Session #42

What’s New in Direct Loans for 2008-2009 Lisa DiCarlo Julie 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 20082009 and forward
Edit 147 Edit Code R Block Person Message Identifier inconsistency for PLUS Award for Graduate/Professional Student First Name inconsistency for a PLUS Award for Graduate/Professional Student Identifier inconsistency for PLUS Award for Parent of a Dependent Undergraduate Student Award Type Affected DL-PLUS

148

W

Person

DL-PLUS

149

R

Person Award

All

4

Edit 147
For a Grad PLUS award (Student and Borrower SSN match), all identifier information must match. Student <LastName> <BirthDate> <SSN>
Edit 147 Edit Code R Block Person

MUST MATCH

Borrower <LastName> <BirthDate> <SSN>
Award Type Affected DL-PLUS

Message Identifier inconsistency for PLUS Award for Graduate/Professional Student

5

Edit 148
For a Grad PLUS award (Student and Borrower SSN match), first name should match. Student <FirstName> Borrower <FirstName>

MUST MATCH

Edit 148

Edit Code W

Block Person

Message First Name inconsistency for a PLUS Award for Graduate/Professional Student

Award Type Affected DL-PLUS

6

Edit 149
For 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!
Edit 149 Edit Code R Block Person Award Message Identifier inconsistency for PLUS Award for Parent of a Dependent Undergraduate Student Award Type Affected All

7

Edit 149 Example
• Borrower B created on COD for PLUS award Parent PLUS Student A Borrower B Pell Student B 01/01/81 02/02/55

• Borrower B (Student B on Pell award) submits a Date of Birth change

01/01/81

Borrower B Date of Birth now matches Student A This will trigger Reject Edit 149!

8

Edit 16 Changes
• Edit 16 has been divided into 4 new edits.
• Only applicable for award years 20082009 and forward

• Edit 16 will only be triggered for award years 2007-2008 and prior

9

Edit 16 Changes
Edit 150 Edit Code R Block Award Message Incorrect Student Grade Level on a Direct Loan PLUS Award for Graduate/Professional Student Invalid Student/Borrower SSN combination on a Direct Loan PLUS Award for Graduate/Professional Student Invalid Student SSN change on a Direct Loan PLUS Award for Parent of a Dependent Undergraduate Student Invalid Borrower SSN change on a Direct Loan PLUS Award for Parent of a Dependent Undergraduate Student Award Type Affected DL-PLUS

151

R

Person

DL-PLUS

152

R

Person

All

153

R

Award

All

10

Edit 153 Example
• Borrower B created on COD for PLUS award Parent PLUS Student A 111223333 Borrower B 777889999 ACG Student B 111223333

• Borrower B (Student B on ACG award) submits an SSN change

Borrower B SSN now matches Student A This will trigger Reject Edit 153!

11

Edit 16 Changes
A new Edit will be added
Edit 159 Edit Code R Block Award Message Incorrect Student Grade Level for a Parent PLUS award Award Type Affected DL-PLUS

• Only applicable for award years 2008-2009 and forward

12

Additional Unsubsidized Indicator
<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
13

Additional Unsubsidized Indicator
<DLLoanInformation LoanKey="1“> <!—Loan Information--> </DLLoanInformation> <DLUnsubsidized> <FinancialAwardYear> <CPSTransactionNumber> <FinancialAwardAmount> <LoanKey> <AdditionalUnsubsidizedIndicator> <DependencyStatusCode> <FinancialAwardNumber> <FinancialAwardID> <FinancialAwardCreateDate> <Disbursement> <!—Disbursement </Disbursement> </DLUnsubsidized> Information-->

Loan Key Award

Disbursement

14

Additional Unsubsidized Indicator New Edits
Edit 154 Edit Code R Block Award Message Dependency Status set to D and Grade Level greater than or equal to 6 Dependency Status set to I and Additional Unsubsidized Indicator set to true Sum of Award Amounts exceeds Base Annual Loan Limit HPPA Indicator set to true and Grade Level less than 6 Award Type Affected DL

156

R

Award

DL

157

R

Award

DL

158

R

Award

DL

15

Annual Loan Limits
Grade Level
0, 1 2 3, 4, 5 6, 7

Base Annual Loan Limit
3,500 4,500 5,500 8,500

Combined Annual Loan Limit
7,500 8,500 10,500 20,500

16

Additional Unsubsidized Indicator Edit 157 Example
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.
Award Type Number Dependency Status AUI Award Amount Award Result Reject Edit

