A Day in the Life

A Day in the Life of Compliance Administrative Operations

with James Wingard, Assistant Vice President and John Seibert, Assistant Team Manager

Ensuring Program Integrity
TG's Compliance Administrative Operations (CAO) team provides a variety of customer and borrower services that help to protect the integrity of the FFELP. The CAO team divides its services between maintaining ongoing program participation for schools and lenders/servicers, and due process services for borrowers. Due process services ensure that the borrowers' rights under Title IV of the Higher Education Act are preserved and protected.

Initial Program Participation
The CAO team handles the initial program participation eligibility processes for schools and lenders wanting to participate in the FFELP with TG. The team collects and reviews the information needed to determine that a school or lender meets the requirements for TG program participation, including documentation of ED's approval of schools that want to participate in the Title IV programs. Once eligibility with TG is established, the Compliance team is responsible for updating schools' and lenders' records and notifying other TG departments of the updates.

Cohort Default Rate Data Challenges
The CAO team also handles cohort default rate challenges for schools. ED calculates schools' cohort default rates to determine the default experience of students who attended a particular school during a particular period of time based on information reported by guarantors to the National Student Loan Data System (NSLDS). Cohort default rates are important to schools since high rates may affect their participation in the FFELP.

Each February, schools receive their draft cohort default rates from ED. Schools that disagree with ED's calculations may challenge those findings through their guarantor. The CAO team reviews the data TG reported to the NSLDS and, when applicable, makes corrections before official cohort default rates are released by ED in September. Appeals regarding official rates that are based on erroneous data and/or improper loan servicing must be submitted to TG within specific time frames to provide schools with continued eligibility while appeals are pending. Appeals for exceptional mitigating circumstances must be submitted by schools directly to ED.

Borrower Intermediary
To provide the best possible service to borrowers and customers, CAO team members need to have good people skills and a solid background in the student loan industry. Having these skills and experience enables CAO team members to serve as an intermediary between the borrower and the school or lender when the borrower has loan related issues.

James Wingard, Assistant Vice President of TG Compliance Administrative Operations, says, "Generally, the types of borrowers we work with have issues with the servicing of their loan, the school that they attended, or the collections process, so our team members need an overall knowledge of the loan process, especially in the areas of wage withholding, claims and collections."

The CAO team is responsible for borrower due process activities that include:

• Claims Administrative Review Process,
• Wage withholding hearings,
• Treasury offset objections,
• False Certification and Unpaid Refund discharges, and
• Borrower identifier discrepancies and complaints.

Claims Administrative Review Process
When TG pays a default claim, the borrower is notified that he or she has the opportunity to object to the default and is sent a Request for Administrative Review form (Request). The CAO team's receipt of a Request triggers a process known as the Claims Administrative Review Process (CARP). The team examines the borrower's objections, and then notifies the borrower of its determination. If the determination is in the borrower's favor, the lender is asked to repurchase the borrower's loan. If the determination is not in the borrower's favor, the borrower has the opportunity to submit a written appeal to TG.

John Seibert, Assistant Team Manager of CAO, explains, "If that appeal is rejected and the borrower continues to have a problem with the decision, the appeal is forwarded to the TG Ombudsman."

Wage Withholding Hearings
When TG Collections notifies a borrower of a wage withholding action, the borrower has an opportunity to request a hearing overseen by an Administrative Law Judge. A representative from the Compliance team is present at the hearing as a corporate advocate and is charged with the job of presenting the facts of the case. The borrower has the right, under federal mandate, to object to the existence or amount of the debt, or the terms of the repayment schedule. However, TG will often grant the borrower a hearing for reasons other than those mandated by law to give TG and the borrower an opportunity to discuss any applicable issues and possibly put them to rest. If an adverse determination is made by the Administrative Law Judge, a borrower may appeal to TG.

James says, "Our goal in the hearing is to get the borrower into voluntary repayment without having to go through the wage withholding process."

Treasury Offset Objections
A borrower has the right to request a review when he or she is notified by TG of its intent to offset the borrower's student loan debt using the borrower's federal payments, including income tax refunds, that TG intercepts from the U.S. Treasury. A borrower is given 65 days to make repayment arrangements or to provide TG with a valid objection before the borrower's account becomes certified as eligible for the offset.

