Post on 13-Nov-2014
Session #42
What’s New in Direct Loansfor 2008-2009
Lisa DiCarloJulie Aloisio
Cynthia Battle
Session Outline
March 2008 Release Updates
MPN Updates
Origination Fee Update Reminder
Tools and Training
Direct Loan Servicing
2
March 2008 Release Updates
• Inconsistent Identifiers
• Edit 16 Changes
• Additional Unsubsidized Indicator
• Award Discharges & MPN Expiration
Date
3
Inconsistent Identifiers• New Edits only applicable to award years 2008-
2009 and forward
4
EditEdit Code Block Message
Award Type Affected
147 R Person Identifier inconsistency for PLUS Award for Graduate/Professional Student
DL-PLUS
148 W Person First Name inconsistency for a PLUS Award for Graduate/Professional Student
DL-PLUS
149 R PersonAward
Identifier inconsistency for PLUS Award for Parent of a Dependent Undergraduate Student
All
Edit 147For a Grad PLUS award (Student and Borrower SSN
match), all identifier information must match.
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Student
<LastName>
<BirthDate>
<SSN>
Borrower
<LastName>
<BirthDate>
<SSN>
MUST MATCH
MUST MATCH
EditEdit Code Block Message
Award Type Affected
147 R Person Identifier inconsistency for PLUS Award for Graduate/Professional Student
DL-PLUS
Edit 148For a Grad PLUS award (Student and Borrower SSN
match), first name should match.
6
Student
<FirstName>
Borrower
<FirstName>MUST
MATCH
MUST MATCH
EditEdit Code Block Message
Award Type Affected
148 W Person First Name inconsistency for a PLUS Award for Graduate/Professional Student
DL-PLUS
Edit 149For a Parent PLUS award (Student and Borrower SSN do
not match), all identifier information must be different for the Student and the Borrower.
• Student and Borrower Date of Birth (DoB) change must not match• Student DoB change must not match what exists on COD for Borrower DoB
AND no Borrower DoB change tag is submitted• Borrower DoB change must not match what exists on COD for Student DoB
AND no Student DoB change tag is submitted
This can be triggered by all award programs!
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EditEdit Code Block Message
Award Type Affected
149 R PersonAward
Identifier inconsistency for PLUS Award for Parent of a Dependent Undergraduate Student
All
Edit 149 Example• Borrower B created on COD
for PLUS award
• Borrower B (Student B on Pell award) submits a Date of Birth change
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Parent PLUS
Student A 01/01/81
Borrower B 02/02/55
Pell
Student B 01/01/81
Borrower B Date of Birth now matches Student A - This will trigger Reject Edit 149!
Edit 16 Changes
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• Edit 16 has been divided into 4 new edits.• Only applicable for award years 2008-
2009 and forward
• Edit 16 will only be triggered for award years 2007-2008 and prior
Edit 16 Changes
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EditEdit Code Block Message
Award Type Affected
150 R AwardIncorrect Student Grade Level on a Direct Loan PLUS Award for Graduate/Professional Student
DL-PLUS
151 R PersonInvalid Student/Borrower SSN combination on a Direct Loan PLUS Award for Graduate/Professional Student
DL-PLUS
152 R PersonInvalid Student SSN change on a Direct Loan PLUS Award for Parent of a Dependent Undergraduate Student
All
153 R AwardInvalid Borrower SSN change on a Direct Loan PLUS Award for Parent of a Dependent Undergraduate Student
All
Edit 153 Example• Borrower B created on COD
for PLUS award
• Borrower B (Student B on ACG award) submits an SSN change
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Parent PLUS
Student A 111223333
Borrower B 777889999
ACG
Student B 111223333
Borrower B SSN now matches Student A - This will trigger Reject Edit 153!
