Exceptional Performer _____

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Exceptional Performer_____

• Maree Fox, HESC
• Loretta Paganini, Student Loan Corporation
• Ron Stroud, TGSLC
• Dr. Ann Maria Fusco, Financial Partner Services

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Exceptional Performer_____

• Loretta Paganini
• Unit Manager of Claims and DAAR Unit

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Exceptional Performance Application Process As
of December 9, 2003

• No formal application form for the Exceptional
  Performer designation. Applicants need to submit
  a written request in accordance with the
  Exceptional Performer Lender Audit Guide, which
  incorporates the federal regulations.

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• The Department of Education has 60 days to
  respond to an application submission.
• The 12-month period selected by a lender and
  servicer for its compliance audit can be defined
  by the applicant, but may end no more than 90
  days before the date of request.

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• Lenders can only get the Exceptional Performer
  designation if they service their own loans.
• ED will have a standardized questionnaire for
  guarantors to address as part of the lender or
  servicer application. This should allow
  consistent collection of information on the
  various applicants.

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• Terri Shaw is currently the official designated
  to make EP determinations though this
  responsibility could be delegated.
• Guarantors are also eligible for the EP
  designation, though ED will not accept
  applications until the OIG updates its
  Exceptional Performer Guarantor Audit Guide.

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The Student Loan Corporation

• The Student Loan Corporation was designated as an
  Exceptional Performer on October 15, 2003.
• We began filing claims eligible for this
  designation after January1, 2004.

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The Student Loan Corporation Commitment

• Our commitment to quality, compliance, default
  prevention, due diligence, and timely filing of
  claims remains unchanged.
• We are presently looking for ways to reduce our
  student loan default rate. This demonstrates our
  continued focus on default reduction. We find
  that this is the key to the success of this
  program.

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• We have not only continued, but added internal
  requirements that focus on the qualities that
  allowed us to obtain the Exceptional Performer
  designation.
• We continue to deliver superior service to our
  trading partners, and work towards improving our
  industry.

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Questions?
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Exceptional Performer_____

• Ron Stroud
• Assistant Vice President of Claims
• Texas Guaranteed Student Loan Corporation

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Guarantor Role in the Application Process

• How many claims have been received by your
  organization from applicants in the past fiscal
  year?
• How many of these claims have been rejected?
• How many of these rejected claims were for
  incorrect or untimely repayment conversion date?
  For timely filing violations? For incorrect or
  untimely due diligence activities conducted?

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• Of all the claims rejected, how many were
  resubmitted and paid?
• What activities occurred to correct the claims
  rejected (e.g. missing documentation provided,
  loan cured through full payment/signed repayment
  schedule, loan cured through intensified
  collection activity)?

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• Do you know of any other material issues that
  would affect our consideration of this
  application for exceptional performer? If yes,
  please provide a detailed explanation.

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Claim Review

• GA need not validate exceptional performer
  eligibility at the claim level. This is
  self-certifying on the part of the servicer.
• Claim review does not include repayment
  conversion, due diligence, or timely filing.
• Payment on eligible claims is not subject to
  repurchase by the servicer unless the Department
  determines that the servicer engaged in fraud or
  purposeful misconduct in obtaining the EP
  designation.

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• Nothing prohibits the guarantor from reviewing
  the loan servicing in regard to paid claims as
  part of its program oversight responsibilities.
• Nothing prohibits the guarantor from requiring
  repurchase of a claim if the agency determines
  that a loan should not have been submitted as a
  claim.
• The lender must file, and the guarantor maintain,
  the documentation that the agency normally
  requires its lenders to submit with respect to
  the collection history of each loan.

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System Modifications

• Develop a way to flag approved servicers.
• Turn off edits for conversion to repayment,
  timely filing, and due diligence activity.
• Turn off any automatic calculation of risk
  sharing reduction.

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Claim Payment

• The notice of designation is deemed to have been
  received by the guaranty agency no later than 3
  days after the notice is mailed.
• Stays in effect for the 12 months immediately
  following notification of the lender/servicers
  designation.
• Claims are paid at 100

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• Guarantor is paying 20.00 more per 1,000.00
  claim under EP rules.
• Guarantor is being reimbursed 19.00 more per
  1,000.00 claim under EP rules. 
• Net effect is that
• Guarantor incurs an additional 1.00 per
  1,000.00 claim.
• ED incurs an additional 19.00 per 1,000.00
  claim.

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Questions?
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Exceptional Performer_____

• Dr. Ann Maria Fusco
• Director Financial Partners
• Eastern Region

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Exceptional Performance Qualifications

• Repayment Conversion
• Timely Filing of Claims
• Due Diligence in Collections

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• Established through prescribed procedures in the
  OIG Audit Guide
• http//www.ed.gov/about/offices/list/oig/non
• fed/epguidefinal.pdf

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Application Process

• Application is received in Financial Partner
  Services DC office
• Guaranty Agencies are notified and asked to
  respond to a series of questions
• Application Coordinator receives application for
  review

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Financial Partner Services Internal
Procedures

• The application is reviewed, ensuring that
• The submission is complete and,
• All required documentation is presented

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Financial Partner Services Internal
Procedures

• Review audit workpapers and,
• Ensure the sample universe is correct

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Financial Partner Services Audit Workpaper
Review

• Ensure all three exceptional performer activities
  were reviewed in detail by the auditor
• Review auditor error rate calculation

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Financial Partner Services Internal
Procedures

• Run multifunctional NSLDS queries and,
• Review by applicant a sample of queries

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Financial Partner Services Internal
Procedures

• Look at complaints
• Areas of complaint
• Due diligence Issues?
• Review claims statistics
• Guaranty agency information
• Material weaknesses

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FAQ Claims Review

• Does a guaranty agency need to review the entire
  claim package when the lender has an Exceptional
  Performance designation?

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FAQ Claims Review

• Guarantors are not required to review collection
  activities, however,
• For the specialty claims the guarantor must
  review determination documentation.
• For defaults, a guaranty agency must review claim
  to ensure necessary documentation is in the claim
  package.

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FAQ Claims Review

• Are supplemental claims paid at the same
  insurance rate as the original claims payment?
• Yes, it is paid at the same rate as the original
  claim.

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FAQ Claims Review

• If a loan has lost its guarantee and it is
  resubmitted, will the claim be paid under
  Exceptional Performance status? Does the
  guaranty agency assume liability for paying this
  claim?

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FAQ Claims Review

• Yes.
• It is the guarantors responsibility to ensure
  that a loan is valid prior to claim payment
• The guarantor will be liable for paying an
  invalid claim

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FAQ Claims Review

• Is the Exceptional Performance lender subject to
  denial of interest for timely filing and due
  diligence violations as defined in the cure
  bulletin?
• --Yes.

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FAQ Program Review

• Is there any impact to guarantor program review
  of lenders and servicers?
• There are no changes to a guarantors program
  review of lender and/or servicers.

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FAQ Program Review

• What assurance does a guaranty agency have that
  ED and or OIG will not assess a finding/liability
  on a claim that contained an error but was paid
  by the guaranty agency under Exceptional
  Performance status?

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FAQ Program Review

• The guaranty agency still has the responsibility
  to ensure all required documents and requirements
  are met prior to payment of the claim.
• If the claim was paid in accordance with
  regulations there will not be a basis for
  liability.

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Questions?
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Thank You! _____

• Maree Fox, HESC
• Loretta Paganini, Student Loan Corporation
• Ron Stroud, TGSLC
• Dr. Ann Maria Fusco, Department of ED