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Federal Loan Servicing. Brenda Cox, UHEAA/Cornerstone Wanda Hall, Edfinancial Matt Stover, Nelnet. Federal Loan Servicers. Aspire Resources Inc. CornerStone ESA/ Edfinancial FedLoan Servicing (PHEAA) Granite State – GSMR Great Lakes Educational Loan Services, Inc. MOHELA - PowerPoint PPT Presentation

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Federal Loan ServicingBrenda Cox, UHEAA/CornerstoneWanda Hall, EdfinancialMatt Stover, NelnetFederal Loan ServicersAspire Resources Inc.CornerStoneESA/EdfinancialFedLoan Servicing (PHEAA)Granite State GSMRGreat Lakes Educational Loan Services, Inc.MOHELANavient (formerly Sallie Mae)NelnetOSLA ServicingVSAC Federal Loans

Page 2Key EventsMarch 31st letter from the Department of Education to Senator HarkinEstablish Common Performance MetricsIncentive Based PricingProvide Not For Profit Servicers Additional VolumeMove Towards Comparable Portfolios Across Servicers

Page 3Key EventsJune 9th 2014 President Obama Delivers Speech on Student Loan DebtExpands the Pay As You Earn ProgramFocus on borrower satisfaction and repaymentNegotiated Rulemaking starts in early 2015 to expand Pay As You Earn

Page 4Metric ChangesContract changes incorporated into Title IV Additional Servicers (TIVAS) and Not For Profit Servicers (NFPs) servicing agreementsAll Federal servicers will be measured under a common set of performance metrics

Page 5OutreachThird-Party Debt Relief companies In grace period and owe more than $25KDelinquent borrowers 90-180 days delinquent181-270 days delinquentUndergraduate borrowers with higher-than-average debts> $50K and entered repayment prior year Borrowers in deferment and forbearance because of financial hardship or unemployment Page 6OutreachCampaign target outcome:Improve awareness of IDRIncrease application and adoption of IDR plansReduce borrower delinquency and defaultVisit repayment estimator toolApply for IDRContact servicer to apply for IDR80% of opened emails opened within 24 hoursNegligible after 36 hours

Page 7OutreachPreliminary Results90-180 days delinquent15.63% made a payment; 2.54% IDR181-270 days delinquent12.48% made a payment; 2.05% IDROwe $50+ and left school within 1 year36.73% made a payment; 9.41% IDRDeferment and forbearance34.61% changed to in repaymentGrace and owed more than $25K 12.94% IDRPage 8TrendsTotal outstanding student loan debt has more than doubled since 2007 by approximately 85%Outstanding student loan debt has shifted from FFEL to Direct Loans2007 DL 21%2014 DL 62%

2014 Release of FSA Data by IHEP

Page 9TrendsMajority of outstanding loans/borrowers are currently in repaymentGrace 5%Repayment 58%Deferment 14%Forbearance 13%Loan dollars in default 10%

In loan dollars

Page 10Trends 13% of borrowers enrolled in IDRStandard repayment 10 years or less: 61%Standard repayment more than 10 years: 9%Graduated more than 10 years: 2% Income-driven: 13%IBR 9%ICR 3%PAYE 1%Alternative: 2%Other: 3% By Borrower Page 11Trends 74% of Direct Loans in repayment are being repaidNearly of loan dollars not paid on-time are less than 91 days delinquentCurrent repayment 37%31-90 days delinquent 3%91-180 days delinquent 2%181-270 days delinquent 1%271-360 days delinquent 1%Transferring to DMC

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