emails/correspondence) the servicer has taken to try to resolve the      delinquency and how the servicer has contacted the borrower (or if they have been      unable to, how they have tried to contact the borrower).  FSA will review the listing and      may request administrative forbearances on some/all of these borrowers to reduce the      delinquency level (which would prevent the borrower from going to Debt Collection).       FSA will respond in writing/email to each listing provided by the 25th calendar day of     each month to identify any borrower that the servicer should apply a forbearance on. If      no response is received from FSA, then no action is needed. All files should be      submitted within encrypted zip files with password provided in separate emails.    12.4.1 Validation - No pre-implementation validation is needed, FSA will review the            listing once implemented to ensure the required data is provided.                               PAGE 6 OF 21  ED-FSA-09-D-0012/0080 

 

                                      Attachment Page      12.5 The servicer shall provide a monthly report to FSA identifying all borrowers within the         Service Member Category by the 10th calendar day of each month.  The report shall be         provided via email, in Excel format, and follow the below data elements/format.  The         report shall be provided to EDServicerG@ed.gov and other email addresses as         periodically added by FSA. All files should be submitted within encrypted zip files with         password provided in separate emails.               Borrower     Borrower     Benefit borrower Eligibility Eligibility                  SSN         Name       qualifies for to meet start date end date                                         Service Member                                             category         12.5.1 Validation - No pre-implementation validation is needed, FSA will review the               report once implemented to ensure the required data is provided.  13. Servicing Requirements Submission    The servicer shall submit a complete list of servicing requirements as they exist at the time of     submission to the Government every two years. This shall include all requirements, including     those unique to the servicer (including but not limited to: PSLF, TEACH, TPD, Image     Repository). No proprietary information shall be contained in the requirements. The first     requirements submission shall be submitted by November 1, 2014.      C.2    Attachments/Supplemental Documents          Number                               Title            A-1     Additional Servicer—Initial Requirements Document (Version 21.0)            A-2     Additional Servicer—Intermediate Requirements Document (Version                    6.0)            A-3     Additional Servicer—Full Requirements Document (Version 6.0)            A-4     Ongoing Allocation Methodology (Version 2.0)            A-5     Sample—Ongoing Allocation Metric Calculation (Version 2.0)            A-6     Servicing Pricing Definitions (Version 10.0)            A-7     Borrower Status Reporting (Retention)            A-8     Quarterly Delinquency Reduction Compensation Report            A-9     Monthly Invoice Report                                  PAGE 7 OF 21  ED-FSA-09-D-0012/0080 

 

                                      Attachment Page                                    Attachment A-4  Servicer Allocation Metrics  The allocation of ongoing volume will be determined twice each year based on the performance  of each servicer in relation to the other servicers awarded. Quarterly results will be compiled for  each servicer based on the performance measures listed below. During July (using March and  June quarter end results) and January (using September and December quarter end results) of  each year an average of the quarterly performance results will be used to determine the ranking  of each servicer in each of the five high-level metric categories. By combining each servicer’s  ranking in all categories, each servicer may be given a percentage of the designated new  borrower pool available to be distributed for the upcoming two quarters. Note: A servicer may be  given 0% (zero percent) of the designated new borrower pool, at the Government’s sole  discretion.  Servicers will be informed of their allocation percentage of new volume by August 15, for the  allocation effective September 1 to February month end, and February 15, for the allocation  effective March 1 to August 31, of each year.  The allocation of ongoing volume will be determined based on the following factors:  For metrics 1, 2, and 3 borrowers in school, in grace, in deferment, in forbearance, in Service  Member, and over 360 days delinquent are excluded from both the numerator and denominator  in the calculations. Calculations will be rounded to the hundredth of a percent. Borrowers with  loans in multiple statuses shall be counted once, in the lowest performing deliverable status. The  lowest performing deliverable status is defined as the lowest unit priced deliverable. Note:  Metrics will NOT be calculated separately by school type in any metric.   Allocation Metrics 1 – Percentage of Borrowers in Current Repayment Status – 30% of the overall     performance metric – This calculation is measured by dividing the number of borrowers in     current repayment status who are not delinquent at the end of the quarter by the number of all     borrowers in both current and delinquent repayment status at the end of the quarter.  2 – Percentage of Borrowers more than 90 but less than 271 days delinquent – 15% of the     overall performance metric – This calculation is measured by dividing the number of     borrowers who are greater than 90 days delinquent and less than 271 days delinquent at the     end of the quarter by the number of borrowers in both current and delinquent repayment     status at the end of the quarter.   3 – Percentage of Defaulted borrowers (over 270 days and less than 361 days delinquent) –    15% of the overall performance metric – This calculation is measured by dividing the     number of borrowers who are greater than 270 days delinquent and less than 361 days     delinquent at the end of the quarter by the number of borrowers in both current and     delinquent repayment status at the end of the quarter.                                   PAGE 8 OF 21  ED-FSA-09-D-0012/0080 

