3CBG By the Bay 2009 Making the Switch: FFELP to Direct Lending Direct Loans and FFELP Loans.

3CBG By the Bay 2009

Making the Switch: FFELP to Direct Lending

Direct Loans and FFELP Loans

Introduction

Carol Linsley, Financial Aid Functional Consultant

SunGard Higher Education [email protected]

Agenda

Information for clients switching to Direct Loans

Overview Banner Set up Banner Day-to-Day Processing Question and Answer

Differences: Direct Loans vs. FFELP

Single lender instead of multiple lenders, guarantors, servicers, or disbursing agents

COD DL reporting similar to COD Grants reporting

FAO controls loan processing not the guarantor Return of loan funds through COD reporting

process, similar to grants Ineligible funds for one student may be used to

pay another student instead of returning funds One MPN for the student, even if enrolled in

different DL schools over the years Requires year end reconciliation

Advantages of Direct Loans Financial Aid Office controls the process Schools chooses when to disburse loans

Require acknowledgement of PN? Of COD origination?

No need to send hold and release request to guarantor

No need to import EFT roster Minimal involvement for Bursar Office Response files from COD are received in a

matter of hours

Becoming a Direct Loan Participant

Allow six months for the conversion Submit the Electronic Application for

Participation to be approved Send e-mail request to actively participate

and receive final approval Complete or update SAIG mailbox enrollment Set School up to receive DL funds via GAPS

Becoming a Direct Loan Participant

Contact COD school relations for assistance in: Updating DL contact information Sign up to receive DL Bulletins Select DL Report options Establish promissory note process Request Entrance Counseling files

Decisions to be Made

Electronic MPN or Paper? Require acknowledgement of the MPN

before disbursement? Require acknowledgement of origination

record prior to disbursement? Annual or Once only Entrance Counseling

files? Communication with Student about

changes – Remember! New DL borrowers must complete a new MPN.

Overview

To outline the set-up process and detail the procedures to set-up your Banner system

To explain the day-to-day or operational procedures for direct loans


Part 1 – Setup

Direct Loan Setup

RESOURCES TO REVIEW: SGHE Publication “COD Handbook” Loan Processing chapter, in the

Banner Financial Aid User Guide Banner Help > Online Help on that

specific form Annual Spring Banner Financial Aid

Release contains updates for federal loan processing as well as COD processing

Direct Loan Setup

OTHER HELPFUL RESOURCES: Direct Loan listserv National Direct Student Loan Coalition

http://www.directstudentloancoalition.org/

Direct Loan Reference Material available at https://www.fsadownload.ed.gov/

Direct Loan Simulations and CBT’shttp://www.nasfaa.org/publications/2008/eacodcbt102308.html

Direct Loan Setup

AR Creates Detail Codes TSADETC – Detail Code Control Form

FA Creates Fund Codes & Characteristics

RFRBASE – Fund Base Data Form RFRMGMT – Fund Management Form

Enter/View DL School Code RORCODI – COD Entity ID Rules ROAUSIO – US Specific Institutional Financial Aid

Options

RFRMGMT (Funds Management Form)

Notes for completing RFRMGMT for Direct Loan Funds- Enter Rebate Fee Percentage- Enter Loan Fee Percentage- Select Direct Loan Indicator

ROAUSIO (US Specific Institutional Options Form)- ROAINST

Complete Loan Options - Loan Type of Both (or Direct)- Indicate Multi-Year Note

Eligibility- Enter Entrance and Exit Requirements

Direct Loan Setup (cont.)

Setting the Initial Loan Status RTVLNST – Loan Status Validation

Form RPRLOPT – Loan Options Form

Prom Note Disbursement dates RPRLPRD – Loan Period Base Data

Form

RPRLOPT (Loan Options Form)

School determines if PN and/or

Disbursement is required before

extracting origination School determines if Acknowledgement of

Origination and/or Prom Note is required before disbursement

GJAPDFT for Loan Application Creation

Define parameters for the Loan Origination Process RPRLORC

This is the same process you use to set up parameters for Electronic Loans for RPRELAP

Default parameters must exist for each user who has authority to create loan applications on-line

This enables the user to create the origination record by clicking on ‘Create Loan Applications’ in the options menu on the award form (RPAAWRD).

