Questions for HESAA – July 13, 2016 1. Death Discharge Information Policy: The following questions relate to several emails that you will find below: Email 1: According to the email above, a program officer at HESAA instructed staff members to not give out information to families of deceased borrowers on loan forgiveness unless they ask. Specifically: “Families of deceased borrowers (or surviving cosigners) must inquire if HESAA has a policy on loan forgiveness. We should not be volunteering this information.” This email was sent by Program Officer Robert Laird to agency employees on May 25, 2016. Email 2: Robc'l Lu r'J SECS HLSAA Russell Archer SFCO HE SAA (i SAA 0613 2013 0153 PM NJC Loan FOrglveness passed aw.? .le r- FYI NJ Class does not have a loan forgrveness lor student'student borrowers Who dred whlle In school Regulatrons state cos:gner 0r coborrower becomes the next FOSDOHSIDIG party and they are requued to remlt CoslgnerSJ'Co-bonowers are to apply for lmanclal If the borrower dred, However Exec Management revrews loan f0rgrveness for student'sludent borrowers who dred whrle school Died while in School? ll student DOrrower passes away WHILE enrolled In school. cos:gners (co-borrowers/Jomt c05lgners) automatrcally become the next party to remlt payment Occasnonally. we do recelve requests for Loan lorglveness due to death of a student/student borrower. If a cos:gner wants to apply tor Loan Forglveness adv:se the cos:gner o! the followmg gner automatically become the next Terms and state upon death of a borrower. the cos: responsible party on the loan Student 0r Student Borrower had to be enrolled In school at least half time or full time at the tlme of death Email 2 cont: As it states in the email: “Only advise the cosigner/coborrower about loan forgiveness when asked.” The above email was sent by Robert Laird to agency employees in June 2013. Questions: 1) The instructions from staff clearly state to only provide information to borrowers when asked. What do you make of these emails? 2) What is the agency’s policy on sharing information on programs that might help struggling borrowers (for example, when the primary borrower dies)? 3) What would happen to a cosigner of a deceased borrower who could potentially qualify for the agency’s standard of loan forgiveness yet they were not informed it was an option? 4) What is the financial limit for loan forgiveness: what income must a family earn to qualify for loan forgiveness after a borrower dies? Or what tax bracket must a family fall into to qualify for loan forgiveness after a borrower dies? 2. Hurricane Sandy Information Policy: The following questions relate to emails and documents: According to Executive Director Gabrielle Charette’s report to HESAA’s board and the public on January 23, 2013, following Hurricane Sandy, the agency “suspended the reporting of all delinquencies to the credit bureaus.” Ms. Charette said in her report: “No one who made a late payment has to worry about their credit rating being adversely affected.” See page 7 of the meeting minutes here: http://www.hesaa.org/BoardMeetingMinutes/01.23.13_Minutes.pdf But according to emails, that seems not to be the case. In the month following Sandy (November 2012) adverse credit reporting was only removed when a borrower disputed it. For example, this email in August 2013 says that reportings from Nov 2012 can be removed when disputed. Questions: 1) What do you make of the emails and the Executive Director report? 2) Following Hurricane Sandy, why was credit reporting not completely suspended as Ms. Charette reported to the public on January 23, 2013? 3) How many individuals contacted the agency following Hurricane Sandy to dispute their credit report and had their credit report successfully cleared of adverse reporting? 4) HESAA put a note on its website following Hurricane Sandy, telling students to contact the agency if they were struggling with payment because of the storm. What if students did not see that note on the website? How would they know to contact the agency and dispute any adverse credit reporting? Ms. Waldman, As we previously conveyed to you, your initial New York Times story on HESAA was a deliberate distortion and misrepresentation of HESAA and its NJCLASS program. You ignored the extensive amount of information we provided to you, selectively omitted our remarks and even distorted the facts. Your conduct obliterated the line between responsible journalism and extreme activism, and your appearances on news programs to actively peddle your distortions is disturbing. Perhaps you and your editors should review the CBS approach to this story to get a sense of what a balanced news account looks like. Because of your conduct, we insist that you make our full statement available to your readers and that you not selectively edit this response to suit your narrative as we respond to your continued questions about our policies and practices. HESAA and its staff are always disheartened to learn when hardship and tragedy befall a borrower, particularly when it involves a loss of life, and we will always express condolences in such matters as well as ascertain and respond to the needs of surviving family members. All co-signers of a deceased borrower who express an inability to make payments on the loan or who are interested in having the loan considered for forgiveness are immediately sent the appropriate application. That is standard practice and, indeed, was codified as formal policy. (See Policy adopted by HESAA Board on October 22, 2015 at a public meeting.) Co-signers of deceased borrowers, however, contact HESAA for a range of reasons beyond an inability to make payments. Sometimes they wish to notify us of a change of address for the receipt of billings or to request a brief forbearance to resolve the estate of the deceased. Other times it may be to inquire about debt consolidation or early payoff of the loan, and at times about the inability to pay the debt. The approximately 200 people working at HESAA respond to these inquiries on an individual basis, depending upon the inquiry. The emails you shared with us do not accurately reflect the