 

                                      Attachment Page   4 – Borrower Survey results – 35% of the overall performance metric – Surveys will be     conducted quarterly of borrowers in each category (In School, In Grace, and In Repayment).     The survey will measure borrower satisfaction with the servicer and results will be based on     a scale of 0 – 100, with 100 representing a perfect score. FSA or an agent of FSA will     conduct surveys. All quarterly scores in each category (In School, In Grace, and In     Repayment) will be averaged together to provide the quarterly borrower survey result.  5 – FSA Employee Survey results – 5% of the overall performance metric – Surveys will be     conducted quarterly of FSA employees. The survey will measure satisfaction with the     servicer and results will be based on a scale of 0 – 100, with 100 representing a perfect score.     FSA, or an agent of FSA, will conduct surveys.   Performance Periods Quarterly scores will be compiled for each servicer, quarters are defined as Q1 = Oct 1 to Dec  31; Q2 = Jan 1 to Mar 31; Q3 = Apr 1 to Jun 30, and Q4 = Jul 1 to Sep 30 of each year.  All available quarterly scores in each metric will be averaged together during July and January of  each year to calculate the final result for each metric.  Allocation Metric Score Comparison Among Servicers The above calculation will result in a set of 5 scores for each servicer, one score in each metric  category (1-Percentage of borrowers in current repayment, 2-Percentage of Borrowers more than  90 but less than 271 days delinquent, 3-Percentage of Defaulted borrowers, 4-Borrower Survey,  and 5-FSA Employee Survey).  FSA will compare all servicers’ scores (per servicer pool - TIVAS and NFPs) in each allocation  metric category and provide a ranking for each servicer in that category, with the best score in  each category receiving the highest possible value and the worst score receiving the lowest  possible value (highest / lowest values will be determined by the number of servicers included in  the allocation pool --- Highest score possible will be the total number of servicers selected,  lowest score will be 1).  Once a ranking value has been assigned to each servicer in each allocation category, each score  will be adjusted based on the ‘weight’ the metric will hold. All scores for a servicer will then be  added together to provide the “Total Score” for that servicer for the 6-month period. Each  servicer will have one Total Score for each 6-month period.  Allocation of New Volume of Federally Held Debt Each servicer may be assigned an allocation of new volume by dividing that servicer’s total  score by the combined total scores of all servicers. The resulting percentage will determine each  servicer’s percentage of new volume of Federally Held Debt.  The servicer’s percentage of new volume will determine the percentage of new borrowers that  may be sent to the servicer for servicing (loans for existing borrowers may, to the maximum  extent practicable, be sent to the servicer already holding that borrower’s other loans).                                  PAGE 9 OF 21  ED-FSA-09-D-0012/0080 

 

