rfi/rfp guidelines

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RFI/RFP Guidelines

Provided by CLFECASFAA 2008, December 8, 2008Anaheim , CA

Presented by,Thalassa Naylor, Sallie Mae

Why have a lender list? 2

For your students Competition encourages quality improvements

and good service Choice – ability to pick the best lender for them Protection from predatory lenders

For your financial aid office Lenders that use your preferred process Lenders that you have pre-screened for service

and other important factors Control your office time investment

RFI or RFP?3

Request for Information (RFI) Request made during the project planning phase where a buyer still may need to identify product requirements, specifications, and purchase options. RFIs typically indicate that award of a contract will not automatically follow. Often followed by RFP.

Request for Proposal (RFP) An invitation for providers of a product or service to bid on the right to supply that product or service to the individual or entity that issued the RFP.

Why do an RFP?4

To ensure fairness in lender selection and create an audit trail for federal compliance

To find lenders that use your school’s preferred process

To find lenders that offer the best quality products and services for your students

To ensure that you are providing your students with a list of committed and reputable lenders

The RFP Process5

1. Planning2. Survey Development3. Solication4. Scoring/Selection 5. Notification

Planning6

Planning is bringing the future into the present so that you can do something about it now.

- Alan Lakein, time management expert

Begin with the end in mind.- Stephen Covey

Planning7

RFP CommitteeDraw from more than just the

financial aid office – others with a vested interest in the end results. FA Office Business Office/Bursar Student Representative

Planning8

DefineTimeline When do you need to have your lender

list? How much time to do you need to

prepare? How much time do you need to review? Build in a recommended 6 weeks for

lenders to respond (less than 4 is challenging for lenders if you want quality responses)

Planning9

Planning &Development Lender Response Time Evaluation Decision

1/1 – 1/15 1/16 – 2/28 3/1 – 3/14 3/15

Plan Respond Eval List

Planning10

Selection CriteriaWhat factors will you use to select your

lenders?What is most important to the institution?What is most important to the your students

More on this later…

Planning11

Develop a scoring methodologyCreating a way to score the responses is

important:a numeric way to compare lender responses

that is less likely to be subjective.You can weight more heavily things that are

of more importance

Planning12

RFI StructureClearly numbered response questions will

ensure every response can be comparedOrganization of questions by topic ensures

focused responses and makes review easierOnline/electronic response vs. paperSupplemental requested materials

Survey Development13

Define how you want to base your decision and build survey around these criteria. For example: Lender stability and commitment Customer Service Process Flow Specific Products Need Debt Management/Default Prevention Other criteria

Survey Development14

General Lender InformationStability and financial strength

how will they fund the loans short and long term financial positioning

Experience in Student LendingCommitment (what do they do beyond just the

loan?) Financial literacy Outreach Scholarships Philanthropy and CommunityService

Survey Development15

Customer ServiceBorrower service experienceSchool service & supportOnline optionsCollateral and information Financial Literacy and EducationDebt ManagementDefault Prevention

Survey Development16

Platform & ProcessingDefine your preferences

Can lenders use your preferred process? If not, what is their process?

Guarantor choiceBorrower application processLoan deliveryServicing

Survey Development17

Possible FFEL TopicsFunding stabilityGuarantor partnersBorrower benefits*Debt management & default preventionOther value added servicesPLUSServicing * Loan Sales **may be irrelevant in current market

Survey Development18

Possible Private Loan TopicsEligibility CriteriaPricingBorrower benefitsCustomer serviceRepayment optionsCosignersProgram specific loansDebt management & default prevention

Solicitation19

Invitation to Respond/CommunicationProvide complete information on

when, how, to whom, supplemental materials required.

What’s in it for the lenders? total volume for each loan product # of lenders to be selected Length of placement

Solicitation20

Getting invitations out to lenders:ListServ (ie. CASFAA)Personal invitations to lenders – hard

copy or electronic (preferred)CLFE

Scoring, Review and Selection21

Each response received should be run though your scoring and review model developed during planning.

Any follow up or clarification requests should be determined quickly so lenders can respond.

Select your final list of lenders!

Notification22

Notify all selected lenders promptly in writing (email is fine).

Notify all non-selected lenders promptly in writing (email is fine). If possible, provide those not selected

with reasons for non-selection. Assists them in understanding where they are not competitive, where they didn’t meet your processing criteria, or where they can improve.

Remember 23

Include at least three unaffiliated lenders (not same ownership).

Disclose that borrowers have the right to choose any lender, including lenders that are not on the lender list.

disclosing the criteria used to select the lenders on the lender list (this can be generically stated ie. Best customer service, met our institutions processing flow standards).

reviewing the lender list frequently

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The following CLFE members indicate they provide support, tools or resources for developing an effective lender RFP.

Great Lakes GreatLakesRFPTeam@glhec.orgSallie Mae

http://www.salliemae.com/schools/financial_aid/straight-talk/seven-steps.htm TGSLC List Assist

http://www.tgslc.org/products/listassist/ or contact TG’s Lender Consultant team at lenderrequests@tgslc.org

Total Higher Education (T.H.E.)http://www.theloanprogram.org/FAO/lenderpartners.aspx or contact Lacey Carter at lcarter@theloanprogram.org

USA Fundscontact your USA Funds representative or Brent Dove at

brent.dove@usafunds.org

CLFE Resources25

For the latest updated information, please go to our website at

www.CLFE.org

Thank you!

Acknowledgements26

This presentation and information compiled by the CLFE RFP Committee: Thalassa Naylor, Sallie Mae Lacey Carter, Total Higher Education Kim Thomas, National Student Loan Program

For more info and a more detailed document containing this information, please visit our website at www.CLFE.org