The Request for Information (RFI) or Request for Proposal (RFP) process is quickly becoming an industry standard for schools. This year will prove to be interesting, thanks to the legislative changes creating uncertainty in the industry. Over the next several months, we will provide you with insight to the RFI/RFP process. This article, the first part of the series, deals with timing your RFI/RFP process.
When asked to provide terms for the upcoming 2008/2009 academic year, keep in mind that most lenders may not know what their terms will be yet. In an effort to provide a timely response to a school’s RFI/RFP, lenders may provide information that is “subject to change.”
A number of companies are offering schools their services in creating RFIs/RFPs. While they market themselves as a non-biased solution for evaluating lenders, many of these companies often lack experience and a personalized approach.
The first question you should ask when creating an RFP/RFI is: “What is the school hoping to accomplish with this RFP?”
Many companies write up a generic RFI/RFP they send out to hundreds of lenders, many of whom don’t even do business with the school. Make sure that your RFP/RFI speaks to your school’s needs.
What does subject to change mean? Lenders may provide terms and rates as they appear today, and take a “wait and see” approach before they announce their renewed terms after the first of the year. This means the terms will look more favorable than what they will be in the new year because of the impact of the College Cost Reduction and Access Act (CCRAA). Remember, all FFELP lenders will be affected. Because many terms may be subject to change, we encourage schools to confirm terms before making lender list selections or publishing anything for students.
You can see how FFELP lenders will be affected by CCRAA here.
Ideally, schools may want to wait until January to release an RFI/RFP so lenders will have the accurate term information available. If the RFI/RFP process is new for your school, your first step is to set up an internal process:
- Decide who from your school will be involved in the development of your RFI/RFP content and process.
- Develop a time frame beginning with internal development and ending with the evaluation process.
- Create an evaluation system – what are the most critical elements of the RFI/RFP?
- Set up a realistic deadline for a lender to respond – ideally, three to four weeks.
- Decide how you will deal with lenders not having accurate information at the time of the RFI/RFP – for example, create a follow-up step and contact lenders later in the year to go over terms again.
Our revised RFI/RFP template will be available soon on our website to use as a reference. In the meantime, you can view the current version of the template.
This article is the first part in a series on helping you create a strong lender RFI/RFP. If you have any questions or would like to discuss the recent changes, please contact your school representative at 1-866-902-6038.