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Student Lending
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Student Lending Student Lending Presentation Transcript

  • Student Lending: Optimizing the Online Application Heidi Kovalick Associate Director, Student Lending Higher Education Student Assistance Authority November 10, 2011
  • What is NJCLASS?• State statutory supplemental loan program created in 1991 for NJ residents and non- residents attending NJ colleges• Funded through the sale of tax-exempt municipal bonds• Independent State Authority• Competitive environment of private education loans• Approve 28,000 applications, $350M, per year
  • In The Beginning…• Online application and credit decision, with print to sign requirements• Up to 5 signatures on the Credit App, 4 on the Pnote + 2 underwriter signatures• #1 customer error: missing/incorrect signatures• #1 staff error: lost/misfiled documents
  • Application Process• Secure Online Loan Approval Disbursement Application • Data file of Loan• All parties view TILA Elements sent to application • Underwriting staff reviews documents Trustee’s Document disclosure Custody • TILA Predisb and security edits Disclosure mailed to• Borrower completes • Promissory Notes TILA Self-Cert • School certifies all parties 15 days student’s eligibility sent to Doc Custody prior• Credit decision is • Doc Custody review presented • TILA Loan Offer • Disb file sent to Disclosure is and acceptance of Trustee• All Parties Sign & mailed to all Notes submit App &P- • File is compared to parties, and Doc Custody on Note available on web hand • Borrower accepts • Disbursements sent TILA Loan Offer Document to schools Application Custody
  • The Challenge • A paper process with 11 max signatures • 28,000 apps/year • 9 FTEs + 4 temps • Overtime, including Saturdays • Customer complaints • Lost volume due to processing timeframes • Space constraints
  • By the numbers… 1,950 applications per week 2 Full-time credit reviewers 24-hour turnaround expected ≈ 28 applications must be reviewed per hour 2.15 minutes to review each application
  • Why eSign?• Competition in the student loan market• Customer expectationsHOW?• Cost analysis• Risk analysis• Product demonstrations• Reference checks
  • Requirements• Meet the federal eSign Act• Meet federal and state UETA• Ensure nonrepudiation –enforceability of Note• Ability to transfer Notes to Trustee• Ease of use• Customizable across our product lines
  • Meet the Resistors…• Paper Tigers- – Paper degrades, these are 30-year Notes – Storage costs – Ink signatures are not proof of authenticity• Alarmists- – Authentication – Attribution – Playback – Reference checks – Familial fraud cannot be prevented with an ink signature
  • Benefits• Protection of PII – No more file folders moving around the office• Reduced Labor Costs – Eliminated all overtime and the need for temp staff• Improved Employee Satisfaction – Staff could have vacation during summer peak – Got to work with new technology• Improved Customer Service – From 15 business days → 24 hours (or less!)• Space Reclamation – No more filing cabinets
  • Pleasant Surprises…• Adoption Rate – From 0 → 99.9% in one day – 335 apps first day, 2 print to sign• Amount of internal benefit we realized• How quickly the resistors fell in love – Process Replayer
  • Challenges• Technology – involve the right staff – Server-based v. Mainframe DB2 – Clustered servers – Security certificates – Performance tuning & stress test (not yours!)• Operational – Need to manually transfer Notes to our Trustee – Staff Training
  • A Word of Advice• Allow enough time for development, testing, and training• Get the legal advisor(s) involved early• Expect the unexpected• Build the right team – Business subject matter experts – Technology group – Legal and compliance
  • Questions? Call, click, or email Heidi Kovalick www.hesaa.orghkovalick@hesaa.org 609-588-3220