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Common Review Initiative _____. Mike Hawkes, ECMC Brent Dove, USA Funds Penny Hagan, MOHELA. CRI – A One-Year Update. Mike Hawkes Educational Credit Management Corporation. CRI Concept. Guarantors are combining resources to conduct a single review of large lenders and servicers

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Common review initiative

Common Review Initiative_____

Mike Hawkes, ECMC

Brent Dove, USA Funds

Penny Hagan, MOHELA

Cri a one year update

CRI – A One-Year Update

Mike Hawkes

Educational Credit Management Corporation

Cri concept
CRI Concept

  • Guarantors are combining resources to conduct a single review of large lenders and servicers

  • These CRI reviews will go toward meeting the requirements of 682.410(c)(1) for each participating CRI guarantor

Cri goals
CRI Goals

  • Improve the quality of lender program reviews conducted by guarantors (including non-CRI reviews)

  • Reduce redundancy of reviews by guarantors

Cri approval
CRI Approval

  • In March, ED approved CRI as a pilot project.

  • Pilot runs from January 1, 2004 through December 31, 2005.

  • Working on measurements of effectiveness to evaluate whether CRI should be permanent

Participating cri guarantors
Participating CRI Guarantors

  • 33 guarantors have signed CRI participation agreements

  • Non-participants currently are:

    • Alaska

    • CSAC/EdFund

    • New Hampshire

    • North Carolina

Cri administration
CRI Administration

  • Formed a CRI Council – meets monthly via conference call

  • Formally adopted a CRI review guide and workbooks for attribute testing

  • Adopted an administrative guide

Cri leadership
CRI Leadership

  • Leaders are:

    • Aaron Cook – NELA Chair for 2004-05

    • Rick Buckingham – USA Funds Chair for 2006-07

    • Jim Elvekrog – Great Lakes Secretary

    • Carol Lindsey – TG Treasurer

Cri on site reviews
CRI On-site Reviews

  • CRI review teams have conducted five on-site reviews in 2004:

    • CFS/Suntech

    • MOHELA

    • Wells Fargo

    • ACS

    • AES

2005 cri reviews

Edfinancial Services



Sallie Mae



Regions Bank

Potential for two additional reviews

2005 CRI Reviews

Cri training

October 26-27 face-to-face meeting

Topics on agenda included:

Review scheduling and preparation

Workbook review and practice

Preparing and sending the report

IDEA software potential

CRI website

CRI Training

Cri web presence

Public Site

Click on “Initiatives”

Select “Common Review Initiative”

CRI Web Presence

Cri private site

Private site

Facilitate review team preparation

Storage of review files, workpapers

Security for each folder customized

CRI Private Site



Mike Hawkes


[email protected]

Cri a reviewer s perspective

CRI – A Reviewer’s Perspective_____

Brent Dove, USA Funds

Review scheduling
Review Scheduling

  • Contact lender/servicer to confirm dates are acceptable

  • Contact team members to ensure no conflicts exist

  • Contact ED lead reviewer

  • Obtain list of required reviews from CRI Review Scheduling & Lender Selection Workgroup

Review planning
Review Planning

  • Contact guarantors with required reviews

    • Ensure list of lender codes is correct

    • Request error rate percentages for NSLDS

  • At least 75 days before the review, contact the lender/servicer

    • Verify review dates

    • Collect contact information

    • Send and discuss electronic questionnaire

Engagement letter
Engagement Letter

  • List all guarantor names and corresponding code in body of letter

  • Specify period of review scope

  • Include list of data elements to be provided

  • Attach list of lender codes to be reviewed

  • Specify a “need by date” for data elements

Engagement letter1
Engagement Letter

  • Send 60 days before on-site review

  • Send courtesy copy of letter to all lenders for which the CRI review is being conducted at the servicer

  • Send courtesy copy of letter to ED lead reviewer

Engagement letter2
Engagement Letter

  • Questionnaire

  • Sample copies of due diligence notices

  • Copies of audits and program reviews completed within last two federal fiscal years

