Slide 1© Student Lending Analytics, LLC
Student Lending AnalyticsFlash Survey Update: FFEL and Direct Lending Trends
March 15, 2010
This presentation does not constitute formal policy or legal advice and should not be relied upon as such.
Slide 2© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Background
Situation– Student aid bill may be part of reconciliation package with
health care overhaul which could be voted upon as early as this week
Survey Goals– Determine where schools are in the decision-making process
when it comes to the federal student loan program for 2010-11
– Identify steps that schools have taken to prepare for a potential transition to the Direct Loan program
– Generate ideas for improving the implementation process for the Direct Loan program
Slide 3© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Methodology
Emailed flash survey on March 10, 2010 with due date of March 12, 2010.
In addition to demographic questions, the survey had the following questions:– Please select the choice which best describes your institution's current
plans for the 2010-2011 academic year?– [For those transitioning to Direct Lending] Describe your overall level of
satisfaction with the implementation process to date. – [For those transitioning to Direct Lending] What single resource has been
most helpful to you and your team?– CHECK ALL THAT APPLY. My institution (either myself or other staff
members) has taken the following steps to prepare for Direct Lending should that become the platform for loan origination as well as servicing in 2010-11:
– COMMENT ON THIS STATEMENT. The administration at my institution is interested in having a contingency plan prepared to implement Direct Lending by the proposed July 1, 2010 start date.
Slide 4© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Methodology (continued)
Responses were normalized for following reasons– Email addresses that did not correspond with an educational institution were
excluded– Several schools provided multiple responses; only one response was
analyzed
Overall, 365 responses from financial aid administrators were included in the analysis
Slide 5© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Insights
Seventy two percent (72%) of respondents to the survey are currently in Direct Lending (24% of respondents) or have committed to move to DL for the 2010-11 school year (48%).
– These figures are up from 47% from the November 2009 survey when 24% of respondents were in Direct Lending and 23% had committed to move to DL for 2010-11 school year.
– 17% of respondents indicated that they were preparing for DL but had not fully committed to implementing it.
– 2% indicated that they would “only begin preparations for a transition to Direct Lending when required by legislation.”
Overall, 2% of survey respondents indicated that they had not completed any of the listed activities (there were twelve in the survey) to prepare for a possible transition to Direct Lending
The five most frequently cited activities that respondents are undertaking/have undertaken to prepare to implement Direct Lending are:
– Participating in Direct Lending webinars– Contacting the COD School Relations Center to request participation in DL program– Reviewing materials on the Direct Lending website– Updating the PPA– Attended the FSA Conference
Slide 6© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Insights (Continued)
97% of schools found the direct lending implementation process to be acceptable or better
– 16% of respondents indicated that they were “very satisfied”, 52% “satisfied” and 29% found the implementation process to be “acceptable”
Over 2/3 of respondents “agree” or “strongly agree” that their school administration is interested in having a contingency plan in place to implement DL by the July 1, 2010 deadline.
Slide 7© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Profile of Survey Participants
School Type
0%10%20%30%40%50%
4-year private 4-year public 2-year public Other
School Ownership
0%10%20%30%40%50%
Private Public Other
School Size
0.0%10.0%20.0%30.0%40.0%50.0%
0 - 2,500 2,501-7,500 7,501-15,000 More than15K
Slide 8© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL TrendsCurrent Plans For 2010-11 (Overall)
5%
2%
17%
5%
48%
24%
5%
8%
26%
13%
5%
18%
24%
0% 10% 20% 30% 40% 50%
Other
Currently FFELP; Will Prepare For WhenRequired By Legislation
Currently FFELP; Preparing for DL;Would Remain FFEL if Possible
Currently FFELP; Preparing for DL;Undecided
Currently FFELP; Committed Mid-year ToDL
Currently FFELP; Committed To DL for2010-11
We are and will remain a Direct Lendingschool
Percentage of Total Respondents
Nov 09Mar 10
Survey question #1: Please select the choice which best describes your institution's current plans for the 2010-2011 academic year?
