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Ombudsmen Panel:

Ombudsmen Panel:. Student/Borrower Advocate – The Role of the Ombudsman. FSA Ombudsman FY2012 Update. 34,909 contacts received Increase over FY2011 Increase in Research cases Economic issues Loan transfers System conversions Collaboration with CFPB

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Ombudsmen Panel:

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  1. Ombudsmen Panel: Student/Borrower Advocate – The Role of the Ombudsman

  2. FSA Ombudsman FY2012 Update Navigating the Sea of Change 2012 NCHER Knowledge Symposium • 34,909 contacts received • Increase over FY2011 • Increase in Research cases • Economic issues • Loan transfers • System conversions • Collaboration with CFPB • Link from CFPB.gov to FSA Ombudsman site

  3. Caucus Background Navigating the Sea of Change 2012 NCHER Knowledge Symposium Vision: The vision of the Caucus of Student Loan Ombudsmen (the Caucus) is to: provide a resource for the creation and support of highly effective student aid problem resolution methodologies, techniques and processes that promote equitable services for all federal student aid participants. Mission: The mission of the Caucus is to: provide training and mentoring; identify and report on trends to support positive change through industry best practices and legislation; and serve as a voice of fair process throughout the student loan life cycle.

  4. Trends Committee Navigating the Sea of Change 2012 NCHER Knowledge Symposium Analyzes Data from FSA Ombudsman’s Office(Inquiries/escalation from customers throughout the industry) Adds in data from all participating Servicers and Guarantors for non FSA volume – full picture

  5. What are our Industry Top 5 Trends? Navigating the Sea of Change 2012 NCHER Knowledge Symposium Account Balance Loan Cancellation/Discharge Repayment Plans/Amounts (excluding IBR) Default (excluding rehabilitation issues) Service Quality (excluding split-servicing)

  6. Top Issue – Account Balance Navigating the Sea of Change 2012 NCHER Knowledge Symposium Averages 26-28.5% of overall volume over last 11 years; Questions/issues differ from non-defaulted compared to defaulted borrowers; Questions/issues cover a broad range of sub-topics What types of questions/complaints does your organization receive regarding account balances on loan accounts?

  7. The Caucus Hears… Navigating the Sea of Change 2012 NCHER Knowledge Symposium • From non-defaulted borrowers: • - Disbursement amounts • - Payment application • Pre-Payment • Interest capitalization (the effect of deferments and forbearances) • Subsidized vs Unsubsidized loans • Change in Payment Plan (example ICR to standard) • Simple daily interest accrual • Interest rate changes • Fees assessed

  8. Case Study #1:Non-defaulted Customer Navigating the Sea of Change 2012 NCHER Knowledge Symposium

  9. The Caucus Hears… Navigating the Sea of Change 2012 NCHER Knowledge Symposium • From defaulted borrowers: • Payment application – collection costs • Interest capitalization before default and after rehabilitation; • Subsidized vs. Unsubsidized loans • Simple Daily interest accrual • Interest Rate changes • Collection Costs – how much is charged • Effect on rehabilitation and consolidation • Offset payment application

  10. Case Study #2:Defaulted Customer Navigating the Sea of Change 2012 NCHER Knowledge Symposium

  11. Framing Recommendations Navigating the Sea of Change 2012 NCHER Knowledge Symposium List is long; must be prioritized No single problem or solution Use data to prioritize and provide a place to start Review contacts received about Account Balance from 28 Caucus members during FY2012

  12. What the Data Reveals Navigating the Sea of Change 2012 NCHER Knowledge Symposium • Account Balance represents nearly 67% of all contacts received by Caucus members, including FSA, from non-defaulted borrowers through 3rd quarter of FY2012 • FSA identifies more specific issues from non-defaulted borrowers: • loan disbursement timing and accuracy; • Interest accrual • Payment posting

  13. What the Data Reveals Navigating the Sea of Change 2012 NCHER Knowledge Symposium • Account Balance represents roughly 33% of all contacts received by Caucus members, including FSA, from defaulted borrowers through 3rd quarter of FY2012 • FSA identifies more specific issues from defaulted borrowers: • Challenges to the validity of debt • Late charge disputes (including collection costs) • General questions about balance calculation

  14. Next Steps: Navigating the Sea of Change 2012 NCHER Knowledge Symposium Work to create simple explanations for each steps Create a consistent message for customers Additional Communication Opportunities Share trend data with the Caucus and participate - Calls take place 3rd Tuesday of the month at 3pm eastern - Contact Vicki Shipley at vshipley@ncher.us to be added to the List Serv

  15. Contact Information Navigating the Sea of Change 2012 NCHER Knowledge Symposium Joyce DeMoss Joyce.DeMoss@ed.gov April Petroski April.M.Petroski@salliemae.com Tracy Stine Tracy.A.Stine@salliemae.com Diane Ziturdzitur@ecmc.org

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