The CAO team reviews borrower objections and makes a determination on whether the borrower's account is eligible for offset. Unless the borrower has a valid objection, the borrower's loan is subject to offset until the loan is paid in full. If a borrower's objection is denied, the borrower may appeal. The request for appeal is sent to TG, which then forwards the request with a response to ED.

Discharge Processes
The CAO team reviews and processes borrowers' requests for two types of loan discharge-false certification and unpaid refund. A loan discharge is a release of a borrower's obligation to repay his or her loan, either in whole or in part. A false certification discharge occurs when one of the following conditions exists:

• Ability to Benefit—At the time of enrollment, the borrower did not have a high school diploma or a General Education Diploma (GED), and was unable to benefit from the training offered by the borrower's school.
• Disqualifying Status—The borrower could not benefit from the training because the borrower had a condition at the time of the training that would prevent the borrower from using the training once it was complete.
• Unauthorized Signature—A school official signed the borrower's name on the promissory note or endorsed the check on the borrower's behalf and the borrower did not receive the benefit of the loan proceeds.

If the borrower's false certification discharge is denied, the borrower may appeal TG's determination to ED. The request for appeal is sent to TG, which then forwards the request with a response to ED.

An unpaid refund discharge occurs if the borrower did not attend, withdrew from, or was terminated from school and is owed a refund of Title IV funds. The borrower can submit an application for an unpaid refund discharge for the Compliance team's review, and if it is determined that the borrower did not receive a refund to which he or she was entitled, then that portion of the loan that was attributable to the refund is discharged. If the discharge is denied, the borrower may appeal directly to CAO.

Resolving Borrower and Customer Issues
The Compliance team is also responsible for coordinating changes to borrower data. It is important that the CAO team accurately collects and records borrower's identification data such as name, data of birth, and Social Security number to prevent the occurrence of fraud and ineligible guarantees, and to prevent collection activities from being directed at non-borrowers. The CAO team receives notification of borrower identifier discrepancies from borrowers, customers, ED, other guarantors, or from other areas within TG. The team researches the discrepancy and, after acquiring relevant documentation, makes the change on TG's mainframe.

The CAO team works closely with the TG NSLDS team to reduce the amount of borrower information that is in conflict with data in the NSLDS database. If data submitted by TG is rejected by the NSLDS database because not all of the borrower's information matches, the team researches the conflicting data to determine if TG's information is correct or in error and then takes appropriate action to correct the discrepancy. If TG's information is correct, the CAO team contacts the guarantor that reported the conflicting information and requests that the guarantor make the necessary corrections. These efforts are important, especially since schools rely on information reported by the NSLDS to determine borrower eligibility and monitor default rates.

The Compliance team also deals with complaints about program violations. Complaints come from borrowers, schools, lenders, or others within the industry and within TG. The team researches the validity of the complaint and then processes the response, working with borrowers and customers to resolve the issues. If a borrower submits a complaint and the Compliance team can not resolve it to the borrower's satisfaction, the complaint is forwarded to the TG Ombudsman.

Working Together
In keeping with TG's internal teamwork environment, the CAO team works closely with:

• Collections' Legal Portfolio unit during wage withholding hearings.
• Loan Guarantee Operations in response to programmatic complaints and data discrepancies.
• The NSLDS team when data errors occur on NSLDS.
• Claims when issues arise with cohort default rate reviews, discharge processing, and servicer history.
• The TG Ombudsman when appeals are requested or complaints are unresolved.
• Strategic Partnerships and Customer Service in receiving referrals for school and lender program participation.
• Policy and Regulatory Affairs when policy guidance is needed.

The CAO team also works closely with ED, providing feedback on proposed rules and industry forms that are up for review, and exchanging information on false certification and unpaid refunds. James is also active in the administrative wage garnishment sub-committee for the NCHELP Debt Management committee. TG communicates regularly with the Texas Workforce Commission and other accrediting agencies regarding school closures.

James says, "We truly try to work with our customers and borrowers to come to the best solution for everybody, regardless of the issues."

For Additional Information
The CAO team works to ensure that TG's borrowers receive fair and equitable due process in the servicing of their loans and that school and lender program participation eligibility is handled timely and professionally. To contact the team concerning borrower due process services and lender and school oversight and eligibility issues, call (800) 252-9743 and ask to speak to a Compliance Administrative Operations representative.

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