Yesterday afternoon, the Department of Education released the first of what will be ongoing quarterly customer service performance results for the four new federal loan servicers. The Department awarded loan servicing contracts to PHEAA, Great Lakes, Nelnet, and Sallie Mae in June 2009 to provide additional servicing capacity for loans purchased by the Department through the Ensuring Continued Access to Student Loans Act (ECASLA).
Beginning in July 2010, the Department will allocate new loan servicing volume among the four servicers based on how they score in the following five performance areas:
- Satisfaction among borrowers
- Satisfaction among financial aid administrators
- Satisfaction among federal agency personnel and/or contractors
- Success of default prevention efforts as measured by the percentage of borrowers in default
- Success of default prevention efforts as measured by the percentage of dollars in default
In its first quarterly report, which spans from October 2009 to December 2009, the Department found no differences among the servicers in their default prevention efforts. All of the servicers had a zero overall average percentage of borrowers and dollars in default. The results note that "it was rare for any borrower whose 2007-2008, 2008-2009, or 2009-2010 loan ... to default between October 2009 and December 2009."
There were differences between servicers' scores when it came to satisfaction among different customer groups. Sallie Mae garnered the highest borrower satisfaction scores, Great Lakes the highest school satisfaction scores, and PHEAA the highest federal agency satisfaction scores (See Summary of Customer Service Performance Scores for average scores). Overall, borrower satisfaction scores appeared to be lower than historical trends for FFEL servicers, according to the report.
However, the performance report notes that the customer satisfaction score differences between servicers were not statistically significant. The Department expects that as survey data is collected in subsequent quarters, the levels of uncertainty attributable to normal sampling error will be reduced.
Posted 03/11/10 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.
