Background

This federal program is the largest source of college financial assistance in North America and they are responsible for managing assistance programs for millions of citizens and their families. Its core mission is to ensure that all eligible Americans benefit from federal financial assistance and are given the option to continue their education. As an agency, they play a central and essential role in America’s postsecondary education community. Each year the program provides billions of dollars in funding through a variety of methods including, grants, work study and loans.

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In 1994, President Clinton initiated a program replacing loans backed by third parties which protected the lender against loss if the borrower defaulted. This new bill would require colleges to participate and switch from these types of loans until at least 60 percent of loans nationwide were direct. At that time, Xerox was
the first and only servicer to originate, service, consolidate and provide portfolio management of these new loans.

When it came time for the agency to overhaul the loan program, they turned to Xerox to design, implement and maximize new processes in order to meet the challenges in an evolving political landscape. This program was an exciting and innovative approach to servicing the agency’s portfolio by combining multiple contracts into one offering. Under this procurement, the agency modernized the servicing system and shifted the contract to a performance-based arrangement. Under the contract, we provided comprehensive servicing, consolidation, debt collection and portfolio management for more than $264 billion in loans to more than 12 million borrowers at the time.

Challenge

A major challenge we faced was taking the disparate systems and collapsing them into one program with one common repository. Each program serviced a different audience and had unique processes to adhere by, which made consolidation difficult. The disparate systems were code dependent, so any legislative modifications needed to go through the whole code life cycle in order to change the system. As congress continued to introduce new legislation to help borrowers pay back their loans, we were responsible for changing processes and training staff to stay up to date quickly. These changes were inconsistent and frequent.

Another challenge came in the form of peaks in processing and increased demand. For example when interest rates dropped dramatically, there was a big push to consolidate simultaneously. With this type of economic change, it drove a large volume of work to our programs. We had to be able to work closely with the agency to expand capacity of systems, servers and other resources to address these challenges.

Meeting performance metrics for each program was challenging but critical. As the primary contractor, we were required to meet extremely stringent measurements that drove client, school and borrower satisfaction. The metrics take into consideration how quickly and accurately we resolved issues and the quality of customer satisfaction.

Solutions

This contract was an exciting opportunity for us to combine several government solutions under one umbrella. Within that, we provided the agency with several of our solutions including: Customer

Care and Loan Servicing, Financial Transaction Processing, Delinquency and Default Management, Portfolio and Data Management, Compliance and Regulatory Management, and Software Development, Production and Project Management.

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