description: tags: Session4207

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

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• Inconsistent Identifiers

• Edit 16 Changes

• Additional Unsubsidized Indicator

• Award Discharges & MPN Expiration

Date

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Inconsistent Identifiers• New Edits only applicable to award years 2008-

2009 and forward

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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


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.

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Student

<FirstName>

Borrower

<FirstName>MUST

MATCH

MUST MATCH


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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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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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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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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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


MPN Updates


Tools and Training


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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


MPN Updates


Tools and Training


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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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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


MPN Updates


Tools and Training• Webinars

• COD Computer Based Training (CBT) Roll-Out


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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

http://ifap.ed.gov/IFAPWebApp/currentCPresentationsYearPag.jsp?p1=Additional+FSA+Presentations&p2=c









Session Outline


MPN Updates


Tools and Training


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


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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


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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


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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


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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:

[email protected]

mailto:[email protected]


Contact Information

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Lisa DiCarloDirector, COD Systems/Operations and Direct Loan [email protected](202) 377-3129

Julie AloisioManagement/Program Analyst, Direct Loan Operations [email protected](202) 377-3695

Cynthia BattleDirect Loan Servicing (Non-Default Group), [email protected](202) 377-3261





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