education department dwight vigna director, default division 1
TRANSCRIPT
Education Department
Dwight VignaDirector, Default Division
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FSA Default Division Goals
•Goal 1: Be respectful to our borrowers and find the best solution that will resolve the borrower’s debt regardless of the commission being paid
•Goal 2: Increase the FSA overall collection rate on a year to year basis even though the inventory is also increasing annually
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Default Recoveries- In Billions
Combined EDFY14 - $20.4 $10.63FY13 - $18.2 $ 8.51FY12 - $13.1 $ 3.68FY11 - $12.0 $ 3.40FY10 - $10.2 $ 3.04FY09 - $ 8.8 $ 3.07FY08 - $ 8.9 $ 3.21FY07 - $ 6.9 $ 2.67
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FY14 Top Ten By Recovery Rate
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Rank Agency CollectionsAdjusted Beginning
Inventory Percent1 ARKANSAS 80,087,206 179,678,104 44.57%2 RHODE ISLAND 45,043,494 119,499,832 37.69%3 LOUISIANA 68,486,357 185,040,695 37.01%4 OKLAHOMA 139,862,143 396,963,955 35.23%5 MAINE 17,395,905 50,886,106 34.19%6 ASA (MASS) 1,005,222,247 3,048,566,099 32.97%7 USAF 1,807,459,205 5,647,187,947 32.01%8 NSLP (NEB) 335,207,453 1,062,303,285 31.55%9 MISSOURI 103,599,498 332,591,977 31.15%10 KENTUCKY 143,403,552 476,409,977 30.10%
FY14 Top Ten by Recovery Rate w/o
Consols
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Rank Agency Collections Beginning Inventory Percent1 ARKANSAS 65,972,070 179,678,104 36.72%2 LOUISIANA 61,227,965 185,040,695 33.09%3 OKLAHOMA 120,264,645 396,963,955 30.30%4 RHODE ISLAND 34,592,910 119,499,832 28.95%5 MAINE 14,547,397 50,886,106 28.59%6 USAF 1,551,806,444 5,647,187,947 27.48%7 NELA (WA) 76,462,116 293,788,278 26.03%8 NEW HAMPSHIRE 14,639,002 58,581,342 24.99%9 KENTUCKY 115,032,056 476,409,977 24.15%10 COLORADO 215,090,003 946,197,043 22.73%
FY13 Recovery Rate By Portfolio Combined Program Recovery Rate
P&I Recoveries Recovery Rate
GA $34,502,742,432 $9,721,114,778 28.17%
ED $55,886,286,405 $10,629,996,256 19.02%
Combined $90,389,028,837 $20,351,111,034 22.52%
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Regular
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Regular
FY14 FY13 FY12
GA $659,831,565 $759,645,000 $754,654,568
ED $611,186,860 $562,750,765 $539,983,209
Combined $1,271,018,425 $1,322,395,765 $1,294,637,777
TOP
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TOP
FY14 FY13 FY12
GA $800,957,923 $848,556,209 $990,651,634
ED $1,300,561,456 $1,331,685,591 $555,242,177
Combined $2,131,519,379 $2,180,241,800 $1,545,893,811
Rehabilitations
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Rehabilitations
FY14 FY13 FY12
GA $5,232,338,236 $4,736,266,045 $4,400,196,618
ED $7,383,519,787 $5,758,179,306 $1,761,800,453
Combined $12,615,858,023 $10,494,445,351 $6,161,997,071
AWG
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AWG
FY14 FY13 FY12
GA $665,888,004 $655,890,260 $668,323,580
ED $558,532,023 $291,422,130 $345,010,734
Combined $1,224,420,026 $947,312,390 $1,013,334,314
Direct Consolidations
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Regular
FY14 FY13 FY12
GA $2,362,099,050 $2,711,129,883 $2,584,213,293
ED $746,196,131 $567,475,161 $474,247,061
Combined $3,108,295,181 $3,278,605,045 $3,058,460,354
FY14 GA Consolidations
Highest percentage was 34.84%Lowest percentage was 10.60%
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Consolidations Total Collections % of Total $2,362,099,050 $9,721,114,778
24.30%
FY14 Top Ten Consolidators
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Rank AgencyConsolidation
Collections Total Collections Percent1 VERMONT 8,377,493 24,048,014 34.84%2 MISSOURI 35,392,859 103,599,498 34.16%3 PENNSYLVANIA 330,067,127 976,591,712 33.80%4 NSLP (NEB) 112,837,907 335,207,453 33.66%5 NORTH CAROLINA 14,046,710 41,785,790 33.62%6 SOUTH CAROLINA 22,929,424 68,425,667 33.51%7 NORTH DAKOTA 2,457,924 7,448,445 33.00%8 MASS (ASA) 330,104,832 1,005,222,247 32.84%9 ECMC (VA) 500,842,026 1,825,526,288 27.44%10 TENNESSEE 33,293,776 121,651,842 27.37%
Collection PerformanceCPCS #13-19 Avg. - Unrestricted
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Collection PerformanceQuarterly CPCS #13-19Avg. – Small Business
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60.99%37.81%
0.30%0.82%
0.07%Inventory