  • Data file containing all data elements

Data file
Data File

  • Borrower name and SSN

  • Lender ID

  • Servicer ID

  • Guarantor ID

  • Unique loan ID

  • Guarantee date

  • Loan type

  • Subsidy indicator

Data file1
Data File

  • Loan period begin and end dates

  • 1st disbursement date and amount

  • Current loan status

  • Loan status date

  • Cancellation date and amount

  • Refund date and amount

  • Out-of-school date

Data file2
Data File

  • Interest rate

  • Current principal balance

  • Capitalized interest balance

  • Deferment begin and end dates

  • Forbearance begin and end dates

  • Date entered repayment

Data file3
Data File

  • Total payments

  • Days delinquent

  • Claim paid date

  • Loan purchase date

  • Loan sale date

  • Loan transfer date

School as lender
School as Lender

  • Send letter to school, requesting the following documentation:

    • Organizational chart

    • Financial statements

    • Description of how I & SA payments were used for need-based grant programs

Random samples
Random Samples

  • Run servicer’s data files through IDEA software to select a random sample

  • A sample of 179 accounts is selected for each CRI chapter

  • At least 30 days before the review, send a core sample of 29 accounts for each testing area

On site review
On-site Review

  • Entrance conference

  • Remain in constant contact with lender/servicer staff

  • Attend scheduled meetings

  • Exit conference

Cri chapters
CRI Chapters

  • Chapter 1 - Origination and Disbursement

  • Chapter 2 – Conversion to Repayment

  • Chapter 3 - Deferments

  • Chapter 4 – Forbearances

  • Chapter 5 – Collection and Claims

Cri chapters1
CRI Chapters

  • Chapter 6 – Payment Application & Rate Changes

  • Chapter 8 – Credit Bureau Reporting

  • Chapter 9 – Purchase/Sale/Transfer

  • Chapter 10 – Consolidation Loans

  • Chapter 11 – NSLDS Reporting

Cri chapter 1 origination and disbursement
CRI Chapter 1Origination and Disbursement

  • Verify each loan is supported by valid prom note

  • Verify correct interest rate determined

  • Verify lender provided required disclosure info

  • Verify lender obtained credit history for PLUS credit check

Cri chapter 1 origination and disbursement1
CRI Chapter 1Origination and Disbursement

  • Verify PLUS checks made co-payable

  • Verify proper negotiation/consummation

  • Verify proper reissue of disbursement

  • Verify proper late disbursement

  • Verify cancellations/refunds applied correctly

Cri chapter 2 conversion to repayment
CRI Chapter 2Conversion to Repayment

  • Review written procedures for conversion to repayment

  • Verify out-of-school date

  • Verify borrower provided timely with complete repayment information

  • Verify timely conversion

  • Verify repayment terms correct

Cri chapter 3 deferments
CRI Chapter 3Deferments

  • Review deferment forms to ensure compliance

  • Review written procedures

  • Verify borrower’s eligibility for specific deferment

  • Verify length of deferment is appropriate

Cri chapter 3 deferments1
CRI Chapter 3Deferments

  • Verify maximum number of months for deferment type not exceeded

  • Verify proper interest accrual

  • Verify lender reported deferment to theguarantor

  • Verify next payment due date timely

Cri chapter 4 forbearances
CRI Chapter 4Forbearances

  • Review forbearance forms to ensure compliance

  • Review written procedures

  • Verify request documented and processed timely

  • Verify length of forbearance documented

Cri chapter 4 forbearances1
CRI Chapter 4Forbearances

  • Verify signed forbearance agreement obtained

  • Verify borrower eligible for forbearance type granted

  • Verify timely resumption of payments

Cri chapter 5 due diligence cure claim
CRI Chapter 5Due Diligence/Cure/Claim

  • Review written procedures for collection due diligence

  • Review due diligence letter language

  • Verify actual dates of phone calls selected from servicing history

  • Verify timeliness of due diligence letters and phone calls

  • Verify skiptracing initiated timely

Cri chapter 6 payment application rate changes
CRI Chapter 6Payment Application & Rate Changes

  • Review procedures for allocating payments between principal, interest, etc.