                                      Attachment Page   Record Retention Each servicer shall maintain a listing of all borrowers within their federal portfolio identifying  which borrowers exist in each status at the time of invoicing and/or metric submissions to FSA.   This information shall be provided to FSA on demand and shall be maintained throughout the  performance period and provided to FSA at the end of the contract period. (See Attachment A-7, Borrower Status Reporting)  NOTE: If a servicer is out of compliance (for example, but not limited to, financial management  or reporting, security, OMB Circular A-123, Legislative Mandates, Program Compliance, etc.),  that servicer’s new volume may be re-allocated to one or more other servicers. In addition, that  servicer’s current account volume may be transferred to another servicer, at the non-compliant  servicer’s expense.                                 PAGE 10 OF 21  ED-FSA-09-D-0012/0080 

 

                                                    Attachment Page                                                 Attachment A-5  ONGOING ALLOCATION METRIC CALCULATION -               Assumes 4 servicers FINAL SCORE BY ALLOCATION METRIC (based on combined quarterly average score)                                                                       Servicers                      METRIC                          Svcr 1      Svcr 2       Svcr 3      Svcr 4        1        % of borrowers in current repayment  88.50%      81.75%      83.14%       91.10%        2        % of borrowers 91-270 delinquent     6.10%       5.00%        4.15%5%     3.76%        3        % of borrowers 271-360 delinquent    1.20%       0.78%1.      1.35%35%    1.51%        4        Borrower Survey                       75.78      74.7874      74.67.67     70.15        5        FSA Survey                            72.35      73.4574      74.76.76     75.15  SERVICER RANKING BY ALLOCATION METRIC                                                                       ServicersServicersce                      METRIC                          Svcr 1      SvcrSvcr 2   SvcrSvcr 3  SvcrSvcr 4        1        % of borrowers in current repayment    2ndnd      4th4th       3rd          1st1st        2        % of borrowers 91-270 delinquent4t     4thh       3r 3rdd      2n 2ndd      1s 1stt        3        % of borrowers 271-360 delinquent2n    2ndd        1s 1stt     3r 3rdd     4t 4thh        4        Borrower Survey1s                      1stt       2n 2ndd      3rd         4t 4thh        5        FSA Survey                             4th4th     3r 3rdd      2n 2ndd      1 1st  SERVICER SCORES BASED ON RANKINGG (PRIOR(PRIOR to weighting)weigghhtingn )                                                                       ServicersServicersrvic                      METRIC                         SvcrSvvccr 1 SvcrSvcr 2   SvcrSv  3   Svcr 4        1        % of borrowers inn currentcurrent repayment3. 3.00 1. 1.00     2.0          4.0        2        % of borrowersrs 91-27091-270 delinquent 1.01.0  2.02.0        3.0          4.0        3        % of borrowersowers 271-360271-360 delinquent 3.03.3 0 4.04.0  2.0          1.0        4        Borrowerwer Survey                   4.044.0     3.03.0        2.0          1.0        5        FSASA Survey                         1.01.0      2.02          3.0          4.0  SERVICER SSCORESCORES BASEDD ON RANKINGRA G (WITH(WITH weightingweighting)weigh )                                                                                Servicers                      METRICMETRIIC                 WeightW    Svcr 1     Svcr 2      Svcr 3       Svcr 4        1        % of borrowersb s inn currentcurr  repaymentrepaym 30% 9.0 3.0        6.0          12.0        2        % of borrowers 991-2701-270 delinquent 15%     1.5        3.0         4.5          6.0        3        % of borrowersborroborrowewers 271-360271-360 delinquentdelinquent 15% 4.5 6.0 3.0 1.5        4        BoBorrowerrrower SSurSurveyu veey     35%      14         10.5        7.0          3.5        5        FSFSAA Survey                          5%      0.5         1          1.5          2.0  TOTAL SCORE BYY SERVICERSERVICERRVIC                                Servicers                                                      Svcr 1      Svcr 2     Svcr 3    Svcr 4                   TOTALTAL SCSCORE                    29.5        23.5       22.0      25.0 ALLOCATION EACH SERVICERR      WILL RECEIVE                                                        % of new volume     New Borr                                                       Servicer will receive (assumes                              Total Score             (Total Score/Comb Totals) 4M borr)     Svcr 1                     29.5                        29.50%           1,180,000     Svcr 2                     23.5                        23.50%            940,000     Svcr 3                     22.0                        22.00%            880,000     Svcr 4                     25.0                        25.00%           1,000,000 Comb Totals                    100                        100.00%           4,000,000                                             PAGE 11 OF 21  ED-FSA-09-D-0012/0080 

