Direct Loan Source Interviews
Anna M. Griswold
The Direct Loan Source had the opportunity to sit down with Anna M. Griswold, Assistant Vice President of Undergraduate Education and Executive Director for Student Aid at the Pennsylvania State University, to talk about Penn State’s recent transition to the Direct Loan Program.
DL Source: Can you describe the transition process?
Anna: We made the decision to convert to the Direct Loan (DL) Program in March of 2008 and we wanted to start DL for summer school. So, we had about 4 months to get ready.
It was helpful that we were already familiar with COD for Pell Grants. We also had the full support of our administration and were given priority for the systems conversion work. We had great working relationship with our Bursar and Student Accounting offices, which was essential.
With a 25-year-old homegrown system, the conversion was time consuming but not difficult. One of our biggest challenges was that our central administrative support systems did not have XML fully implemented and that had to be done quickly before the conversion could proceed. If we had a vendor supported system for student aid, I believe the transition would have gone even faster.
DL Source: How many additional staff did you hire to complete the transition to the Direct Loan Program?
Anna: Penn State hired NO new staff to manage the conversion. Existing staff handled the entire conversion. In fact, the Office of Student Aid had two fewer staff positions during the conversion period and one staff member on medical leave.
DL Source: But at Penn State, you must have a large student aid staff which made managing the transition easier?
Anna: The Office of Student Aid has 62 staff members including 7 IT staff that manage Penn State's homegrown student aid system (no vendor supported software). We have 68,000 aid recipients compared to 62 staff. That's a 1:1,097 staff to aid recipient ratio. Our office centrally processes aid for 24 campuses, and last year, we disbursed $953 million in total aid, half of which was in federal loans.
DL Source: How were your students impacted by the conversion?
Anna: We kept our students informed of the change to DL and explained how they would receive their loans in the future. It was a big task to ensure returning borrowers understood that they needed to sign a new master promissory note. But had we stayed in FFELP, the task would have remained the same; as a result of lenders exiting the FFEL program, many students would have been required to sign a new promissory note with another lender. We had no resistance from our students. DL works very efficiently for them and when they need to make changes to their loan amount, they know that this is extremely efficient and can be handled by our staff.
DL Source: How much additional funding did your office need to complete the conversion to the Direct Loan Program?
Anna: Penn State transitioned to Direct Lending utilizing its existing Student Aid budget for operational and staffing expenditures.
DL Source: Did you hire outside vendors to provide services to help manage the transition?
Anna: Yes, Penn State did use the services of Edfinancial, one of our FFELP lending partners, already trained to take parent questions about how PLUS works at Penn State. Penn State engaged this service to ensure prompt handling of possible higher than normal phone call volume due to the change to direct lending. The calls directed to the call center were primarily those from parents seeking assistance with the Direct Loan PLUS process.
In hindsight, this service was not needed and calls could have been managed by existing staff. The anticipated higher than normal call volume did not materialize. While the cost did not exceed the normal range of budgetary costs at Penn State for a given year, this expenditure was not essential to Penn State's success in converting to Direct Lending.
DL Source: Can you describe your experience working with the Department?
Anna: We had exceptional service from Federal Student Aid. We had dedicated staff assigned to work with us. They were very prompt in responding to our questions and they were very knowledgeable. The DL Technical manuals were also a great tool.