SSJF Supplemental Doc.docx

Supplemental document to ISAC's SSJF for IDAPP Student Loan Servicing

Section VI - Business Rationale

2. Provide a list and describe in detail the specifications required to satisfy the need:

Detailed specifications:

The vendor has a system that can automatically produce borrower correspondence such as delinquency letters, acceleration letters, etc., and any notices as required per federal regulation and/or IDAPP policy and record the activity within the borrower's records. Additionally, they process forbearances and deferments and list, apply, track, and display by borrower and by loan the applicable entitlements allowed per federal regulations and/or IDAPP loan program policy. The information tracked includes the maximum number of months allowed, the actual number of months used, and the actual number of months remaining. Maintain transaction history per borrower account that cannot be modified or deleted.

Interface, not less than monthly or pursuant to standard industry practices with the National Student Loan Clearinghouse for in-school student deferment processing and borrower separations.

Payment Processing/Billing/Borrower Benefits/Collections

· Accept payments from borrowers and will post, reverse, repost and record back-dated payments. The system has the ability to calculate interest daily and accumulate it monthly.

· Nelnet can handle both fixed and variable interest rates, update variable interest rates quarterly per the loan type’s index and factor, calculate reduced interest rates per application of borrower repayment incentives, and recalculate the monthly payment amount due based on the change to the interest rate.

· Nelnet generates a monthly bill for every borrower in repayment. This includes months when an account may be in forbearance.

· IDAPP’s portfolio has several different borrower benefits based upon loan program and disbursement date. The system can calculate several different borrower benefits as earned. The benefits are primarily interest rate reductions triggered by payment method or consecutive payments. Nelnet tracks payment types, consecutive payments, and logic that adjusts the benefit based on forbearances. In addition, they review information that is annually sent in by the borrower to determine the appropriate benefit to apply to the borrower’s loan. Nelnet then applies the appropriate benefit to the borrower’s loan.

· Nelnet shall provide a refund once a payment creates a credit balance.

Pre-Default Servicing

· Nelnet shall make outbound calls to borrowers at designated time intervals established from time to time by IDAPP, shall generate and send delinquency letters at designated time intervals established by IDAPP.

· Nelnet reports to the national credit bureaus for both borrowers and co-signors no less than monthly, shall monitor bankruptcy filings and suspend pre-default services where appropriate and shall monitor bankruptcy discharges and dismissals and put the borrower back in repayment on a timely basis as appropriate.

Reporting to Borrower – Nelnet generates Form 1098-E, send the forms to borrowers via USPS or email and submit the required electronic forms to the Internal Revenue Service.

Customer Service representatives are available from 7:00 a.m. to 7:00 p.m. CST Monday through Friday.

Borrower Skip Tracing – Nelnet uses Lexis/Nexis Accurint skip tracing service or a commercially comparable one throughout the term of this contract and shall regularly skip trace borrowers as appropriate, such as, when a borrower correspondence is returned or when a borrower’s current address is otherwise unknown.

Reporting to IDAPP and/or a Designee

· Nelnet provides a comprehensive set of month-end management reports to IDAPP including but not limited to: Education Loans Transferred/Removed Ledger, Accounting Entry Summary Report, Portfolio Summary and Analysis (Characteristics, Delinquency, Maturity Analysis, Reconciliation), Delinquent Report and Summary, Receipt for Loans Transferred, etc.

· Nelnet prepares and provides to IDAPP the following daily report - Daily Loan Summary, weekly report – Weekly Detail Cash/Non Cash and monthly reports - Cumulative Defaults, Monthly Aging of Delinquent Accounts, Monthly Detail Trial Balance, Monthly Raw data file, Monthly Report Cash/Non Cash and Monthly Roll Rates for Delinquent Accounts.

· Nelnet provides the ability for IDAPP staff to download loan level detail via website, File Transfer Protocol (FTP) or other secure method in Microsoft Excel and/or text formats acceptable to IDAPP.

· Nelnet acknowledges that IDAPP’s private loans are secured by certain third parties that may from time to time request information related to a specific group of loans. Vendor certifies that it has the system capability to and shall provide to IDAPP and/or the secured party Designee, at IDAPP’s written request, records of only those loans that pertain to that Designee to the exclusion of all other IDAPP loans serviced by Vendor.