DEPARTMENT OF EDUCATION LOAN
SERVICES
July 17, 2012
Anthony Lombardi
WFAA Summer Workshop
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.
Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
Sallie Mae Does Everything To Help
Students Succeed and Effectively Pay
Back and Manage Their Loans

Department of Education Loan Services
Today’s Agenda-
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Contacting Us & Resources for Schools
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Resources for Borrowers
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Loan Servicing Overview
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Default Prevention
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Current Hot Topics
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Questions & Next Steps
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
Contacting Us and Resources for Schools

Department of Education Loan Services
Contacting Us
Sallie Mae keeps schools informed through: E-mail, CollegeServ call center representatives, Our “Servicing” Website, Sales and ED Contract
Management Meetings, Training Webinars, OpenNet, and as part of our participation at over 40 financial aid conferences each year.
CollegeServ
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Answers questions, provides assistance & reports
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Answers cohort agency status questions
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Provides training and support for OpenNet
CollegeServ
1-888-272-4665
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
Contacting Us
Sallie Mae-Dept of ED Loan Services
NSLDS Servicer Code: 700578
Student and Parent Phone ED : 800-722-1300
Student and Parent Line Commercial : 888-2SALLIE (888-272-5543)
Hours : M-TH 8:00am – 9:00pm F 8:00AM – 8:00PM (EST)
Web : www.salliemae.com
CollegeServ : Dedicated group of representatives specifically trained to support
Sallie Mae's school customers for all ED and non-ED related inquiries
School Phone : 888-2SCHOOL (888-272-4665)
Hours: M-F 8:00am
– 8:00pm (Eastern Time)
Web : www.opennet.salliemae.com
and www.salliemae.com/EDServicing
E-mail: CollegeServ@SallieMae.com
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
Resources for Schools - OpenNet
OpenNet – school portal for borrower and loan inquiries
►
See our OpenNet training page as it has a mix of videos and documents covering topics like Adding/Updating a school user, the servicing guide, Granting access to users
(under servicing), Contact Information, and the
FAQ.
We also have user guides and info on DDI
Reports.
►
ED-only: https://www1.salliemae.com/content/doe/docs.html
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
Resources for Borrowers

Customer Communication: Early Outreach
 We provide helpful, relevant and easy to understand
Information on how to:
 Manage their loan account on-line, via the IVR or by a Service Representative
 Take advantage of Electronic Servicing (monthly billing, auto debit, e-mail) options that can save money (ACH benefit on all ED-owned loans)
 Change to one of many repayment options that best suit their situation
 Receive payment relief
 Maintain the benefits of good credit
 Our Interactive Web Portal “ SallieMae.com/BeDebtSavvy ” helps students:
 Budget for college and repayment
 Understand what credit scores and FICO are
 Become more aware of issues with credit card debt
 Understand the flexibility and benefits of the many loan repayment options
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.
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Customer Communication: Quarterly Interest Statement
 Sent to customers until their accounts enter Repayment
 Includes interest information, loan balance, and anticipated repayment begin date
 Includes remit slip for customer convenience in case they choose to pay interest early to avoid capitalization
 Includes information on benefit of paying interest:
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Customer Communication: Exiting School Email
 Key messages
– Automatic debit
– Update address and phone
– How to make payments
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Customer Communication: Early Repayment Sample
 Key messages
– Where to get answers
– Planning for successful repayment
– Online account access
– How much do I owe
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Customer Communication: Monthly Billing Statement
Provides relevant messages to help borrowers at critical times in the loan life-cycle to better manage their account
Links to online account features
Provides critical account details
Provides slip to return with payment
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Customer Relationships: On-Line Tools
 Login easily accessible
L OG ON VIA WWW .
SALLIEMAE .
COM
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.
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Account Summary & Transaction Overview
 Account Summary provides:
– Loan Balance
– Interest (capitalized and accrued)
– Total amount owed
– Past due amount
– Late fee(s) N/A for ED
– Payment Amount
– Due Date
– Loan Advisor/Messages
– Navigation to view correspondence, last three payments, on-demand printing, and any borrower benefits
– Other Transactions
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.
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Department of Education Loan Services