Sub Unsub Unsub Unsub

001 002 002 002

D D D D

N/A false false true

4500 6000 1000 6000

A R A A

N/A 157 N/A N/A

17

Additional Unsubsidized Indicator Edit 157 & Edit 039
If 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 Number Dependency Status AUI Award Amount Award Result Reject Edit

Sub Unsub Unsub

001 002 002

D D D

N/A true true

4500 6000 6100

A A R

N/A N/A 039

18

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

G

Unauthorized Signature/Unauthorized Payment

MPN associated with specified loan MPN associated with specified loan

I

Identity Theft

19

Discharge Reversal

Recalculating 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 Linked to any loan with funded disbursements (Due to death) is linked to any awards with accepted and funded disbursements

365 days from MPN Received Date

3,650 days from MPN Received Date

3,650 days from MPN Received Date

20

Discharge Reversal

Recalculating MPN Status
Updated MPN Status

Condition(s):

New MPN Expiration Date <= Current Processing Date Recalculated MPN Expiration MPN is linked to an award Date > Current Processing Date MPN not linked to an award

Inactive Active Pending

21

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

22

Session Outline
March 2008 Release Updates MPN Updates Origination Fee Update Reminder Tools and Training Direct Loan Servicing

23

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.

24

Requiring MPNs Before Disbursement
• Advance 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 School
– No Impact: Actual Disbursements will be rejected if there is no MPN on the system

25

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 version after March 1, 2008!!

26

Session Outline
March 2008 Release Updates MPN Updates Origination Fee Update Reminder Tools and Training Direct Loan Servicing

27

Reminder! Origination Fee Update
As of July 1, 2008, the origination fee will be 2.0%
Fee % 3.0 2.5 2.0 1.5 1.0 Earliest Disbursement Date Range Prior to 2007-07-01 2007-07-01 to 2008-06-30 2008-07-01 to 2009-06-30 2009-07-01 to 2010-06-30 2010-07-01 and forward

Origination Fee Percentage is based on Earliest Disbursement Date,

NOT Award Year!

28

Origination Fee Edits
Edit 140 Edit Code R Block Award Message Incorrect Origination Fee Percent on New Awards Cannot change the Origination Fee Percent on an Active Loan Invalid Origination Fee Percent on Award Changes Disbursement Net, Fee, and/or Rebate Amounts are Incorrect based upon the Origination Fee Percentage Disbursement Dates do not match Origination Fee Percent on file

141

R

Award

142

R

Award

143

R

Award

144

R

Disb

29

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
30

COD CBT Roll-Out
An exciting new CBT will be released by COD to familiarize users with the capabilities of the COD System!

Now Available!

31

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

32

Session Outline
March 2008 Release Updates MPN Updates Origination Fee Update Reminder Tools and Training Direct Loan Servicing

33

Direct Loan Servicing Updates
New Direct Loan Repayment Plans are in Effect! • Changes as result of Higher Education Reconciliation Act (HERA) of 2005 • Rollout Strategy • Repayment Plan Terms

34

Direct Loan Repayment Plans
Roll Out Strategy
In Repayment Selection Prior Selection After

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.

Borrowers who selected a repayment plan prior to implementation will remain on their preHERA selection (even if they have not entered repayment)

Borrowers will make a repayment plan selection from one of the new repayment plans.

Direct Loan Repayment Plans

Standard

• 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

36

Direct Loan Repayment Plans

Graduated

• 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

37

Direct Loan Repayment Plans
Maximum Repayment Periods for Direct Consolidation Loan Borrowers Under the Standard and Graduated Repayment Plans
Total Education Loan Indebtedness Less than $7,500 $7,500 to $9,999 $10,000 to $19,999 $20,000 to $39,999 $40,000 to $59,999 $60,000 or more Maximum Repayment Period 10 years 12 years 15 years 20 years 25 years 30 years

38

Direct Loan Repayment Plans
• 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

39

Direct Loan Repayment Plans
• 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

40

Related Direct Loan Sessions
Session #4 Session #24 Session #40 Session #41 Title IV Funding to Schools: From COD to GAPS COD Web Hands On A Direct Loan Primer Unlocking the Potential of Direct Loan Reports

41

Questions or Comments?
We appreciate your feedback and comments. Direct Loan Operations Team can be reached via e-mail at: dlops@ed.gov

42

Contact Information
Lisa DiCarlo
Director, COD Systems/Operations and Direct Loan Operations lisa.dicarlo@ed.gov (202) 377-3129 Management/Program Analyst, Direct Loan Operations julie.aloisio@ed.gov (202) 377-3695 Direct Loan Servicing (Non-Default Group), Director cynthia.battle@ed.gov (202) 377-3261
43

Julie Aloisio

Cynthia Battle