Ombudsmen Panel:
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Transcript of Ombudsmen Panel:
Ombudsmen Panel:
Student/Borrower Advocate – The Role of the Ombudsman
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FSA Ombudsman FY2012 Update
• 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
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Caucus BackgroundVision:• 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.
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Trends Committee• 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
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What are our Industry Top 5 Trends?
• Account Balance• Loan Cancellation/Discharge• Repayment Plans/Amounts
(excluding IBR)• Default (excluding rehabilitation
issues)• Service Quality (excluding split-
servicing)
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Top Issue – Account Balance• 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?
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The Caucus Hears…• 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
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Case Study #1:
Non-defaulted Customer
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The Caucus Hears…• 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
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Case Study #2:
Defaulted Customer
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Framing Recommendations• 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
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What the Data Reveals• 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
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What the Data Reveals• 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
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Next Steps:• 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 [email protected] to be
added to the List Serv
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Contact Information• Joyce DeMoss
[email protected]• April Petroski
[email protected]• Tracy Stine
[email protected] • Diane Zitur