 

                                        Attachment Page                         Attachment A-6-- Servicing Pricing Definitions             Deliverable                                 Definition                                    Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have not separated from school as of the last day of  Borrowers in IN-SCHOOL status      the billing period.                                    Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have separated from school but are not yet due for a  Borrowers in IN GRACE status       payment this month.                                     Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have separated from school and would have had a                                     payment due this month, but the payment was replaced with a  Borrowers in Deferment             deferment.                                     Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have separated from school and would have had a                                     payment due this month, but the payment was replaced with a  Borrowers in Forbearance           forbearance.                                    Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who are currently:                                      Using the SCRA 6% interest limit (borrower has one or more                                     loans with rate reduced to 6% or SCRA eligible loans already at                                     or under 6%)                                      In a Military Service Deferment                                      In a Post Active Duty Deferment OR                                      Using for 0% interest while serving in hostile area (borrower                                     has one or more loans with rate reduced to 0%)                                     **NOTE - Any borrower with one/more loans meeting eligibility                                     for this category is included in this category (and payment rate)  Service Members                    regardless of the delinquency level, or status, of the loan.                                    Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have separated from school, borrower had a payment                                     due this month, and payment due was not satisfied by a                                     deferment or forbearance. The full payment was satisfied by the                                     borrower making a payment (or the borrower is due $0.00 on an                                     income related pay plan) and the borrower is not more than 5                                     days delinquent on any amount as of the last day of the billing                                     period.                                      If a newly originated consolidation is added to servicing system                                     with no payment due in the current month (first payment is prior  Borrowers in IN-REPAYMENT status   month) the borrower is included in the current category.                                      Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have separated from school and had a payment due                                     this month.  The full payment was NOT satisfied by the borrower                                     making a payment and the borrower is delinquent 6 to 30 days as  Borrowers 6 - 30 days delinquent   of last day of the billing period.                                   PAGE 12 OF 21  ED-FSA-09-D-0012/0080 

 

                                        Attachment Page                                      Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have separated from school and had a payment due                                     this month.  The full payment was NOT satisfied by the borrower                                     making a payment and the borrower is delinquent 31 to 90 days  Borrowers 31-90 days delinquent    as of last day of the billing period.                                    Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have separated from school and had a payment due                                     this month.  The full payment was NOT satisfied by the borrower                                     making a payment and the borrower is delinquent 91 to 150 days  Borrowers 91-150 days delinquent   as of last day of the billing period.                                    Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have separated from school and had a payment due                                     this month.  The full payment was NOT satisfied by the borrower                                     making a payment and the borrower is delinquent 151 to 270  Borrowers 151-270 days delinquent  days as of last day of the billing period.                                    Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have separated from school and had a payment due                                     this month.  The full payment was NOT satisfied by the borrower                                     making a payment and the borrower is delinquent 271 to 360  Borrowers 271-360 days delinquent  days as of last day of the billing period.                                     Number of unique borrowers (SSNs) with balance not equal to                                     $0.00 who have separated from school and had a payment due                                     this month.  The full payment was NOT satisfied by the borrower                                     making a payment and the borrower is delinquent 361 or more  Borrowers 360+ days delinquent     days as of last day of the billing period.                                     * Last day of the billing period = last day of each month                                   PAGE 13 OF 21  ED-FSA-09-D-0012/0080 

 

