Table F: Servicers-The Parties Involved: Keeping Everyone Informed

Table F: Servicers — The Parties Involved: Keeping Everyone Informed

Student Aid Partner # SDI Recommendations What happened?

Schools 1   More dynamic preloan and debt counseling to include audiovisual and other types of instructional tools. Mapping Your Future web site and publication of past videos are some of the collaborative efforts by industry participants.

2
Update references every semester to facilitate skip tracing.
Not adopted.

3
Improve the timeliness of reporting out-of-school status to lenders.
Must report within 60 days.

Lenders
1
Notification to school/borrower when a loan is sold or transferred to a servicer.
The 1992 Higher Education Amendments require lenders to contact borrowers if their loan(s) are sold or transferred to a servicer, in certain cases.

2
Provide more contact to the borrower.
More information is needed.

3
Timely response to borrowers concerning deferment requests.
Regulations-A lender must reply to a borrower request within 30 days of that request.

Guaranty Agency
1
Contact school before defaulted loan is turned over to the Feds.
Preclaim information is sent to school.

2
Make TG Request for Assistance report a part of required reporting to schools.
Preclaim information is sent to school.

3
Provide electronic transfer of information.
TG makes this available.

4
Provide multicopy forms.
TG provides forms to the industry that can easily be photocopied or completed electronically.

Legislative
1
Relax eligibility for GSL. Make more students eligible and prorate government subsidy rate for less needy students.
Unsubsidized program offers eligibility to students who were not previously eligible. 1992 Reauthorization excluded family homes as assets in the need analysis thereby increasing loan amounts to more families.

2
Establish student loan debt as a separate category of debt with its own rules.
In July 1993, legislation indirectly addressed how student loan debt was examined by requiring lenders to offer SLS and Stafford loan borrowers graduated or income-sensitive repayment options.

3
Require minimum monthly payments while in school - tie it to funding of national database.
Not adopted.

4
Allow open access to government records to facilitate skip-tracing and ultimately collection.
State agencies fall under the Open Records Act.

5
Commensurate state recourse and collection practices of delinquent/defaulted loan borrowers to the federal government with similar default types such as income tax. Subsidy is viewed to be same as if funds were directly advanced by federal government.
The State Comptroller’s Office holds all state checks made out to borrowers with a defaulted student loan.

6
Require repeat borrowers to use the same lender.
Some guarantors do this, but it restricts student choice.

Table F: Servicers — The Parties Involved: Keeping Everyone Informed
Student Aid Partner	#	SDI Recommendations	What happened?

Schools	1	More dynamic preloan and debt counseling to include audiovisual and other types of instructional tools.	Mapping Your Future web site and publication of past videos are some of the collaborative efforts by industry participants.
	2	Update references every semester to facilitate skip tracing.	Not adopted.
	3	Improve the timeliness of reporting out-of-school status to lenders.	Must report within 60 days.
Lenders	1	Notification to school/borrower when a loan is sold or transferred to a servicer.	The 1992 Higher Education Amendments require lenders to contact borrowers if their loan(s) are sold or transferred to a servicer, in certain cases.
	2	Provide more contact to the borrower.	More information is needed.
	3	Timely response to borrowers concerning deferment requests.	Regulations-A lender must reply to a borrower request within 30 days of that request.
Guaranty Agency	1	Contact school before defaulted loan is turned over to the Feds.	Preclaim information is sent to school.
	2	Make TG Request for Assistance report a part of required reporting to schools.	Preclaim information is sent to school.
	3	Provide electronic transfer of information.	TG makes this available.
	4	Provide multicopy forms.	TG provides forms to the industry that can easily be photocopied or completed electronically.
Legislative	1	Relax eligibility for GSL. Make more students eligible and prorate government subsidy rate for less needy students.	Unsubsidized program offers eligibility to students who were not previously eligible. 1992 Reauthorization excluded family homes as assets in the need analysis thereby increasing loan amounts to more families.
	2	Establish student loan debt as a separate category of debt with its own rules.	In July 1993, legislation indirectly addressed how student loan debt was examined by requiring lenders to offer SLS and Stafford loan borrowers graduated or income-sensitive repayment options.
	3	Require minimum monthly payments while in school - tie it to funding of national database.	Not adopted.
	4	Allow open access to government records to facilitate skip-tracing and ultimately collection.	State agencies fall under the Open Records Act.
	5	Commensurate state recourse and collection practices of delinquent/defaulted loan borrowers to the federal government with similar default types such as income tax. Subsidy is viewed to be same as if funds were directly advanced by federal government.	The State Comptroller’s Office holds all state checks made out to borrowers with a defaulted student loan.
	6	Require repeat borrowers to use the same lender.	Some guarantors do this, but it restricts student choice.