Slide 9© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL TrendsCurrent Plans For 2010-11 (4-Year Private)
5%
2%
17%
5%
52%
20%
4%
8%
29%
15%
5%
20%
18%
0% 10% 20% 30% 40% 50% 60%
Other
Currently FFELP; Will Prepare For WhenRequired By Legislation
Currently FFELP; Preparing for DL;Would Remain FFEL if Possible
Currently FFELP; Preparing for DL;Undecided
Currently FFELP; Committed Mid-year ToDL
Currently FFELP; Committed To DL for2010-11
We are and will remain a Direct Lendingschool
Percentage of Total Respondents
Nov 09Mar 10
Survey question #1: Please select the choice which best describes your institution's current plans for the 2010-2011 academic year?
Slide 10© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL TrendsCurrent Plans For 2010-11 (4-Year Public)
4%
1%
11%
2%
43%
39%
6%
5%
17%
11%
2%
13%
45%
0% 10% 20% 30% 40% 50%
Other
Currently FFELP; Will Prepare For WhenRequired By Legislation
Currently FFELP; Preparing for DL;Would Remain FFEL if Possible
Currently FFELP; Preparing for DL;Undecided
Currently FFELP; Committed Mid-year ToDL
Currently FFELP; Committed To DL for2010-11
We are and will remain a Direct Lendingschool
Percentage of Total Respondents
Nov 09Mar 10
Survey question #1: Please select the choice which best describes your institution's current plans for the 2010-2011 academic year?
Slide 11© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL TrendsCurrent Plans For 2010-11 (2-Year Public)
3%
5%
22%
7%
46%
17%
8%
12%
24%
11%
5%
25%
16%
0% 10% 20% 30% 40% 50%
Other
Currently FFELP; Will Prepare For WhenRequired By Legislation
Currently FFELP; Preparing for DL;Would Remain FFEL if Possible
Currently FFELP; Preparing for DL;Undecided
Currently FFELP; Committed Mid-year ToDL
Currently FFELP; Committed To DL for2010-11
We are and will remain a Direct Lendingschool
Percentage of Total Respondents
Nov 09Mar 10
Survey question #1: Please select the choice which best describes your institution's current plans for the 2010-2011 academic year?
Slide 12© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL TrendsActivities To Prepare for DL – Overall
2%
8%
52%38%
57%
49%
43%51%
78%
70%
61%76%
82%
5%
3%18%
25%
28%
29%29%
53%
56%58%
59%
75%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
None
Consultants
Comm. Strategy
Mentor Relationship
Electronic Account
Team
Software Vendor
DL Reg. Mtgs.
COD School Relations Center
Update PPA
FSA Conference
DL Website
DL Webinars
Percentage of Total Respondents
Nov 09Mar 10
Survey question #2: CHECK ALL THAT APPLY. My institution (either myself or other staff members) has taken the following steps to prepare for Direct Lending should that become the platform for loan origination as well as servicing in 2010-11:
Slide 13© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Most Important Resource For Implementing DL
Listservs– “Emails from listservs that I belong to…”– “Other schools on our enterprise software user listserv.”
Department of Education/COD– “The Department direct lending transition process and newsletters as well as
being assigned a DOE rep to help with the transition.”– WE have had several conference calls with the DL staff at the department. THey
have been extremely helpful.– “Barbara Davis with Dept of Education has been absolutely wonderful!!– “Catherine Lee, our USDE Direct Lending contact person”– “Christopher Smith, the client rep from USDE helped us with setup.”– “Federal Student Aid and NASFAA training.”– “The DL "onboarding team" has been a great help. We have had a contact person
who is extremely knowledgeable about all aspects of DL.”– “COD staff assigned to assist with school implementation.”– “COD testing liason”
Slide 14© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Most Important Resource
Peers– “Site visit to another institution already processing DL.”– “Training with another DL school on the same FA system.”– “Professional Colleagues”– “Discussions with other schools”– “Copying what schools have done before us.”
Software guides/consultants– Software vendor consultant is helping is with the process.– “Lists from our FAMS on what steps should be taken for transition.”– We also spent the money to have a Datatel consultant come in for 2 days to
help us move things along.”– “Banner consultant”– “Powerfaids manual”
Slide 15© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Satisfaction With Implementation Process
16%
52%
29%
3%1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Very Satisfied Satisfied Acceptable Unsatisfied Very Unsatisfied
Perc
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Survey question: Describe your overall level of satisfaction with the implementation process to date.