DirectFFELFISLPerkinsOther
Portfolio Characteristics
September 2013• Size: $55,886,286,405
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Portfolio Characteristics
September 2014• Size: $65,961,695,813
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61.29%
37.73%
0.25% 0.67%0.06%
Direct
FFEL
FISL
Perkins
Other
Inventory
Collections 3-Year Forecast
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2014 2015 2016 2017
Inventory $55.B $65.B $76.5B $88.5B
Collections $10.6B $12.5B $13.9B $15B
Treasury Offset Program PY2014 P&I Certified
GA $23,673,661,746
ED $29,951,216,165
Total $53,624,877,911
• ED Collections - $1,331,685,591
• GA Collections - $ 848,556,209
• Total - $2,180,241,800
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Treasury Offset Program
• Certification processing is on schedule• Cindy sent the Action Code e-mail• GA Certification files are due 11/3 -11/7• Inactivation file will be processed on 11/12/2014• Certification files are sent to Treasury on 12/8/2014
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Consolidations
• Used be one Consolidation Servicer• Now we have multiple and we have to keep the
consolidation even across them• New forms were created but not really relate to the
change• The new process use a web application• We created a new contract to support the web
application
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Consolidations
• The Default process as well as the GA process uses a schedule for who to send your consolidations to
• Issue in the beginning that we believe are now fixed
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Rehab Processing
• Started the IBR R&A process in July 2012• Basic rules were get the information over the
phone to complete the IBR calculator and document the values on the borrower’s account
• In March 2013 we create some new rules• Require either Tax information or an ADOI form to
validate information from the phone
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Rehab Processing
• July 1, 2014 implemented the new regulations• Require documentation and supporting
documentation for ADOI form• Require a rehab agreement from all borrowers• PCA are not supposed to set up a rehab until all
documentation is received and imaged into the borrower’s account
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Rehab Processing
• Numbers from FY 2014• 338,370 borrowers through regular rehab process• 5932 Borrowers through BSR process• 671 Borrowers through both• 343,631 Unique borrowers rehabbed (an average of
28.6k per month)• Our average prior to the FY 2012 change was under
10,000 borrowers per month
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Rehab Processing Numbers*• 91% of borrowers are using the 15% rule leaving 9%
using the Financial Information Statement (FIS)• 6% of the rehab borrowers are in or were recently
in an AWG• The average rehab payment amount is $48.13
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* - Based on sampling of 3,559 borrowers
Department Purchasing GA Rehabs - Requirements• Notice of Intent Form Submission• Plan to use the deal IDs and the EA27/EA80 for file
transfer processing• The GA will also send a Bill of Fees
• File must be transferred to Servicer 4 business days prior to date of transfer
• The Servicer will do standard loan edits• The Servicer creates a Loan Detail Schedule and
reconcile to the GA Bill of Fees
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Department Purchasing GA Rehabs - Requirements• The Servicer will send the Loan Detail Schedule to
the GA and FSA CFO• GA will send necessary collateral one business day
prior to the transfer date• The Servicer will perform collateral review• The Servicer will report to NSLDS
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IRS Skip Tracing
• We have a signed CMA• We have to make system changes in order to use
the CMA• Currently scheduled for February 2016
• There will be audits from the IRS on this process• New Training must be done for all staff that
includes IRS FTI (Federal Tax Information) requirements
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IRS Skip Tracing
• Neither ED nor its Contractors (PCA or GA) may re-disclose the IRS Address unless legal parameters in the Internal Revenue Code (IRC) (section 6103) are followed, which are in addition to those required by the Privacy Act!