                                        Attachment Page          Forbearance Examples                         Deferment Examples   1)  Borrower due 14th monthly - on 1/1 a  forbearance is applied to cover Jan 14 - 1)  Borrower due 21th monthly - on 1/10 a deferment is applied  March 14.  Borrower will be due for the covering Jan 15 - July 25.  Borrower will be due for the Aug  April payment.                     payment.  Jan, Feb, Mar - billed as Forbearance Jan, Feb, Mar, Apr, May, Jun, Jul - billed as Deferment  April - billed as current if borrower makes Aug - billed as current if borrower makes payment or 6-30 if  payment or 6-30 if payment is not made. payment is not made.                                     2)  Borrower due 14th monthly - Borrower does not make Jan,                                     Feb, or March payments (goes 75 days delinquent as of March                                     30), but on April 1st requests an unemployment deferment that                                     covers January 10 to April 30.  Borrower will be due for May                                     payment.  2)  Borrower due 14th monthly - Borrower Jan - billed as 6-30 delinquent (borrower was delinquent as of  does not make Jan 14 payment, but request a end of Jan) one-month forbearance on Jan 28 to cover Feb & Mar- billed as 31-90 delinquent( borrower was the Jan 14 payment.  Borrower will be due delinquent as of end of Feb/Mar) for Feb payment.                     Apr - billed as Deferment   Jan - billed as Forbearance        May - billed as current if borrower makes payment or 6-30 if                                     payment is not made.                                 Current/Delinquent Examples   1)  Borrower due 14th monthly for  $225.00/month - borrower pays $225 for Jan 2)  Borrower due 14th monthly for $225.00/month - Borrower  payment on 1/13.  Borrower pays $225.00 pays $200.00 on 1/13.  Borrower pays $250.00 on 2/14.  Jan - on 2/20 for February payment. Jan & Feb - billed as 6-30 delinquent (payment was not fully satisfied as of  billed as current.  Borrower satisfied due end of month, still owed $25) Feb - billed as current.  Total due  amount for monthly payment prior to last from borrower ($250.00) has been satisfied by borrower  day of the month.                  payment.   3)  Borrower due 21st monthly for  $0.00/month - Borrower's on income plan  with payment calculated to be $0.  Borrower 4)  Borrower due 28th monthly for $175.00/month - Borrower  makes no payment in Jan or Feb and makes pays nothing in January but borrower pays $170.00 on 2/3, then  a $5.00 payment in March.          nothing for rest of Feb.    Jan, Feb, & Mar - billed as current.  Jan - billed as current (payment was not made in Jan, but  Borrower is not in forbearance or deferment borrower was not more than 5 days delinquent) and is due a payment calculated as $0 so the Feb - billed as current.  (payment was not made to cover 2/28  borrower has satisfied payment even if no due payment, but borrower was not more than 5 days delinquent) payment is made.                                   PAGE 14 OF 21  ED-FSA-09-D-0012/0080 

 

                                        Attachment Page                                  Service Member Examples   1)  Borrower meets eligibility for  maximum 6% interest rate - but loan is 2)  Borrower has multiple loans and is eligible for SCRA  already at 4.25%.                  maximum 6% rate - but borrower is 7 months delinquent.  Borrower is included in the service member Borrower is included in the service member category. category.   3)  Borrower has some loans eligible for  0% rate but other loans that are not eligible.  Borrower is included in the service member  category.  (Normally borrowers are billed in  the lowest category but if ANY loan is  eligible for the service member category, the  borrower is included in this category).   Retention of Borrower listings   Each servicer shall maintain a listing of all borrowers within their federal portfolio identifying which  borrowers exist in each status at the time of invoicing and/or metric submissions to FSA.  This information shall  be provided to FSA on demand and shall be maintained throughout the performance period and provided to FSA  at the end of the contract period. (See Attachment A-7, Borrower Status Reporting) Validation to be provided with Invoices & Metrics submission Each servicer shall provide sampling validation with the submission of each invoice and/or metrics submission  to FSA.  Sampling Instructions: Servicer shall randomly select 5 borrowers from each status category each month. If there are less than 5  borrowers in a category, select all borrowers in the category.    1. Servicer shall provide screen shots of the servicing system and narrative to support showing the status of        the borrower’s loan matches the status the loan is being invoiced at. Samples should be provided in        Word or PDF format.    2. Servicer shall include a listing of all loans on file for the borrower and the current status of each loan –       but only needs to include screen shots narrative for one of the loans that the loan is being billed at.    3. Servicer shall provide the samples at the time of invoicing and/or metric submissions to FSA.    4. Servicer shall submit the sample files EdServicerG@ed.gov and other email addresses as updated        periodically by FSA. All files should be submitted within encrypted zip files with password provided in        separate emails.    5. Servicer shall provide a contact (name/email/phone) that FSA may contact if additional samples are        needed (FSA may also select borrowers that require sample documentation similar to above).                                   PAGE 15 OF 21  ED-FSA-09-D-0012/0080 

