2011 Archive - Lane Community College - Process Redesign Project

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Process Redesign Project

This is an archive of the Process Redesign web pages - for historical and reference purposes only

Federal Loan Processes

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Change Federal Student Loan processing.

Key Issues:

High Federal Perkings Loan default rate resulting in penalties imposed by the Department of Education including:

additional compliance requirements (e.g., reporting, monitoring)
loss of new federal capital

Fragmented processing (i.e., Financial Aid & College Finance, UNISA & Lane); no single unit or individual responsible for the entire process

Relationship with loan servicer (i.e., inability to access electronic data, slow response rate, unawareness of operation)

Continued Lane participation in or responsibility for loan servicing

Federal financial aid and cash management procedure is not clearly defined

Use of college funds to cover cost of federal loan funds

CURRENT SITUATION:

PEOPLE/ ORGANIZATION	CROSS-FUNCTIONAL WORKFLOW	TECHNOLOGY	PHYSICAL INFRASTRUCTURE	POLICIES/ PROCEDURES
primary accountability with Financial Aid Office; College Finance is additional provider/support role responsibility for loan administration is split between Financial Aid & College Finance Financial Aid: awarding - advisors (4) loan coordinator (1) College Finance: disbursement - cashiers (4) reporting, deferment, collections & cancellations - student accounts (3) drawdown - accountant (1) repayment - operations (1)… loan administration: 1/2 student accounts 5% accountant unfamiliar with UNISA organization - no Lane advocate College Finance is primary contact with UNISA Financial Aid & College Finance different reporting relationships	internal and external processing are out-of-sync lack of communication limited understanding of roles/responsibilities and contractual agreement Lane is unfamiliar with UNISA processes loan servicer not familiar with Lane environment (employment trends, student population)	outdated reporting vehicles & technology manual disbursement primarily manual processing - limited electronic	disbursement occurs at one location at a time College Finance & Financial Aid located in different buildings	federal regulations govern program administration Lane's refund policy (i.e. disbursement schedule) is positively controlling default rate refund policy & financial aid disbursement schedules are not student-oriented Lane's definition of individual default is extremely strict unfamiliar with contractual obligation with UNISA

PROPOSED SOLUTION:

PEOPLE/ ORGANIZATION	CROSS-FUNCTIONAL WORKFLOW	TECHNOLOGY	PHYSICAL INFRASTRUCTURE	POLICIES/ PROCEDURES
create a Student Loan Team resident in the SF! Ctr. with responsibility for: reporting - servicer & feds pre & post loan advising due diligence deferments collection cancellation reconciliation origination Technical Representatives in SF! Ctr. report to Financial Aid Team Leader Manager cross training for all team members in entire loan process servicer provides training	examine/understand servicer processing (timely access to data, reconciliation) investigate loan servicing options: in-house, outsource, work w/UNISA to re-establish relationship clearly define roles & responsibilities for servicer & Lane	determine electronic options for: reporting disbursement reconciliation database maintenance payments collections cancellations	electronic disbursement and funds transfer all loans disbursed from SF! Ctr.	examine refund & financial aid disbursement policies; impact on student & Lane revise definition of default & convey to loan servicer review College Finance procedures with UNISA

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Lane Community College - Process Redesign Project
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Revised 12/2/96 (llb)
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