Set-Up Forms specific to FFELP Processing

RTVCINT – Certification Initials Validation Form - Establish certification initials for each staff that processes loans, if desired

SPAIDEN – General Person Identification – create non person record for each lender, guarantor, and servicer

RPRLNDR – Lender Base Data - Establish address information about a lender as well as to link the lender ID in SPAIDEN to the Guarantor or Insurer ID in SPAIDEN

RPRLNDA – Lenders/Disbursing Agents Rules - Link a Lender ID with a Servicer ID to expedite transmission on hold/release records


Part 2 – Day to Day Operations

Day-to-Day Processes

1. Award & Originate Direct Loan

2. Submit Origination to COD

3. Execute MPN4. Submit MPN to

COD

5. Disburse Direct Loan & submit Disbursement to COD

6. Import Response from COD

7. Repeat for all Disbursements

8. Reconcile Direct Loan Funds

Booking a Loan• A booked loan is the point at which an

obligation has been established between the borrower and the Department of Education (DE) to repay a Direct Loan.

• There are 3 basic components that must be established before a loan is declared as booked by the DE

• If COD has received and accepted– a loan origination record

– a completed and signed promissory note

– a disbursement record

3CBG South 2009

ORIGINATION

LOAN ORIGINATION

• Loan records are created either on-line or in batch process

• May create for Accepted or Offered Loans– Schools that choose to send Direct Loan Promissory

Notes with the student’s award letter can create Origination records while the fund is still in an offered status.

• Batch process can be run globally or with a population selection

• Prom notes may be created immediately after loan records are created (if institution is printing PN’s)

Origination Activity - RPRLORC Process

Origination Activities

RPALORG - Federal Direct Loan Origination Form

Major blocks of RPALORG Loan Information Summary block Promissory Note Summary block Loan Disbursement Summary block Disbursement Detail block Student Data block Parent Data block

This process extracts loan originations to be sent to COD for all records in a ‘R’eady or ‘N’ot Ready status on the RPALORG form.

Can be run globally or with population selection to exclude selected students

Can be run to extract all Direct Loan activity, changes only, or loans without changes

Output CRDLxxIN Transfer File to PC to send to COD via

EdConnect REREXxx Process updates the REICODD form

Origination Activity - REREXxx Process

Origination Activities (cont.)REICODD – COD Document

Control Form

Origination Activity - RERIMxx Process

COD returns file as crdlxxop RERIMxx loads incoming file into

Banner Forms updated with this process

RPALORG REICODD


DIRECT LOAN PROMISSORY NOTES

Promissory Note Activities Creation of Direct Loan Origination RecordsRPRLORC - Loan Origination Process School Prom Note Status (Required) -

indicates whether the student is expected to complete a paper or an E-MPN promissory note. If COD is going to use the Electronic Prom Note

– choose Q If COD is going to print a Prom Note – choose R If school is going to print the Prom Note –

Choose R and follow the Promissory Note Printing procedures.

DL Day-to-Day Process in Banner

Q – E-MPNStudent executes MPN online at DL websiteSchool receives and uploads response file crpnxxop – review resulting report to

identify students who have signed an e-MPN, but do not have an RPALORG record in Banner

Promissory Note Activity COD Import Process - RERIMxx MPN/PLUS Prom Note Acknowledgement

(CRPNxxOP) file will be received, transferred and imported to Banner through the COD Import Process RERIMxx

The following forms are updated: RPALORG - Direct Loan Origination RPAPROM – Promissory Note REICODD - COD Document Control RRAAREQ – Requirements Tracking (2nd Page)

Disclosure Statement Printing RPRDSPT Process Schools usually request on the COD

Extract Process REREXxx that COD print the Disclosure Statements but if necessary a school can print them using the Disclosure Statement Print Process RPRDSPT in Banner


DIRECT LOAN DISBURSEMENTS

DL Disbursement FlowCreate Disbursement Records

REREXxx_yyyyy.xml

REREXxx

REICODD

Updated withbatch information

RPALORGREICODDRERIMxx

Import disbursementAcknowledgement file into Banner

RPALORG

Updates Record

FTP CRDLxxINfile to local PC. Send file to COD

Receive acknowledgement FTP CRDLxxOP file to DATAHOME directory

Updated by RERIMxx process

RPEDISB

Run Disbursement Process

Updates DisbursementRecord

Start

RPALORGROIDISB

Review DisbursementResults (Optional)

Disbursement Activity COD Extract Process REREXxx

This process is run to extract disbursement information for transmission to the COD

Creates the Output: CRDLxxIN Transfer File to PC to send to COD via EdConnect

Can be run to extract all Direct Loan activity, changes only, or loans without changes

Edit (Anticipated) Disbursements – automatically extracted (Regulatory requirement) prior to actual disbursements

Actual Disbursements – extracted once the scheduled disbursement date is reached and amount is in Paid Status

