Common Review Initiative Update

Boston Guaranty Agency Summit

August 31, 2005

CRI Concept

Guarantors are combining resources to conduct a single review of large lenders and servicers

These CRI reviews will go toward meeting the requirements of 682.410(c)(1) for each CRI-participating guarantor

Significant Events

By the end of the CRI pilot, review teams will have conducted 11 CRI reviews

On-site visits completed at Suntech, MOHELA, Wells Fargo, AES, ACS, Edfinancial, KHESLC, Nelnet, SLMA, Educaid

Citicorp visit scheduled for 9/26

Significant Events

One new participant - Georgia Non-participants currently are:

Alaska CSAC/EdFund New Hampshire North Carolina

Significant Events

New leadership for current and next biennium Rick Buckingham, USA Funds Chair through

2005 Becky Collins, Student Loan Guarantee

Foundation of Arkansas Chair for 2006-2007

Significant Events

Successful reviewer training session October 2004 meeting in Texas Approximately 60 attendees Another training session scheduled for

October 25-26, 2005

Significant Events

Change in review scheduling policy Not all guarantors using same standards for

review selection Agreed to selection based on previous year’s

volume as of 9/30

Significant Events

Creation of quality assurance group Co-chaired by Greg Schweitzer (Great Lakes)

and Bernie Girata (AES/PHEAA) Conducted by two reviewers NOT part of

review team Performing analyses of completed reviews to

ensure proper documentation Before reports issued, reviewing workpapers

and reports for consistency and quality

Significant Events

Significant Events

Planning for CRI’s future Currently a pilot program approved through

12/31/2005 Met with ED to discuss CRI’s future Delivering request for permanence today

CRI Goals and Report Card

Improve the quality of lender program reviews conducted by guarantors (including non-CRI reviews)

Reduce redundancy of reviews by guarantors

Report Card on Quality

Attribute testing Statistically valid sampling Continual tweaking of workpapers Six reviewers instead of 1-2 Consistent documentation Reviewer training Quality review process

Report Card on Redundancy

Can look at this two ways If all guarantors had conducted servicer

reviews, CRI eliminated 125 guarantor reviews that would have been conducted

11 CRI reviews covered 248 reviews required by 682.410(c), eliminating 237 individual lender reviews

Report Card on Redundancy

Average cost of CRI review = $5,783 (6 reviewers)

Average cost of non-CRI review = $964 (1 reviewer)

Guarantor savings Servicer reviews - $67,491 All reviews - $175,459

Questions??