Go with the flows abbreviated version

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Internal training presentation for new call-center hires; learning-style emphasis is on fun. Unfortunately, the accompanying sound files don't seem to be allowed on this site. :-(

Internal training presentation for new call-center hires; learning-style emphasis is on fun. Unfortunately, the accompanying sound files don't seem to be allowed on this site. :-(

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  • 1. Go With The Flows
        • Identifying the Right Process Flow
    Input Start End Decision A Question? Decision B
  • 2. Agenda
    • What do Guarantors, Lenders and Servicers do?
    • What does “Full Service” mean?
    • What does “originate” mean?
    • Who initiates the process?
    • What’s the difference between Lender Flow and Guarantor Flow?
    • Which process is best for a school?
  • 3. Who are the Players?
    • Guarantor :
    • A state or private nonprofit organization that has an agreement with the U.S. Secretary of Education to administer a loan guarantee program under the Higher Education Act.
    •  Basically, a guarantor guarantees (a.k.a. “insures”) the loan in case of default
    • Lender :
    • A national or state chartered bank, mutual savings bank, savings and loan association, stock savings bank, or credit union…
    •  Basically, a lender lends the funds for the loan
    • Servicer :
    • An entity that enters into a contract with a program participant to administer any aspect of its participation in a Title IV program.
    •  Basically, a servicer oversees the repayment of the loan by the borrower
  • 4. Definitions:
    • Process Flow:
    • The process by which a loan goes from certification to disbursement; the path a loan follows from beginning to end.
    • Origination :
    • The process of collecting a school certification, obtaining a signed promissory note, ensuring completion of the application, and disbursing the funds.
    • Disbursement :
    • The process of delivering funds to a school, either directly or via a 3 rd party disbursing agent.
  • 5. Definitions (Cont’d):
    • School-Initiated Process:
    • The school kick-starts the whole process by sending a certification file to the originator (like ASA, for example).
    • Borrower-Initiated Process:
    • The borrower kick-starts everything by going directly to an entity (like ASA) other than the school and completing the MPN / loan application on-line or over the phone.
  • 6. Definitions (Cont’d)
    • Lender Flow :
    • Loan data is first sent to the lender. The lender will originate the loans and also disburse the funds to the school, obtaining a guarantee from the guarantor(s).
    • Guarantor Flow :
    • Loan data is first sent to the guarantor. The guarantor will originate the loans, guarantee the loans, and disburse the funds to the school, obtaining those funds from the lender(s).
  • 7. Lender Flow (School Initiated)
    • Process for School Initiated Lender Flow:
    • School Certifies Loan; sends Certification file to Lenders
    • Lenders request guarantee from Guarantor
    • Guarantor guarantees the loan; sends to Lenders
    • Lenders request signed MPN for new borrowers (either on paper MPN or electronically)
    • New students sign MPN, return to Lenders
    • Lenders disburse funds to School (either directly or via a 3 rd party disbursement agent, such as the NDN)
  • 8. Lender Flow (School Initiated) School sends certification file to the Lender 1 2 Lender receives the certification and then contacts borrower with requests to complete an MPN 3 Borrower completes. signs & returns the MPN to the Lender 6 Lender disburses funds to school Lender requests guarantee from ASA 4 5 Lender receives guarantee back from ASA
  • 9. Lender Flow (Borrower Initiated)
    • Process for Borrower Initiated Lender Flow :
    • Borrower applies for loan with Lender; signs MPN (either on printed paper MPN or electronically)
    • Lenders request School Certification
    • School Certifies Loan; sends Certification File to Lenders
    • Lenders request guarantee from Guarantor
    • Guarantor guarantees loans; sends to Lenders
    • Lender sends funds to School (either directly or via a 3 rd party disbursement agent, such as the NDN)
  • 10. Lender Flow (Borrower Initiated) 1 2 Lender receives application from the borrower and then sends request to school for certification 3 School receives Lender’s request and sends back certification Lender requests guarantee from ASA 6 4 Lender disburses funds to the school Borrower applies for college loan thru Lender 5 Lender receives guarantee back from ASA
  • 11. Guarantor Flow (School Initiated)
    • Process for School Initiated Guarantor Flow 1:
    • School Certifies Loan; sends Certification file to Guarantor
    • Guarantor guarantees the loan
    • Guarantor requests signed MPN for new borrowers (either on paper MPN or electronically)
    • New students sign MPN, return to Guarantor
    • Guarantor obtains funds from Lender(s)
    • Guarantor disburses consolidated funds to School (either directly or via a 3 rd party disbursement agent, such as the NDN)
  • 12. Guarantor Flow (School Initiated) School sends certification file to Guarantor (ASA) 1 2 ASA receives the certification and then contacts borrower with requests to complete an MPN 3 Borrower completes. signs & returns the MPN to ASA ASA obtains the funds from the lender 5 4 ASA disburses funds to school
  • 13. Guarantor Flow (Borrower Initiated)
    • Process for Borrower Initiated Guarantor Flow:
    • Borrower applies for loan with Guarantor; signs MPN (either on paper MPN or electronically)
    • Guarantor requests School Certification
    • School Certifies Loan; sends Certification File to Guarantor
    • Guarantor guarantees loan
    • Guarantor obtains funds from Lender(s)
    • Guarantor sends funds to School (either directly or via a 3 rd party disbursement agent, such as the NDN)
  • 14. Guarantor Flow (Borrower Initiated) 1 2 ASA receives application from the borrower and then sends request to school for certification 3 School receives ASA’s request and sends in certification ASA obtains the funds from the lender 5 4 ASA disburses funds to the school Borrower applies for college loan thru ASA
  • 15. Which Process is Right for a School?
  • 16. Factors to Consider:
    • Loan Delivery, FAM Systems, Proprietary Systems
    • Number of Players
    • Number of Steps Involved
    • Number of Points of Contact
    • Lender / Guarantor Benefits
    • Relationship
    • Partner capabilities
    • Split Processing
  • 17.
    • Q U I Z T I M E !
    N A M E T H A T F L O W !
  • 18. Guarantor Flow (School Initiated) School sends certification file to Guarantor (ASA) 1 2 ASA receives the certification and then contacts borrower with request to complete an MPN 3 Borrower completes. signs & returns the MPN to ASA ASA obtains the funds from the lender 5 4 ASA disburses funds to school
  • 19.
    • LIGHTNING ROUND !
    F I L L T H E S Q U A R E S ! I N
  • 20. Lender Flow -School Initiated 1 2 Lender receives certification from the school and then contacts borrower with request to complete an MPN 3 Lender requests guarantee from ASA 6 4 Lender disburses funds to the school 5 ASA receives guarantee-request file and responds back to the lender with guarantee affirmed School sends certification file to Lender Borrower completes. signs & returns the MPN to Lender
  • 21.
    • BONUS ROUND !
    T R U E O R F A L S E !
  • 22. TRUE or FALSE: In a Guarantor-flow process , loan data (a.k.a ‘certification file’) from the school is first sent to the lender. In a Guarantor-flow process , loan data from the school is first sent to the guarantor. F A L S E
  • 23.
    • THANKS FOR PLAYING . . . .
    N A M E T H A T F L O W ! A FRANCK ‘n FEROCE production Meg Franck - Executive Director Jeff Feroce - Executive Producer ASA Studios - Boston, MA
  • 24. Questions?
  • 25. American Student Assistance ® 100 Cambridge Street, Suite 1600 Boston, MA 02114 (800) 999-9080 (617) 728-4265 F A X (800) 999-0923 T D D www.amsa.com