Disbursement Activity COD Import Process RERIMxx Files are returned from COD via

EDConnect and imported into Banner: CRDLxxOP

The following forms are updated: RPALORG - Direct Loan Origination REICODD - COD Document Control

3CBG South 2009

Changes to Direct Loans

Making Changes to Direct Loans

Change to Loan Amount before Origination is Sent

Loan Decrease after Disbursement Loan Increase after Disbursement

Note: You can increase a current origination or create a new origination for the difference

Refer to the SunGard COD Handbook for more information on Direct Loan Changes


Direct Loan Entrance and Exit Counseling

DL Entrance / Exit Activity

DECFENOP.datDLFFEXOP.dat

Receive Entrance &Exit files from COD

Upload Entrance / ExitActivity

RPRDUxxStudent Entrance / Exit

Record is updated

RPILECS

Create rules for Loading Entrance &

Exit Data

ROAUSIORTVTREQRFRMGMT

Post Entrance / Exit DataEntrance – either as a tracking

requirement via fund on RFRMGMT or batch posting

Exit – either batch posting or by running RRREXIT

RRAAREQ

Posts Exit Requirement to RRAAREQ for students needing

an exit interview

RRREXIT

Entrance / Exit Requirement Updated

RRAAREQ

Batch informationUpdated

RPIBATC

Transfer files from local PC to

Banner server

Note: these files will continue to be received in a fixed

length format. Schools will continue to use the

RPRDUxx process to upload these files into Banner.

Entrance/Exit Activity

Entrance/Exit requirements are posted on RRAAREQ form

Entrance and Exit codes as assigned to students on RRAAREQ Entrance can be posted via RFRMGMT when fund is awarded or

Batch Posted Exit Records can be posted to a student’s file via RRREXIT or

batch posted Students complete Entrance/Exit

interviews on ED website Entrance counseling data is sent as DECFENOP file Exit counseling data is sent as DLFFEXOP fileNote: Be sure to request these message classes (plain text)

in order to load them into Banner.

RPILECS (Entrance Counseling Form)


DIRECT LOAN RECONCILLIATION

DIRECT LOAN RECONCILIATION

What constitutes Reconciliation?Ending Cash Balance of -0-School’s cash drawdowns should equal booked disbursements, less cash returnedIf not equal, school should be able to identify and justify any differences

This should be done regularly on a monthly basis to avoid issues at the end of the year.

School Account Statement Activity

SAS – School Account Summary files are received via EDConnect and uploaded into Banner DSDFxxOP.DAT DSLFxxOP.DAT

Banner supports only these message classes for SAS

Direct Loan Compare Reconciliation Process (RPRCPxx)

• The Direct Loan Compare for the Reconciliation process can be used to extract required data used with the ‘Compare reports for the SAS files’ using the Direct Loan Tools for Windows software.– Files that are exported include:

• DLEXCASH — Provides data about the cash summary

• DLEXLOAN — Provides a summary of loan disbursements

• DLEXDISB — Provides data related to individual disbursement transactions

– Note: The Direct Loan Tools for Windows software is available via the FSA download Web Site. Instructions for installing, using, and support of the software are available there. This software is not supported by Sungard Higher Education.

• www.sfadownload.ed.gov

DIRECT LOAN RECONCILIATION

DL Reconciliation Tips Timing Issues – possible to not be in balance at

any given time due to the timing of drawdown's, submission of disbursement records and adjustments

Key is to identify reconciling records Closeout letter

Compares GAPS Cash Balance to COD Booked Disbursements

Received from the Department of Ed once year is complete

Successful Closeout declared if equal

Other Direct Loan Training Opportunities

Summit 2010 – Pre Summit Direct Loan Training is being planned, watch for this opportunity.

Federal monies may be available for Direct Loan Training if bill is passed to eliminate FFELP programs. Your SunGard Financial Aid Consultants are ready to provide this training.

Current Direct Lending classes are available via Webex, go to SunGard.com and click on Training.

School Resources

https://www.fsawebenroll.ed.gov/PMEnroll/index.jsp To update SAIG mailbox enrollment

https://www.g5.gov To set up school to receive funds via GAPS

http://www.ed.gov/offices/OSFAP/DirectLoan/participating.html

For full directions on becoming a DL participant http://www.ifap.ed.gov/eannouncements/1007COD

UpdatedCBTDoc.html for COD Computer Based Training


Questions and Answers


Thank You for Your Participation


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© 2003-2008 SunGard

3CBG By the Bay 2009 Making the Switch: FFELP to Direct Lending Direct Loans and FFELP Loans.

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Transcript of 3CBG By the Bay 2009 Making the Switch: FFELP to Direct Lending Direct Loans and FFELP Loans.