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NDNH Match
• A working draft document is now being reviewed• We believe the IRS process will also be a part of this
match• This is also scheduled for February 2016
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DMCS O&M Contract
• Transition date was 8/1/2014• First monthly release was a complete success• There are 8 Quarter releases that start with
11/2014 and go through 8/2016• There are monthly release that will fix outstanding
issues
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DMCS O&M Contract
• Release Themes and Dates:• 11/14 – Rehab and Suspense• 2/15 – Loan Exchange, Transaction Processing• 5/15 – PCA, Refunds• 8/15 – TOP, Bankruptcy, Finance• 11/15 – AWG, NSLDS• 2/16 – Images, Interfaces, Compromise• 5/16 – Notices, Consolidation, DOJ• 8/16 – Cleanups, PCA Invoicing, Web
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DMCS O&M Contract
• How does this affect the GAs?• No changes today• There will be a transition of the data center at some
future point
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PCA Contracts
• Eleven Small Business Awards were made in October
• Three were incumbents• Current time frame for their first release of
borrower is August 2015• Unrestricted Procurement is still on-going
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Questions?
Department of Education Regulatory Update
NCHER Knowledge Symposium
Nathan ArnoldU.S. Department of Education
November 3, 2014
Gainful Employment
Issue renegotiated following District Court ruling in 2012
Three negotiations: Sept. 9 -11, Nov. 18 -20, Dec. 13, 2013
Consensus not reached NPRM published on March 25, 2014 Final rule published October 31, 2014 Effective July 1, 2015
Gainful Employment• Covers all programs at proprietary institutions
and non-degree programs at other institutions• Debt to earnings metrics: passing is 8% of
annual income, 20% of discretionary income• Establishes three levels of compliance: passing,
zone, and failing• Eligibility not affected by program cohort default
rate metric proposed in NPRM• Program ineligible if it fails 2 of 3 consecutive
years or is in zone 4 consecutive years• Disclosures on costs, earnings, debt, completion
Violence Against Women Act Violence Against Women Act reauthorized
March 7, 2013 Made changes to Clery Act institutional reporting
requirements
Three Negotiations: Jan. 13 – 14, Feb. 24 – 25, March 31 – April 1,
2014
Consensus reached NPRM published June 20, 2014 Final rule published October 20, 2014 Effective July 1, 2015
Violence Against Women Act
• Requires institutions to:– Maintain statistics on dating violence, domestic violence,
sexual assault, and stalking– Provide, and describe in annual security reports,
prevention and awareness campaigns– Provide a prompt, fair, and impartial disciplinary
proceeding, and provides for requirements governing that proceeding
– Provide information and support services to victims
Program Integrity and Improvement Four negotiations:
Feb. 19 - 21, March 26 - 28, April 23 – 25, May 19 – 20, 2014
Cash management State authorization of distance education programs State authorization of foreign locations of domestic
institutions Definition of PLUS adverse credit history Repeat coursework Clock-to-credit hour conversion
Tentative agreement reached on some issues, but overall consensus not reached
Program Integrity and Improvement• Definition of PLUS adverse credit history
• NPRM published on August 8, 2014• Final rule published October 23, 2014• Effective July 1, 2015, ED will implement early
– Revised definitions and amounts apply to both Parent PLUS and Grad PLUS loans
– Revised adverse credit definition• If the applicant has one or more debts with combined outstanding balance
greater than $2,085 that is: (1) 90 or more days delinquent or (2) Placed in collection or charged off during previous two years of credit report
– $2,085 can be increased by ED based on CPI if the change would be ≥ $100
– Borrowers with extenuating circumstances or endorser must complete counseling
Teacher Preparation
• Teacher Preparation Negotiated Rulemaking Committee– Negotiations were held in November 2012– Consensus not reached– NPRM currently under review at OMB– Except for the Teach Grant component, these
proposed regulations are not subject to the Master Calendar requirements
Pay As You Earn Expansion– Federal Register Notice published Sept. 3, 2014– We propose to develop regulations that:
Allow more student Direct Loan borrowers to qualify for PAYE
Target the new PAYE option to borrowers who would otherwise struggle to repay their student loans
– Interested parties may suggest additional issues for consideration at two hearings or in writing: Washington, D.C. (Oct. 23, 2014) Anaheim, California (Nov. 4, 2014) Written suggestions must be received by Nov. 4,
2014; see notice on regulations.gov for instructions
Pay As You Earn Expansion
• Planned Negotiated Rulemaking on Expansion of PAYE Repayment plan– Negotiating sessions would begin Feb.