 

                                           Attachment Page   NOTES:     1.   Common pricing shall apply regardless of program (i.e. Direct Loan, Federal Family        Education Loan) or volume serviced, unless otherwise noted in the contract.     2. Borrowers in multiple statuses shall be billed once, in the lowest performing deliverable status. The         lowest performing deliverable status is defined as the lowest unit priced deliverable.     3. Borrowers pending discharge, which include, but are not limited to: conditional disability, death, or        bankruptcy, shall be, for billing purposes, counted in the deliverable status at the time of the discharge       request.     4. “The last day of the billing period" is defined as the last day of the month.     5. The revised annual pricing period shall begin on the effective date of modification 0080.                                    PAGE 16 OF 21  ED-FSA-09-D-0012/0080 

 

                                         Attachment Page                     Attachment A-7—Borrower Status Reporting (Retention)  Report Format 50 character length Field    #    Length Start End           Description                 Valid Values/Format                          Counter - starts at 00000001 for                           each file.  Right justify, front filled                           with zeros.  (allows for up to 99M    1        818per category)                           00000001 to 99999999   2        1     9    9  Filler                       Space filled                          Servicer 6 digit Code - for example    3        61015(Great Lakes = 700581)                700XXX   4        1    16   16  Filler                       Space filled   5        9    17   25  Borrower SSN                 XXXXXXXXX (numeric)   6        1    26   26  Filler                       Space filled                                                        01 Borrowers in IN-SCHOOL status                                                       02 Borrowers in IN GRACE status                                                       03 Borrowers in Deferment                                                       04 Borrowers in Forbearance                                                       05 Service Members                                                       06 Borrowers Current                                                       07 Borrowers 6 - 30 days delinquent                                                       08 Borrowers 31-90 days delinquent                                                       09 Borrowers 91-150 days delinquent                                                       10 Borrowers 151-270 days delinquent                          Pricing Category - 2 digit code 11 Borrowers 271-360 days delinquent   7        22728representing the category             12 Borrowers 360+ days delinquent   8        1    29   29  Filler                       Space filled                          Borrower Principal Outstanding of 9999999.99 - 7 digits, decimal point, 2    9       10    30   39  ALL borrower's loans         digits  10        1    40   40  Filler                       Space filled                          Borrower Interest Outstanding of 9999999.99 - 7 digits, decimal point, 2   11       10    41   50  ALL borrower's loans         digits  12        1    51   51  Filler                       Space filled                          Month end date this report   13        85259represents                            MMDDCCYY      Servicer shall create 1 text file for each borrower status pricing category (format above).     Servicer shall create and store reports each month (not created on demand from query).     Servicer shall create report to be a "point in time" report showing the borrower status at the end of the month.     Servicer shall include each borrower in only ONE report per month - matching the status the borrower was billed at.                                    PAGE 17 OF 21  ED-FSA-09-D-0012/0080 

 

                                     Attachment Page   Servicer shall store reports in text format (to allow for uploading by FSA into other software if desired). Servicer shall provide the reports to FSA on demand. Servicer shall ensure the volume of borrowers in each category MUST match servicer invoicing (if corrections to  invoicing made, report should also be corrected). Servicer shall retain all reports for the duration of the contracts and provide to FSA at end of contract. Servicer shall provide FSA with a contact (name/email/phone) that can be contacted to request report delivery. Servicer shall create report with a sort by SSN (ascending).                                PAGE 18 OF 21  ED-FSA-09-D-0012/0080 