Slide 16© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Ideas To Improve DL Implementation Process
Difficulty of getting other departments on board– “Our Business Office staff seems resistant to the fact that they are a vital
part of making our switch to Direct Lending a successful one.”– “Our business office folks have not plugged in as much to the G5 process as
we think they ought to. They will be surprised!”
Support from COD– “COD support is flagging. Difficult to access and numerous wrong answers.
COD needs improvement.”
One-to-one resources– “Webinars and workshops have been a good tool, but I wish I were
assigned someone specific from the Dept of Ed to help me with the transition.”
– “Need money for consultant to help with the conversion and training.”– “The dept should have personnel available to visit schools to help with
implementation.”
Slide 17© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Ideas To Improve DL Implementation Process
Website updates– “Quicker updates from the Department of Education. Have a website
starting March 26th, but it feels like the deconstruction of the FFEL program began in November of last year. If the Feds were going to push this without the July 1st decision, then they themselves should have been more prepared.”
– “Bring up the new website for PLUS loans asap!”
Testing– “Being able to test files sooner. I am told by the person who handles this
that the Dept. has specific guidelines on when to start testing, and the amount of records that can be tested.”
– “Provide more opportunities for testing the COD data flow in our system.”– “DL was quite inflexible with testing.”
Slide 18© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends Ideas To Improve DL Implementation Process
Software vendor issues– “Provide software-specific (i.e., Banner, Datatel, PeopleSoft, etc) opportunities to
learn about appropriate process flows.”– “PowerFAIDS is late in with acceptable modules.”– “Powerfaids software support”
ONE implementation guide– “Found multiple descriptions of steps for implementation (from DL coalition, from DL
servicing, from NASFAA) and they did not all match. Would be nice if there was one absolute step-by-step that all agencies and organizations would point schools to.”
Dissatisfaction with Congress– “Congress needs top act sooner so that schools can make a decision. By not doing
so, yet indicating that "if it passes it will be in effect for 7/1/2010", they have given schools no other choice but to prepare their processes as if Direct Lending for all is definitely going to happen, whether it passes or not. We are being blackmailed into going Direct whether we want to or not, even if the bill doesn't pass or if the legislation delays implementation for another year.”
Slide 19© Student Lending Analytics, LLC
SLA Flash Survey: FFELP and DL Trends School Administration’s Interest In Direct
Lending
31%
37%
11%
6%
15%
44%
24%
4%
12%15%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Strongly agree Agree Moderatelydisagree
Stronglydisagree
Not sure
Perc
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Nov 09Dec 10
Survey question: COMMENT ON THIS STATEMENT. The administration at my institution is interested in having a contingency plan prepared to implement Direct Lending by the proposed July 1, 2010 start date.
Slide 20© Student Lending Analytics, LLC
Thank You
Thank you again for your participation!
Please contact Tim Ranzetta if you have any additional comments or questions regarding this survey– Email: [email protected]– Phone: 650-218-8408
For more information on Student Lending Analytics, proceed to the final two slides
Slide 21© Student Lending Analytics, LLC
Student Lending AnalyticsBackground
Founded in 2007
Independent Research and Advisory Service with NO lender affiliations
Mission: Find best lenders for students through an analytically rigorous and comprehensive process
Services– RFI Management of FFEL and Private Loans– Research
Successes to Date– Managed RFI process at institutions with over $600 million in loan volume– Inside Student Lending, our monthly newsletter, reaches over 5,000 financial aid
administrators– Student Lending Analytics Blog has become the go-to source for breaking
developments and analysis on the student lending industry– SLA Flash Surveys have included the insights from over 1,500 financial aid
professionals on a variety of timely topics– Private Loan Options and the SLA’s 2008 Alternative Loan Guide provides students
and financial aid offices with an objective and focused list of private lenders
Slide 22© Student Lending Analytics, LLC
Student Lending AnalyticsResources Available
SLA Private Student Loan Ratings
2009 SLA Private Loan Series – Ten part series on topics ranging from finding a cosigner to reading the
promissory note
Student Lending Analytics Blog– Timely, insightful information about the student loan market
Private Loan Insight Survey
Student Satisfaction Surveys