2015: Three sessions Approximately 3 days each At roughly monthly intervals
Other Regulatory Activity• Loans II Package
– Loan rehabilitation, updates/consolidation of FFELP and Direct Loan regulations, AWG, closed school discharge
– Final rule published November 1, 2013
• 150% Direct Subsidized Loan Limit– Limits receipt of Direct subsidized loans to 1.5X the length
of borrower’s currently enrolled program– Loss of eligibility and interest subsidy after reaching limit– Affects new borrowers on/after July 1, 2013– Final rule published January 17, 2014– Exempt from negotiated rulemaking and master calendar
SCRA Dear Colleague Letter• Improved Administration of the Servicemembers
Civil Relief Act for Direct Loan and FFEL Borrowers (GEN-14-16), published August 25, 2014– Result of work with DOJ to simplify process for loan holders
to confirm eligibility for benefits §527 of the SCRA– FFEL lenders authorized to use DOD’s DMDC database– Military orders and borrower request no longer required– Lenders/servicers using DMDC to grant the interest rate
limitation not subject to program liabilities if DMDC is found to be incorrect
– Independent confirmation of DMDC information (i.e. military orders) not required, but DMDC information must be retained in borrower’s file
ED Servicing Summit• One-day session on servicing is to explore various
topics of interest to student borrowers, consumer advocates, financial aid administrators, and policy makers
• Town hall meeting with Undersecretary Mitchell, break-out discussion sessions
Monday, December 1, 2014
8:30 A.M. – 5:00 P.M. (ET)
Omni Hotel at CNN Center, Atlanta• Registration:
fsaconferences.ed.gov/servicingsummit.html
CONTACT INFORMATION
Nathan ArnoldOffice of Postsecondary Education
202-219-7134
Pam MoranOffice of Postsecondary Education
202-502-7732
Ombudsman GroupFY 2014 Activities Summary
November 3, 2014NCHER Knowledge Symposium
Customer ExperienceU.S. Department of Education
Highlights of FY 2014
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• Received 300,000th (all-time) customer contact
• Received total of 38,665 contacts in FY 2014
• Published blog post in collaboration with NCHER SL Ombudsman Caucus
• Awarded contract and began transition to new call center and case management support
NCHER Knowledge Symposium – November 2014
FY 2014 Contact Volumes
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• 80% of requests from customers resolved in first/initial contact
• Top 5 Overall:• FSA Assistance – 7051• Account Balance – 6437• Repayment Plans/Amounts – 4551• Loan Cancellation/Discharge – 3691• Default -- 3462
• Credit Reporting issues were the basis for 1953 contacts
NCHER Knowledge Symposium – November 2014
FY 2014 Case Outcomes – Research Cases
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• 38.1% of cases received and closed during the year resulted in “Confirmation”• Highest proportion: Bankruptcy (59.2%)
• 32% resulted in “Action”• Highest proportion: NSLDS (74.9%)
• 18.4% resulted in “Information”• Highest proportion: Wage Garnishment (31.9%)
NCHER Knowledge Symposium – November 2014
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Other Activities in FY 2014
• 1191 customers reported being referred from CFPB; 467 referred to CFPB
• Hosted four conference calls with student loan borrower interest groups
• Implemented a new customer survey using American Customer Satisfaction Institute (ACSI) methodology (September)
NCHER Knowledge Symposium – November 2014
Thank you!
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Joyce DeMoss, Ombudsman [email protected] 202-377-3992
Questions?
NCHER Knowledge Symposium – November 2014