The Theory and Practice of Policies & Procedures

David Bailey, Vice President – KHEAAWill Shaffner, Director – MOHELA

Colleen Slattery, Federal Compliance Officer – MOHELA

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Policy vs. Procedure

• Policies

– Designed to Drive Rational Outcomes– Ensure Consistent Performance and

Outcomes– Created to Convey Intent– Instilled to Document Commitment– Driven by Boards or Government

Organizations

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Policy vs. Procedure

• Examples of Policies

– Security Policy– Philanthropy Policy– Customer Satisfaction Policy– Increasing the Number of College

Graduates– Protecting Consumers

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Policy Design

• Centralized Control• Standard Approval Protocol• Version Control• Common Components

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Policy vs. Procedure

• Procedures–Who–What–When–Where–Why– How (Department level)

• Should support Policy

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Policy vs. Procedure

• Examples of Procedures

– Security - New Hire Badging– Philanthropy - Charitable Giving– Customer Satisfaction - Ensuring

Satisfied Customers - Escalation– Increasing Graduates - Greater Pell

Accessibility or Broaden Admissions– Protecting Consumers - Complying with

SCRA or Greater Transparency

Policy DriversInternal and External

Legislative/Statutory

Regulatory (CFPB, FFELP, FSA – DL, other)

Policy

Procedure

Governance/Boards

Mission and Strategic Plan

Policy

Procedure

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Policy DriversInternal

• Business Need– Requirements that an Organization Must Follow– Achieve Goals and Objectives from Strategic

Plan–Meet Internal Metrics

• Best practices– A Method or Technique that Consistently Shows

Results Superior to those Achieved by Other Means

– Efficiently Process and Service Loans– Transparency or Open Records

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Policy Drivers

• CFPB– Increased Oversight • Private Loan Origination• Loan Servicing• Ombudsman/Complaint Management

– Servicemembers Civil Relief Act (SCRA), etc.

– Increased Risk• The CFPB can obtain “any appropriate legal

or equitable relief with respect to a violation of Federal consumer financial law,”

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Policy Drivers

• FFELP– Federal Register/NPRM– IFAP– Professional Associations, NCHER, etc.

• Federal Assets (DL, PUT, etc.)– CR / Change Request– Directives

• Other– Sandy, etc.

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Policy Design

• Common Components– Purpose– Scope – Roles and Responsibilities– Management Commitment– Coordination among Organizational Entities– Compliance– Exceptions– General Information– Signatories– Terms and Definitions– Effective / Implementation Date

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Procedure Design

• Common Components– Standardized Format

• Purpose• Objective• Scope• Terms, Definitions, Acronyms

– Desktop Procedures (step by step)– Review and Approval Process– Version Control– End User Acknowledgement– Annual Validation

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Implementation

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Questions????