Jay Leno called it a "hairball." And he was right. The chart depicting the "flow" of the process students were expected to navigate to borrow money for college was a bureaucratic nightmare. Blue, green, red, and hot pink lines slithered over the paper, crisscrossing and merging at random points, colliding as they exited organizational boxes marked "School," "Guaranty Agency," and "Federal Reserve." The process was a perfect foil for a comedianís late-night attack on government-as-usual.
Reinventing the Process
The first step in reinventing any process is identifying the person who can make change happen. Meet Greg Woods, Chief Operating Officer in the Department of Educationís Office of Student Financial Aid (SFA). Woods is a bona fide "change agent," the person selected, committed, and empowered to fix the "hair ball" process of applying for student financial assistance.
Woods was new to SFA, but it didnít take him long to see that the process was hopelessly intricate, riddled with red tape, and confounded by procedural requirements that scared-off some students and frustrated those who wanted to make it work. A "hairball," indeed!
SFAís goal was simple. "We want to create a system that focuses on making students aware of their responsibilities as borrowers, a system that educates them about borrowing money as well as paying it back," said Woods.
Borrowing from successful business practices, Woods and the SFA team went directly to their customers: student loan applicants and their parents. SFA conducted more than 200 "listening sessions" across the country, collecting and analyzing more than 8,000 customer comments. But, the fact-finding didnít stop there. The SFA team talked to every stakeholder group who might contribute to, and benefit from, change: current loan-holding students and parents; high school counselors; college and university officials, lending organizations; and outreach organizations -- civic, church, and other mentoring groups. SFA asked these stakeholders three questions about the loan application process:
What doesnít work?
What should we change?
The answers were just what Woods expected. Students and other stakeholders wanted a performance-based organization, service equal to the best in business, emphasis on partnership, and SFAís commitment to organizing and managing like the best in business. Woods and his team are making those changes happen.
Meeting Student Needs: On-Line Loan Applications
The SFA "reinvention" brought swift changes. First, students and parents now can apply for loans using a simple, electronic, on-line loan application form. In the past, a late decision to apply for a loan meant relying on regular mail services subject to delays. Today, the application process, including submission, takes only minutes, and for some students, this change alone has made a critical difference in jump-starting their college education.
Second, SFA is now treating students like the real-world customers they are. The SFA instructions, applications, and educational materials are easier to read and understand. Thereís a simplified way to ask questions and get the right answers, and thereís even a simple way for students to make complaints and suggestions. Most important, SFA and its partners have made it easier for borrowers to pay back their loans.
Partnering for Success
Recognizing that schools are stakeholders in the student loan business, SFA also is tailoring its services to meet the needs of individual educational institutions. SFA is assigning to each school an "account manager" who can handle all its needs, and they are creating an SFA "University" to train school officials, administrators and SFA employees.
SFA also is working with its financial partners, the lending institutions that underwrite two-thirds of all student loans. These institutions, too, will have single points of contact within SFA, a "customer service team" with the know-how and the authority to solve problems. SFA and its financial partners also are creating a debt-counseling program for borrowers, a service to educate students in debt management and supply them with the financial planning information they need to head-off loan default and financial hardship.
A truly reinvented organization ensures that its services are available to all. Greg Woods and his SFA team are working aggressively to make sure their services are accessible to physically challenged customers, potential borrowers whose first language is not English, and others with disabilities, learning difficulties, and special needs. Technology is playing a critical part in achieving these goals, and SFA is working toward electronic systems that will make accessing loans and paying them back as easy as logging on to a home computer.
For more information, contact Karen Santos Freeman at (202) 260-6536, or visit the following Internet sites:
Department of Education (general information)
Department of Education Student Financial Assistance Information
Department of Education Direct Loan Information
On-line Free Application for Federal Student Aid (FAFSA)
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