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. :-(

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Go with the flows abbreviated version

  1. 1. Go With The Flows <ul><ul><ul><li>Identifying the Right Process Flow </li></ul></ul></ul>Input Start End Decision A Question? Decision B
  2. 2. Agenda <ul><li>What do Guarantors, Lenders and Servicers do? </li></ul><ul><li>What does “Full Service” mean? </li></ul><ul><li>What does “originate” mean? </li></ul><ul><li>Who initiates the process? </li></ul><ul><li>What’s the difference between Lender Flow and Guarantor Flow? </li></ul><ul><li>Which process is best for a school? </li></ul>
  3. 3. Who are the Players? <ul><li>Guarantor : </li></ul><ul><li>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. </li></ul><ul><li> Basically, a guarantor guarantees (a.k.a. “insures”) the loan in case of default </li></ul><ul><li>Lender : </li></ul><ul><li>A national or state chartered bank, mutual savings bank, savings and loan association, stock savings bank, or credit union… </li></ul><ul><li> Basically, a lender lends the funds for the loan </li></ul><ul><li>Servicer : </li></ul><ul><li>An entity that enters into a contract with a program participant to administer any aspect of its participation in a Title IV program. </li></ul><ul><li> Basically, a servicer oversees the repayment of the loan by the borrower </li></ul>
  4. 4. Definitions: <ul><li>Process Flow: </li></ul><ul><li>The process by which a loan goes from certification to disbursement; the path a loan follows from beginning to end. </li></ul><ul><li>Origination : </li></ul><ul><li>The process of collecting a school certification, obtaining a signed promissory note, ensuring completion of the application, and disbursing the funds. </li></ul><ul><li>Disbursement : </li></ul><ul><li>The process of delivering funds to a school, either directly or via a 3 rd party disbursing agent. </li></ul>
  5. 5. Definitions (Cont’d): <ul><li>School-Initiated Process: </li></ul><ul><li>The school kick-starts the whole process by sending a certification file to the originator (like ASA, for example). </li></ul><ul><li>Borrower-Initiated Process: </li></ul><ul><li>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. </li></ul>
  6. 6. Definitions (Cont’d) <ul><li>Lender Flow : </li></ul><ul><li>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). </li></ul><ul><li>Guarantor Flow : </li></ul><ul><li>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). </li></ul>
  7. 7. Lender Flow (School Initiated) <ul><li>Process for School Initiated Lender Flow: </li></ul><ul><li>School Certifies Loan; sends Certification file to Lenders </li></ul><ul><li>Lenders request guarantee from Guarantor </li></ul><ul><li>Guarantor guarantees the loan; sends to Lenders </li></ul><ul><li>Lenders request signed MPN for new borrowers (either on paper MPN or electronically) </li></ul><ul><li>New students sign MPN, return to Lenders </li></ul><ul><li>Lenders disburse funds to School (either directly or via a 3 rd party disbursement agent, such as the NDN) </li></ul>
  8. 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. 9. Lender Flow (Borrower Initiated) <ul><li>Process for Borrower Initiated Lender Flow : </li></ul><ul><li>Borrower applies for loan with Lender; signs MPN (either on printed paper MPN or electronically) </li></ul><ul><li>Lenders request School Certification </li></ul><ul><li>School Certifies Loan; sends Certification File to Lenders </li></ul><ul><li>Lenders request guarantee from Guarantor </li></ul><ul><li>Guarantor guarantees loans; sends to Lenders </li></ul><ul><li>Lender sends funds to School (either directly or via a 3 rd party disbursement agent, such as the NDN) </li></ul>
  10. 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. 11. Guarantor Flow (School Initiated) <ul><li>Process for School Initiated Guarantor Flow 1: </li></ul><ul><li>School Certifies Loan; sends Certification file to Guarantor </li></ul><ul><li>Guarantor guarantees the loan </li></ul><ul><li>Guarantor requests signed MPN for new borrowers (either on paper MPN or electronically) </li></ul><ul><li>New students sign MPN, return to Guarantor </li></ul><ul><li>Guarantor obtains funds from Lender(s) </li></ul><ul><li>Guarantor disburses consolidated funds to School (either directly or via a 3 rd party disbursement agent, such as the NDN) </li></ul>
  12. 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. 13. Guarantor Flow (Borrower Initiated) <ul><li>Process for Borrower Initiated Guarantor Flow: </li></ul><ul><li>Borrower applies for loan with Guarantor; signs MPN (either on paper MPN or electronically) </li></ul><ul><li>Guarantor requests School Certification </li></ul><ul><li>School Certifies Loan; sends Certification File to Guarantor </li></ul><ul><li>Guarantor guarantees loan </li></ul><ul><li>Guarantor obtains funds from Lender(s) </li></ul><ul><li>Guarantor sends funds to School (either directly or via a 3 rd party disbursement agent, such as the NDN) </li></ul>
  14. 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. 15. Which Process is Right for a School?
  16. 16. Factors to Consider: <ul><li>Loan Delivery, FAM Systems, Proprietary Systems </li></ul><ul><li>Number of Players </li></ul><ul><li>Number of Steps Involved </li></ul><ul><li>Number of Points of Contact </li></ul><ul><li>Lender / Guarantor Benefits </li></ul><ul><li>Relationship </li></ul><ul><li>Partner capabilities </li></ul><ul><li>Split Processing </li></ul>
  17. 17. <ul><li>Q U I Z T I M E ! </li></ul>N A M E T H A T F L O W !
  18. 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. 19. <ul><li>LIGHTNING ROUND ! </li></ul>F I L L T H E S Q U A R E S ! I N
  20. 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. 21. <ul><li>BONUS ROUND ! </li></ul>T R U E O R F A L S E !
  22. 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. 23. <ul><li>THANKS FOR PLAYING . . . . </li></ul>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. 24. Questions?
  25. 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

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