CRI Common Review Initiative

1
CRI-Common Review Initiative

• Improving Accountability in the FFEL Program
  Through Cooperation
• November 17, 2003
• Mike Hawkes
• Educational Credit Management Corporation

2
DISCLAIMER

• This presentation was prepared in October, 2003.
  CRI is an evolving concept accordingly,
  information contained in this presentation may
  not be 100 accurate by the time this session is
  presented at the Fall Training Conference.

3
CRI Concept

• Guarantors would combine resources to conduct a
  single review of large lenders and servicers.
• Each CRI review would go toward meeting the
  requirements of 682.410(c)(1) for all CRI
  participating guarantors

4
CRI Progress

• CRI great progress in less than one year
• Concept to Guarantor CEO caucus in November 2002
• Steering Committee formed December 2002
• Conference call in February 2003
• Face-to-face meeting in March 2003
• Workgroups have been meeting ever since

5
Current CRI Status

• August 27, 2003
• Final CRI proposal to ED
• Proposal went to ED with endorsements from
• All 36 guaranty agencies
• Student Loan Servicing Alliance (SLSA)
• Consumers Bankers Association (CBA)
• Education Finance Council (EFC)
• National Council of Higher education Loan
  Programs (NCHELP)

6
Current CRI Status

• September 23, 2003
• Met in DC with Financial Partners
• September 30, 2003
• Suggested deadline for determining CRI
  participation by signing agreement
• To date, 28 of 36 guarantors have signed CRI
  agreement

7
Current CRI Status

• October 29, 2003
• First CRI conference call since agreements signed
• November 16, 2003
• CRI review team member training
• December 10, 2003
• First meeting of CRI Oversight and Administration
  Council
• 2004-2005 biennium
• Begin conducting CRI reviews

8
Current CRI Status

• On-going CRI projects
• Completion of CRI review procedures and review
  guide
• Completion of CRI administrative policies and
  procedures manual
• Lender selection and review scheduling for
  2004-2005 reviews

9
CRI Focus

• Initial focus reduce redundancy in lender
  reviews by guarantors
• Current focus improving review quality with
  added benefit of reducing redundancy

10
CRI Improving Reviews

• Current file review process inherently limited
• Not inclusive of all attributes
• Sample sizes limited
• CRI review protocol avoids these limitations
• Use of attribute testing
• Statistically valid sampling to provide a 95
  confidence level
• Adoption of best practices

11
CRI Improving Reviews

• ED Lender Review Guide is base document for CRI
  review protocol
• CRI review teams would test additional attributes
  not contained in Guide
• CRI reviews would not test LaRS
• Proposal calls for ED to test this
• CRI reviews would track findings back to LaRS
  where adjustments are necessary

12
CRI Review Selection

• CRI reviews would be conducted at
  lenders/servicers required to be reviewed by at
  least four guarantors
• Servicer reviews would apply to all lenders
  contracting with that servicer

13
CRI Reviews - Lenders

• CRI reviews would tentatively be conducted at the
  following lenders
• Citibank (currently reviewed by 12 GAs)
• Educaid/Wachovia (14)
• Wells Fargo (14)

14
CRI Reviews - Servicers

• CRI reviews would tentatively be conducted at the
  following servicers
• ACS (currently reviewed by 10 GAs)
• AES (6)
• Edamerica (7)
• KHESLC (7)
• MOHELA (4)

15
CRI Reviews - Servicers

• CRI reviews would tentatively be conducted at the
  following servicers
• Nelnet (currently reviewed by 24 GAs)
• Sallie Mae (24)
• SSSC (5)
• Suntech (9)

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CRI Benefits

• Current focus improving review quality with
  added benefit of reducing redundancy
• Demonstrably better reviews through attribute
  testing, statistically valid sampling and best
  practices
• By conducting 12 CRI reviews, 111 other reviews
  would be eliminated
• Significant cost savings for guarantors and
  trading partners

17
CRI Current Participants

• The following guarantors have signed CRI
  Participation Agreements
• American Education Services
• American Student Assistance
• Colorado Student Loan Program
• Connecticut Student Loan Foundation
• Education Assistance Corporation
• Educational Credit Management Corporation
• Florida Department of Education

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CRI Current Participants

• Other agencies participating are
• Great Lakes Higher Education Corporation
• Illinois Student Assistance Commission
• Iowa College Student Aid Commission
• Kentucky Higher Education Assistance Authority
• Louisiana Office of Student Financial Assistance
• Michigan Higher Education Assistance Authority
• Missouri Student Assistance Resource Services
• Montana Guaranteed Student Loan Program

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CRI Current Participants

• Other agencies participating are
• National Student Loan Program
• New Mexico Student Loan Guarantee Corporation
• New Jersey Higher Education Student Assistance
  Authority
• Northwest Education Loan Association
• Oklahoma Guaranteed Student Loan Program
• Oregon Student Assistance Commission
• Student Loan Guarantee Foundation of Arkansas

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CRI Current Participants

• Other agencies participating are
• Student Loans of North Dakota
• Tennessee Student Assistance Commission
• Texas Guaranteed Student Loan Corporation
• USA Funds
• Utah Higher Education Assistance Authority
• Vermont Student Assistance Corporation

21
CRI The Future

• Bring additional guarantors into the CRI process
• Additional training for CRI review team members
• Work with ED to demonstrate effectiveness of CRI
  reviews
• Hopefully obtain permanent ED approval of CRI

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Common Review Initiative

• Questions?