Department of Education Loan Services
Loan Servicing
Loan
Booking
In School In Grace Repayment
Delinquency and Default
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
Loan Booking  Assignment
When and how is the servicer assigned?
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FSA designates the servicer upon the booking of the loan. Booking occurs when
COD accepts an origination record, links to the prom note and accepts actual disbursement.
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New borrowers are assigned to Sallie Mae,
Great Lakes, FedLoan, or Nelnet based upon percentages assigned by FSA.
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Borrower Mailed a Welcome Letter within 24 hours of Loan Conversion to our System
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
Loan Booking  Borrower Notices
How do I know which servicer is servicing my loans?
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When a Direct Loan is assigned to a federal loan servicer, the servicer corresponds with the borrower.
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The welcome correspondence notifies the borrower of the servicer, toll-free phone number, and website information.
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Borrower may visit NSLDS.ed.gov
to identify their federal loan servicer(s).
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Forgot the PIN? Visit PIN.ed.gov
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
In School  Interest Payments
How do I make interest payments on my unsubsidized loans while I’m in school?
►
Stafford borrowers can securely access their account and make a payment on www.SallieMae.com
at any time.
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Sallie Mae sends quarterly interest statements* while in school or grace.
* email is the only option for these notices.
Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.
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Department of Education Loan Services
Grace Period  Deferred Repayment (PLUS)
When must I begin repayment on my loan? Do I get a grace period?
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Stafford Loans: 6-month grace period begins the day after they graduate, leave school, or drop below half-time status.
Payments are due after the grace period ends.
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Grad PLUS: Borrowers can postpone payments while enrolled at least half time. May also postpone payments for the 6 months after they graduate, leave school or drop below half time (for loans first disbursed on or after July 1, 2008).
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Parent PLUS: Can request to postpone payments while the student for whom they obtained the PLUS Loan is enrolled at least half time. May also request to postpone payments for the 6 months after the student is no longer enrolled at least half time (for loans disbursed on or after July 1, 2008).
Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.
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Department of Education Loan Services
Grace Period  Entering Repayment
What are the most important things a student should know as he/she prepares for loan repayment?
Important messages for borrowers as they are leaving school and entering repayment:
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Check NSLDS to identify all federal loans
Provide servicers with updated contact information
Sign up for online account access
Sign up for automatic debit to ensure timely payments and receive a
0.25% interest rate reduction
Call the servicer or visit servicer’s website to obtain information on repayment options that best meet the borrower’s financial situation.
Sallie Mae offers robust payment plan modeling tools and easy online sign-up for repayment plan options.
Understand that servicers are there to help!
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
Repayment  Deferment
Can I provide my servicer one deferment form for my ED held FFEL and DL loans?
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As a general rule, the FFEL or Direct Loan
Program deferment form is acceptable for all deferment requests for federally-owned loans.
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In some cases, a FFEL form must be used for FFEL program loans and a DL form for
Direct Loans.
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
Repayment  Billing
Payment Fees? Late Fees?
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No fees on payment methods
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No late fees
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No fees on any other activities associated with the servicing of federally-owned loans
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services
Default Prevention

Graduation Lessens the Chance of Default
Default Rates
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
3,7%
16,8%
Borrowers who graduated
Borrowers who dropped out
Source: Education Sector, Degreeless in Debt
Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.
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Customer Resolution Services
Focus on The Customer Experience
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Our Collections Staff encourages and supports staff with coaching and development based on the following key components:
– Delinquency Resolution
– Counseling
– Customer Experience
– Compliance
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Quality directly impacts our staff providing a vested interest to consistently provide our customers with world class service.
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Management completes a minimum of 4 random monitors per month for each agent.
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Collection’s senior management conducts frequent group listening sessions each month to ensure consistency and gain a clear understanding of the impacts to our customer base.
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Customer Resolution Services
Technology Used in the Our Business
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Sallie Mae Servicing Systems
– CARES – Graphical user interface presents account information to agents in an easy to use format
– CLASS Servicing System - All account activity is documented in this Sallie Mae system of record
• System logic ensures all due diligence activity is completed as required
Auto-Dialer
– Blended auto-dialer environment with capability for high volume calls
Collection Strategy
–
Strategy team provides ongoing analysis and modeling for all stages of delinquency
– Strata decision engine used to assign delinquent accounts to strategic dialing campaigns
– Targeted letter, email, and text message campaigns
Vendor Activities
– The skip tracing division’s process is enhanced with the use of CLASS automation that enables import transactions with commercial vendor batch data
Quality Monitoring
–
NICE
– Call monitoring system used to record calls for training and quality feedback purposes
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Customer Resolution Services
Contacting the Borrower
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Sallie Mae’s collection practices are designed to maintain and exceed, at all times, the student loan collection standards set forth by the U.S. Department of
Education.
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Upon reaching the 15 th day of delinquency, intensive default prevention campaigns are executed by Customer Resolution Services.
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Collection activities are performed at the borrower level. For borrowers who have a combination of loan types or guarantee agencies, collection activities are no less rigorous than the most stringent guarantee agency’s requirements.
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Customer Resolution Services
Collections Due Diligence and Calling Strategy
(Collection Strategies and Activities are Subject to Change)
ED Owned
Default @ 360
Tel = 2-3 days
UPS Letter @ 330
Testing @ ~ 330
Dedicated
Collector assigned
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Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.

Department of Education Loan Services

Hot Topics
►
Income Based Repayment Options
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Serial Transfers
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Special Direct Consolidation Loan
Opportunity
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Interest Capitalization
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Forbearance – 36 month continuous cap
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Cohort Default Rates
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CDR Appeals
Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.
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Questions?
Customer Resolution Services

Contacts
CollegeServ 1-888-272-4665
Anthony Lombardi 206-200-8815
Anthony.Lombardi@salliemae.com
Confidential and proprietary information © 2012 Sallie Mae, Inc. All rights reserved.
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