Authority?s policy or practice on loan forgiveness, insofar as you are suggesting they imply a line-staffer at HESAA may have instructed other employees to respond to such inquiries in a rote and indiscriminant manner, or to withhold information that is relevant to an inquiry. In fact, between July 2012 and July 2016, 189 loans totaling $2.386 million were forgiven due to death/disability, including 47 loans totaling $560,086 where the student borrower passed away or became disabled and the cosigner was released. Should it ever come to our attention that an employee has mistakenly conveyed or misrepresented any HESAA policy to the public or to fellow employees, we can and will provide retraining to correct the situation. Regarding Hurricane Sandy, no delinquencies were reported to any credit agency during the month of November, 2012. Subsequently, if any storm-related delinquencies were inadvertently reported, they were brought to staff?s attention through a dispute process, upon which staff was directed to remove the delinquency. The internal document you have presented to us demonstrates clearly that delinquencies caused by Hurricane Sandy were to be immediately removed. Please know that not all of New Jersey was similarly affected by Sandy, so not every request was treated similarly either. It depended upon where one lived and how their area was affected. Additionally, the message on our website that you refer to ran for several months from the beginning of November 2012, (a few days after Sandy once HESAA got power restored) until May, 2013. The standard for a delinquency dispute was very liberal. Finally, in addition to a prominent message placed on our website for Sandy-impacted borrowers, a message on our 800 toll free phone number, and a notice sent to every borrower?s personal NJCLASS portal, a written notice was included about the Sandy delinquency policy in all bill statements we issued, so it was not necessary for a student to see only the website. Follow-Up Questions for HESAA – July 20, 2016 “The emails you shared with us do not accurately reflect the Authority’s policy or practice on loan forgiveness, insofar as you are suggesting they imply a line-staffer at HESAA may have instructed other employees to respond to such inquiries in a rote and indiscriminant manner, or to withhold information that is relevant to an inquiry….Should it ever come to our attention that an employee has mistakenly conveyed or misrepresented any HESAA policy to the public or to fellow employees, we can and will provide retraining to correct the situation.” 1) The emails enclosed in the previous email show that at least twice, a staffer instructed other agency employees to only advise a cosigner/coborrower about loan forgiveness when asked (in one email, the staffer clearly states, “We should not be volunteering this information.”). The Assistant Director of Loan Servicing Russell Archer was cc’ed on both of the emails.  In either case, was retraining provided as you described?  If this email was not correct HESAA policy, could you send me a copy of any emails in response to Robert Laird’s instructions to staff, clarifying the policies? HESAA Response: In person retraining was provided. “In fact, between July 2012 and July 2016, 189 loans totaling $2.386 million were forgiven due to death/disability, including 47 loans totaling $560,086 where the student borrower passed away or became disabled and the cosigner was released.” 2) Of the 47 loans where the student borrower passed away or became disabled and the cosigner was released, how many individual borrowers (not loans) passed away or became disabled and whose cosigners/coborrowers were released? HESAA Response: 35 individual borrowers 3) How many cosigners/coborrowers in total during this time (July 2012-July 2016) requested assistance and were denied? HESAA Response: 15 How many borrowers in total during this time (July 2012-July 2016) died or said they were disabled? HESAA Response: 50 “Regarding Hurricane Sandy, no delinquencies were reported to any credit agency during the month of November, 2012. Subsequently, if any storm related delinquencies were inadvertently reported, they were brought to staff’s attention through a dispute process, upon which staff was directed to remove the delinquency.” 4) If no delinquencies were reported to any credit agency during the month of November 2012, how could any delinquencies “inadvertently” be reported? 5) Chris Gonzalez, whose story was featured in my last article, was reported late on his payment in both November 2012 and December 2012. As we mentioned previously, according to Executive Director Gabrielle Charette’s report to HESAA’s board and the public on January 23, 2013, following Hurricane Sandy, the agency “suspended the reporting of all delinquencies to the credit bureaus.” Ms. Charette said in her report: “No one who made a late payment has to worry about their credit rating being adversely affected.” How do you explain the late payment reporting in November 2012? HESAA Response to 4 and 5: Because of your reporting and conduct to date, we insist that you make our full response to these questions available to your readers and that you not selectively edit this response to suit your narrative. HESAA conducted a thorough review of our automated electronic data transmission programs from 2012-2013 and discovered that the automated file of credit reporting data for November, 2012 was not stopped as had been directed by the Executive in the early days following the storm. (This measure was just one of several steps HESAA took in the wake of Hurricane Sandy as noted in the report which is attached.) Nevertheless, from November, 2012 to May, 2013, a message appeared on the HESAA website advising distressed borrowers to contact HESAA for payment relief; a message was placed on our 800 toll free phone number; a notice was sent to every borrower’s personal NJCLASS portal account; and a written notice was included about our Sandy delinquency policy in all bill statements we issued. Furthermore, any request for a storm-related delinquency to be removed between November, 2012- May, 2013 was honored.