Edit 16 ChangesA new Edit will be added
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EditEdit Code Block Message
Award Type Affected
159 R AwardIncorrect Student Grade Level for a Parent PLUS award
DL-PLUS
• Only applicable for award years 2008-2009 and forward
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<DependencyStatusCode>• Required for all Direct Loans
• Valid values: “D” or “I”• Blank or other values will trigger Reject Edit 996
<AdditionalUnsubsidizedIndicator>• Required for Unsubsidized Direct Loans• Valid values: “true” or “false”
• Blank or other values will trigger Reject Edit 998
• Edit 994 will be triggered for missing tags
Additional Unsubsidized Indicator
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<DLLoanInformation LoanKey="1“>
<!—Loan Information-->
</DLLoanInformation>
<DLUnsubsidized>
<FinancialAwardYear>
<CPSTransactionNumber>
<FinancialAwardAmount>
<LoanKey>
<AdditionalUnsubsidizedIndicator>
<DependencyStatusCode>
<FinancialAwardNumber>
<FinancialAwardID>
<FinancialAwardCreateDate>
<Disbursement>
<!—Disbursement Information-->
</Disbursement>
</DLUnsubsidized>
Loan Key
Award
Disbursement
Additional Unsubsidized Indicator
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EditEdit Code Block Message
Award Type Affected
154 R AwardDependency Status set to D and Grade Level greater than or equal to 6
DL
156 R AwardDependency Status set to I and Additional Unsubsidized Indicator set to true
DL
157 R AwardSum of Award Amounts exceeds Base Annual Loan Limit
DL
158 R AwardHPPA Indicator set to true and Grade Level less than 6
DL
Additional Unsubsidized IndicatorNew Edits
Annual Loan Limits
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Grade Level
Base Annual Loan Limit
Combined Annual Loan Limit
0, 1 3,500 7,500
2 4,500 8,500
3, 4, 5 5,500 10,500
6, 7 8,500 20,500
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Additional Unsubsidized IndicatorEdit 157 Example
Award Type NumberDependenc
y Status AUIAward
AmountAward Result Reject Edit
Sub 001 D N/A 4500 A N/A
Unsub 002 D false 6000 R 157
Unsub 002 D false 1000 A N/A
Unsub 002 D true 6000 A N/A
A series of origination and maintenance records are submitted for a Student in Grade Level 5.
His base limit is $5,500, combined limit is $10,500.
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Additional Unsubsidized IndicatorEdit 157 & Edit 039If the highest applicable loan limit is greater than the Base Annual Loan Limit, then the COD System will employ Reject Edit 039 logic.
Suppose series of origination and maintenance records are submitted for a Student in Grade Level 5.
Award Type NumberDependenc
y Status AUIAward
AmountAward Result Reject Edit
Sub 001 D N/A 4500 A N/A
Unsub 002 D true 6000 A N/A
Unsub 002 D true 6100 R 039
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Award Discharges, MPN Expiration Date
Upon award discharge, the COD system will update associated MPN(s) as follows:
Discharge Code
Message MPN Expiration Dates Updated for…
D Death All MPNs for Borrower
GUnauthorized Signature/Unauthorized Payment
MPN associated with specified loan
I Identity TheftMPN associated with
specified loan
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Discharge ReversalRecalculating MPN Expiration Date
If MPN associated with the discharged loan…
MPN Expiration Dates Will be recalculated as follows…
Not linked to any loans with funded disbursements or is unlinked
365 days from MPN Received Date
Linked to any loan with funded disbursements
3,650 days from MPN Received Date
(Due to death) is linked to any awards with accepted and funded disbursements
3,650 days from MPN Received Date
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Discharge ReversalRecalculating MPN Status
Condition(s):Updated MPN
Status
New MPN Expiration Date <= Current Processing Date Inactive
Recalculated MPN Expiration Date > Current Processing Date
MPN is linked to an award Active
MPN not linked to an award Pending
DL Rebuild File Impacts• New fields added:
• Additional Unsubsidized Indicator (position 164)
• MPN Expiration Date (positions 926-933, length = 8)
• Pre-Professional Coursework Indicator (position 934)
• Positions 926-958 were previously filler• No change to record length
• Associated updates will be made to DL Tools
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Session Outline
March 2008 Release Updates
MPN Updates
Origination Fee Update Reminder
Tools and Training
Direct Loan Servicing
23
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Requiring MPNs Before Disbursement
Beginning in March 2008, all schools will be required to have an accepted MPN on file at COD before actual disbursements can be accepted for the associated Direct Loan award.
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Requiring MPNs Before Disbursement
• Advance Funded SchoolAdvance Funded School– Anticipated Disbursement handling is not
changed– Actual Disbursements will be rejected if there
is no MPN on the system– May still draw down
• Push Cash SchoolPush Cash School– No Impact: Actual Disbursements will be
rejected if there is no MPN on the system
PLUS MPN Redesign• Incorporates HERA changes
– Still ONE MPN for all PLUS borrower types (parent and graduate/professional student)
• New OMB form expiration date • Incorporates Borrower’s Rights and
Responsibilities (BRR)
COD will not accept older MPN versionafter March 1, 2008!!
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Session Outline
March 2008 Release Updates
MPN Updates
Origination Fee Update Reminder
Tools and Training
Direct Loan Servicing
27
Reminder! Origination Fee UpdateAs of July 1, 2008,
the origination fee will be 2.0%
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Origination Fee Percentage is based on Earliest Disbursement Date, NOT Award Year!