  • Determine how partial payments and prepayments are handled

Cri chapter 6 payment application rate changes1
CRI Chapter 6Payment Application & Rate Changes

  • Determine procedure for handling credit balances and write-offs of small balances

  • Verify current interest rate is correct

  • Verify correct calculation of capitalized interest

Cri chapter 8 credit bureau reporting
CRI Chapter 8Credit Bureau Reporting

  • Verify that lender/servicer reported FFEL loan amounts within 90 days of disbursement

  • Verify correct outstanding balance reported

  • Verify delinquency status reported

  • Verify payment in full reported

Cri chapter 9 purchase sale transfer
CRI Chapter 9Purchase/Sale/Transfer

  • Review borrower notification to ensure proper information indicated

  • Review written procedures for processing purchases/sales/transfers

  • Verify borrower notified timely

  • Verify guarantor notified timely

Cri chapter 10 consolidation loans
CRI Chapter 10Consolidation Loans

  • Verify all required forms completed accurately

  • Verify that LVC completed by holder of each loan consolidated

  • Verify weighted average of interest rates properly calculated

  • Verify length of repayment period correctly calculated

  • Verify first payment due date set timely

Cri chapter 11 nslds reporting
CRI Chapter 11NSLDS Reporting

  • Verify current loan status matches lender history

  • Verify outstanding principal balance amount matches lender history

  • Verify outstanding principal balance date is accurate

  • Review written procedures for NSLDS reporting

  • Review submission error summary reports

  • Review unreported loan rates

Report writing and review close out
Report Writing and ReviewClose-out

  • Lender/servicer given two weeks to resolve preliminary findings discussed at exit conference

  • Reviewer will compile draft report after servicer’s response is received

Report writing and review close out1
Report Writing and ReviewClose-out

  • 45 days after servicer’s response deadline, program review report will be sent

  • Lender/servicer has 30 days to respond to report and each subsequent response

  • Closing letter will be sent tolender/servicer

Cri a servicer s perspective

CRI – A Servicer’s Perspective_____

Penny Hagan, MOHELA

Cri concept1
CRI Concept

“What we call ‘Progress’ is the exchange of one nuisance for another nuisance.”

Havelock Ellis

Recommended servicer review preparation
Recommended Servicer Review Preparation

  • Data selection

  • Staff

  • System

  • Documents

  • Reviewer working environment

Data selection
Data Selection

  • Discuss system options/limitations

  • Understand the requested criteria

  • Understand the reasoning behind the requested criteria

  • Provide data for selections well in advance

Staff preparation
Staff Preparation

  • Questionnaire

  • Experience

  • Availability

  • Entrance Conference

  • Exit Conference


  • Discuss system needs

  • Assist reviewer in understanding proprietary system utilization

  • Assist reviewer in extracting information from the system


  • Discuss document needs

  • Discuss document layout/design

  • Have all documents ready for reviewer upon arrival

Working environment
Working Environment

  • Clean, well lit, ample space, communication capabilities

  • Adequate technical accommodation

  • Access to necessary systems

Helpful hints
Helpful Hints

  • Communicate

  • Cooperate

  • Clarify

Exit conference
Exit Conference

  • Attendees

  • General discussion of process

  • Discussion of collected information

  • Discussion of additional needs (if any)

Post review
Post Review

  • Continue communication with CRI lead

  • Do not hesitate to plead a case

  • Retain copies of all pertinent documents


  • Response required for CRI and DE

    • DE Letter of Appeal (if necessary)

  • Discuss response with appropriate staff

  • Provide response within outlined timeframe

  • Closing letter final response from CRI team



Penny Hagan

636-532-0600 x3362

[email protected]

Thank you for joining us please be sure to complete your conference evaluation form

Thank you for joining us!Please be sure to complete your conference evaluation form!

Mike Hawkes, ECMC

Brent Dove, USA Funds

Penny Hagan, MOHELA