Session 15

Direct Loan
Servicing Site Tool

Session 15- 2
 Goal

Introduce The Direct Loan

Late Stage Delinquency
Assistance Initiative
It’s New! It Works!

Session 15- 3
 Agenda
n Direct Loan Statistics
n Delinquency Pattern
n Defaulter Characteristics
n How Schools Can Help
n What Tools Can Make it Easy

Session 15- 4
 Direct Loan Statistics
n As of January 2002 we had:
– 39,651,143 Direct Loans disbursements to
date
– 5.7 million “active” borrowers
– An active portfolio valued at $72 billion
– 75 million payments collected to date
– Payments valued at $15.9 billion to date
– 471,091 borrowers actively using EDA

Session 15- 5
 Default Rate Trend

Default Rate Reduction Initiative

10.00% 200,000
8.00% 150,000 Borrower Default
6.00% Rate
100,000
4.00% Number of Borrowers
2.00% 50,000 Defaulted

0.00% 0
1997 1998 1999

Session 15- 6
 Borrower Delinquency Pattern
50
45
Delinquency Percentage

40
35
30
25
20
15
10
5
0
31-60 61-90 91-120 121-150 151-180 181-210 211-240 241-270 Over 270

Session 15- 7
 Makeup of Cohort Rate

Cohort Default Contribution by

School Type

100% 4 Year Private

4 Year Public
50% 2 Year Private
2 Year Public
0% Proprietary
1997 1998 1999

Session 15- 8
 Defaulter Characteristics
n 82% do not get the advantage of “aging through”
their full 6 month grace as the result of late
enrollment notification
n 67% have withdrawn from school and did not
complete their studies
n 40% have bad telephone numbers
n 71% have not been successfully contacted by
telephone during the 12 months of collection
effort

Session 15- 9
 Schools Can Help
n Assist the Service Center in finding and
counseling severely delinquent students
n Contact the student and counsel them on
their rights, benefits, and responsibilities
n Contact the student and transfer to
Servicer or have a three way conference

Talking to the student borrower makes all the difference

Session 15-10
 The Tools
n Direct Loan Web Site gives you the
flexibility to identify the student borrower
population you want to work
n School Services is your point of contact to
provide assistance to the borrowers’ needs
call 1-888-877-7658

Session 15-11
With the Web Site you can see
as little or as much as you want

The Web Site offers

you summary and
detail information
about delinquent
borrowers

Session 15-12
Summary Information

You can see

the
delinquency
status of
your student
borrowers

Session 15-13
Detail Information

You can
elect to
see detail
of all
borrowers
in the 271-
360 days
delinquent
category

Session 15-14
Cohort Year Delinquency

You can elect

to see
severely
delinquent
borrowers for
a selected
cohort year

Session 15-15
Cohort Year Delinquency
Detail

You can work

as little or as
much as you
want

Session 15-16
 School Services offers
assistance options
n Can provide you with scripts on how we
counsel your student borrower
n Will assist you while on a call with a
delinquent borrower 1-888-877-7658
n Will ensure the student is given assistance
after you contact them

Session 15-17
 Why Does This Work?
n It’s easy to see the need to assist with late stage
delinquency
n Schools don’t need to wade through every delinquent
student
n Use the web tools to identify the accounts you are
able to help collect
n Minimal effort, maximum results
n Service Center is available to assist
1-888-877-7658
n No financial or contractual commitment

Session 15-18
 Contact information:
John Pierson
SFA School Relations
Telephone: 404-562-6269
Email: John.Pierson@ed.gov
or
Ben Leborys
Direct Loan Repayment
Telephone: 202-377-3271
Ben.Leborys@ed.gov

Session 15-19
 QUESTIONS ?
Who is willing to start ?

Session 15-20