Fee % Earliest Disbursement Date Range
3.0 Prior to 2007-07-01
2.5 2007-07-01 to 2008-06-30
2.0 2008-07-01 to 2009-06-30
1.5 2009-07-01 to 2010-06-30
1.0 2010-07-01 and forward
Origination Fee Edits
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EditEdit Code Block Message
140 R Award Incorrect Origination Fee Percent on New Awards
141 R AwardCannot change the Origination Fee Percent on an Active Loan
142 R Award Invalid Origination Fee Percent on Award Changes
143 R AwardDisbursement Net, Fee, and/or Rebate Amounts are Incorrect based upon the Origination Fee Percentage
144 R DisbDisbursement Dates do not match Origination Fee Percent on file
Session Outline
March 2008 Release Updates
MPN Updates
Origination Fee Update Reminder
Tools and Training• Webinars
• COD Computer Based Training (CBT) Roll-Out
Direct Loan Servicing
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COD CBT Roll-Out
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An exciting new CBT will be released by COD to familiarize users with the capabilities of the COD System!
Now Available!
Webinars
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Internet Training and Webinarshttp://ifap.ed.gov/IFAPWebApp/currentCPresentationsYearPag.
jsp?p1=Additional+FSA+Presentations&p2=c
Session Outline
March 2008 Release Updates
MPN Updates
Origination Fee Update Reminder
Tools and Training
Direct Loan Servicing
33
Direct Loan Servicing Updates
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New Direct Loan Repayment Plans are in Effect!
• Changes as result of Higher Education Reconciliation Act (HERA) of 2005
• Rollout Strategy
• Repayment Plan Terms
Roll Out Strategy
In RepaymentIn Repayment Selection PriorSelection Prior Selection AfterSelection After
Borrowers who selected a
repayment plan prior to
implementation will remain on their pre-
HERA selection (even if they have
not entered repayment)
Borrowers will make a
repayment plan selection from one of the new
repayment plans.
Borrowers who are paying under one of the pre-HERA plans will see no change and will continue to pay
under the terms of their plan.
Direct Loan Repayment Plans
Direct Loan Repayment Plans
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• Available to all Direct Loan borrowers
• Fixed payments
• Maximum 10-year repayment period for Direct Subsidized, Direct Unsubsidized and Direct PLUS Loans
• Maximum 10 – to – 30 year repayment period for Direct Consolidation Loans, depending on total education loan debt
Standard
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• Available to all Direct Loan borrowers
• Graduated payments
• Maximum 10-year repayment period for Direct Subsidized, Direct Unsubsidized and Direct PLUS Loans
• Maximum 10 – to – 30 year repayment period for Direct Consolidation Loans, depending on total education loan debt
Graduated
Direct Loan Repayment Plans
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Direct Loan Repayment Plans
Maximum Repayment Periods for Direct Consolidation Loan Borrowers Under the Standard and Graduated Repayment Plans
Total Education Loan Indebtedness Maximum Repayment Period
Less than $7,500 10 years
$7,500 to $9,999 12 years
$10,000 to $19,999 15 years
$20,000 to $39,999 20 years
$40,000 to $59,999 25 years
$60,000 or more 30 years
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• Available only to new Direct Loan borrowers on or after October 7, 1998 (all loan types) with more than $30,000 in outstanding Direct Loan debt
• Payments: Fixed or Graduated payments
• Maximum 25 - year repayment period regardless of loan type or amount of outstanding Direct Loan debt
Extended
Direct Loan Repayment Plans
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• Available to Direct Subsidized, Direct Unsubsidized, and Direct Consolidation Loan borrowers (including Direct Consolidation Loan borrowers who have consolidated Direct PLUS or Federal PLUS Loans)
• Not available to Direct PLUS Loan borrowers
• Variable payments based on income and loan debt
• Maximum 25 – year repayment period
ICR
Direct Loan Repayment Plans
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Related Direct Loan Sessions
Session #4Title IV Funding to Schools: From COD to GAPS
Session #24 COD Web Hands On
Session #40 A Direct Loan Primer
Session #41Unlocking the Potential of Direct Loan Reports
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Questions or Comments?We appreciate your feedback and comments.
Direct Loan Operations Team can be reached via e-mail at:
dlops@ed.gov
Contact Information
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Lisa DiCarloDirector, COD Systems/Operations and Direct Loan Operationslisa.dicarlo@ed.gov(202) 377-3129
Julie AloisioManagement/Program Analyst, Direct Loan Operations julie.aloisio@ed.gov(202) 377-3695
Cynthia BattleDirect Loan Servicing (Non-Default Group), Directorcynthia.battle@ed.gov(202) 377-3261