 

                                                    Attachment Page                   Attachment A-8 —   Quarterly Delinquency Reduction Compensation Report                        [Servicer Name] - Quarterly Delinquency Resolution Compensation Report                                         Quarter Ending – (Month, Year)   Award     Fee                       Description                     Percentage  NUMERATOR:      DENOMINATOR:      1      Delinquency Percentage - Current Quarter               %                               Description                     Percentage  NUMERATOR:      DENOMINATOR:             Delinquency Percentage - Prior Quarter                 %  Results should be rounded to the 100th of a percent (i.e.    .1534677 = 15.35%, .02465123 = 2.47%)  Qualification for Delinquency Resolution Compensation (As submitted by Servicer)                                                                Qualifies                               Description                        (y/n)           Delinquency Percentage for Quarter End of less than   Level 1           23.0%.           Delinquency Percentage for Quarter End of less than   Level 2  23.0% (earns $200,000) AND Servicer improves upon            prior Quarter End Delinquency Percentage            Delinquency Percentage for Quarter End of less than   Level 3  21.0% AND Servicer improves upon prior Quarter End            Delinquency Percentage  This report shall be submitted by each servicer for each quarter ending September, December, March and June of each year.   This report shall be submitted to EDServicerG@ed.gov and other email addresses as updated periodically by FSA by the 15th  calendar day of the month following quarter end (other addresses may be added by FSA).  The report shall be submitted with a subject line of "Quarterly Delinquency Reduction Report - 700XXX - MMCCYY" - where  700XXX = servicer ID and MMCCYY = quarter end Month & Year  (i.e.  Great Lakes for quarter end December 2014 subject would be Quarterly Delinquency Reduction Report - 700581 – 122014) This report shall also be submitted to the COR/CO along with the request for evaluation of Quarterly Delinquency Reduction  Compensation qualification.  Notes about Delinquency Reduction Compensation Calculations  Volumes used in the above calculation should be the same volumes, by category, that have been submitted with the monthly invoice. Delinquency Resolution Calculation (higher % results = better metric result)           Borrower Delinquency Percentage           Total count of borrowers in the 31-360 days delinquent statuses           Divided by           Total count of borrowers in In Repayment status and borrowers in the 31-360 days delinquent statuses  In school, in grace, service members, deferment, forbearance, and >360 delinquent borrowers excluded from numerator &  denominator of calculation                                             PAGE 19 OF 21  ED-FSA-09-D-0012/0080 

 

                                      Attachment Page                        Attachment A-9 — Monthly Invoice Report  Servicers shall submit the following report with their monthly invoices in Microsoft Excel.    Contract Number              ____________  Vendor Name                  ____________  Invoice Start Date           MM/DD/YYYY  Invoice End Date             MM/DD/YYYY              Status                Volume  In School  In Grace  In Repayment  Service Member  Deferment  Forbearance  Delinquent 6-30 Days  Delinquent 31-90 Days  Delinquent 91-150 Days  Delinquent 151-270 Days  Delinquent 271-360 Days  Delinquent > 360 Days  Total                                 PAGE 20 OF 21  ED-FSA-09-D-0012/0080 

 

                                                   SCHEDULE Continued  ITEM NO.                        SUPPLIES/SERVICES                     QUANTITY     UNIT        UNIT PRICE  $         AMOUNT  $                                                                                                                                        Contracting Officer: Soo Kang, 202-377-3798,              soo.kang@ed.gov              Primary Contracting Officer Representative: Tammy              Connelly, 202.377.3298, tammy.connelly@ed.gov              Alternate Contracting Officer Representative(s):             Lynn Smith, 202-377-3577, lynn.smith@ed.gov             Patrice Washington, (202) 377-3845,              Patrice.Washington@ed.gov              Primary Technical Point of Contact: None              Alternate Technical Point of Contact(s):             None                                                       PAGE 21 OF 21  ED-FSA-09-D-0012/0080

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