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Federal Loan Servicing

MSFAA Summer Conference 2010

Presenters:

Jennifer ChandlerSenior Account ExecutiveSallie Mae

Roger EldridgeVice President, Marketing-MidwestGreat Lakes Educational Loan Services

June 28, 2010

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Agenda

Historical Perspective Federal Loan Servicing Announcements and Resources Borrower Advocacy

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Historical Prospective

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Elimination of FFELP

1993: Direct Lending created to replace FFELP by 1998

2005: Higher Education Reconciliation Act (HERA)

2007: College Cost Reduction and Access Act (CCRAA)

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Elimination of FFELP

2008: Ensuring Continued Access to Student Loans Act (ECASLA)

2009: Student Aid and Fiscal Responsibility Act (SAFRA)

2010: Health Care and Education

Reconciliation Act

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Federal Loan Servicing

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Federal Loan Servicing

Federally held FFELP Loans (PUT Loans)

Federal Direct Loans

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Becoming a Federal Loan Servicer Great Lakes, Sallie Mae, NelNet and PHEAA

selected as a federal loan servicers on June 17, 2009

Servicers given final approval to service Federal put loans on August 28, 2009

Servicers must be ready to begin Direct Loan Servicing by August 31, 2010

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Defining Loan Servicing

Helping borrowers manage their loans Explain tools and options available Repayment counseling

Perform due diligence activities Assist schools with default prevention efforts How services are provided

Telephone center support Online resources

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Defining Loan Servicing

Difference between federally held FFELP and Direct Loans Terms & conditions Reporting requirements Origination point

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Servicing Guidelines

Approach Servicers must comply with all legislative and regulatory

requirements unique best in business services.

System / Process Modifications Allocation Process

Borrower Centric Approach Customer Satisfaction Surveys

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Customer Surveys

Customer Services Survey Results 1st Quarter results released March 10, 2010 2nd Quarter results complied, not yet released Explanation of Results Customer Service Performance Scores Allocation Metric Calculation

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School Support

New reports New guides Training events The New School Initiative

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Commonly Asked Questions

How will loans be allocated between the servicers?

Will schools or students be able to choose which servicer they work with?

How will split servicing situations be handled?

How will customer satisfaction be measured? Additional questions…

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Announcements and Resources

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DOE Electronic Announcements Distributed via IFAP

August 28, 2009: Transition to Additional Servicer Support

September 16, 2009: Customer Service and NSLDS Information for Federally Held Student Loans

March 26, 2010: Q&A About Servicing federally Held Loans

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Additional Resources

Additional resources / websites NASFAA, MASFAA, & MSFAA

NASFAA Conference July 18-21, Denver Colorado

2010 FSA Conference November 30 - December 3, Orlando, Florida

Extensive Direct Loan transition training and support developed

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Borrower Advocacy

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Borrower Advocacy

Financial aid guidance for students and families

Training for college and university financial aid officers

Programs and resources to increase college access

Support for persistence and completion programs

Relevant entrance and exit student loan counseling for borrowers

Financial literacy education for all students

Counseling to help borrowers select the right repayment options

Counselors to help borrowers avoid delinquency and default

Support to help defaulted borrowers rehabilitate their loans

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Thank you!

Jennifer Chandler

Jennifer.chandler@salliemae.com

(765) 473-5761

Roger Eldridge

reldridge@glhec.org

(608) 770-5954