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

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March 2008 Release Updates
• 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

Edit Award Type

Edit Code Block Message Affected
147 R Person Identifier inconsistency for PLUS DL-PLUS
Award for Graduate/Professional
Student

148 W Person First Name inconsistency for a PLUS DL-PLUS

Award for Graduate/Professional
Student

149 R Person Identifier inconsistency for PLUS All

Award Award for Parent of a Dependent
Undergraduate Student

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Edit 147
For a Grad PLUS award (Student and Borrower SSN
match), all identifier information must match.

Student Borrower
<LastName> MUST <LastName>
<BirthDate> MATCH <BirthDate>
<SSN> <SSN>

Edit Award Type

Edit Code Block Message Affected
147 R Person Identifier inconsistency for PLUS DL-PLUS
Award for Graduate/Professional
Student

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

Student MUST Borrower

<FirstName> MATCH <FirstName>

Edit Award Type

Edit Code Block Message Affected
148 W Person First Name inconsistency for a PLUS DL-PLUS
Award for Graduate/Professional
Student

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

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

• Borrower B (Student B
Pell
on Pell award) submits
a Date of Birth change Student B 01/01/81

Borrower B Date of Birth now matches Student A -

This will trigger Reject Edit 149!

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Edit 16 Changes

• 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

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Edit 16 Changes
Edit Award Type
Edit Code Block Message Affected

Incorrect Student Grade Level on a

150 R Award Direct Loan PLUS Award for DL-PLUS
Graduate/Professional Student

Invalid Student/Borrower SSN

151 R Person combination on a Direct Loan PLUS Award DL-PLUS
for Graduate/Professional Student

Invalid Student SSN change on a Direct

152 R Person Loan PLUS Award for Parent of a All
Dependent Undergraduate Student

Invalid Borrower SSN change on a

153 R Award Direct Loan PLUS Award for Parent of a All
Dependent Undergraduate Student

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

• Borrower B (Student B
ACG
on ACG award) submits
an SSN change Student B 111223333

Borrower B SSN now matches Student A -

This will trigger Reject Edit 153!

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Edit 16 Changes
A new Edit will be added
Edit Award Type
Edit Code Block Message Affected

Incorrect Student Grade Level

159 R Award DL-PLUS
for a Parent PLUS award

• Only applicable for award years 2008-2009

and forward

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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

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

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Additional Unsubsidized Indicator
New Edits
Edit Award Type
Edit Code Block Message Affected

Dependency Status set to D and Grade

154 R Award DL
Level greater than or equal to 6

Dependency Status set to I and Additional

156 R Award DL
Unsubsidized Indicator set to true

Sum of Award Amounts exceeds Base

157 R Award DL
Annual Loan Limit

HPPA Indicator set to true and Grade Level

158 R Award DL
less than 6

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Annual Loan Limits
Grade Base Annual Combined Annual
Level Loan Limit 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 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.

Dependency Award Award

Award Type Number Status AUI Amount 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

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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.

Dependency Award Award

Award Type Number Status AUI Amount 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 Message MPN Expiration Dates
Code Updated for…

D Death All MPNs for Borrower

Unauthorized Signature/Unauthorized MPN associated with

G
Payment specified loan

MPN associated with

I Identity Theft
specified loan

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Discharge Reversal
Recalculating MPN Expiration Date

If MPN associated with the discharged MPN Expiration Dates Will be

loan… recalculated as follows…

Not linked to any loans with funded

365 days from MPN Received Date
disbursements or is unlinked

Linked to any loan with funded

3,650 days from MPN Received Date
disbursements

(Due to death) is linked to any awards

3,650 days from MPN Received Date
with accepted and funded disbursements

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Discharge Reversal
Recalculating MPN Status

Updated MPN
Condition(s):
Status

New MPN Expiration Date <= Current Processing Date Inactive

Recalculated MPN Expiration MPN is linked to an award Active

Date > Current Processing
Date MPN not linked to an award Pending

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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

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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 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

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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!!

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

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Reminder! Origination Fee Update
As of July 1, 2008,
the origination fee will be 2.0%
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 Percentage is based on Earliest Disbursement Date,

NOT Award Year!

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Origination Fee Edits
Edit
Edit Code Block Message

140 R Award Incorrect Origination Fee Percent on New Awards

Cannot change the Origination Fee Percent on an

141 R Award
Active Loan

142 R Award Invalid Origination Fee Percent on Award Changes

Disbursement Net, Fee, and/or Rebate Amounts

143 R Award are Incorrect based upon the Origination Fee
Percentage

Disbursement Dates do not match Origination Fee

144 R Disb
Percent on file

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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

An exciting new CBT

will be released by COD
to familiarize users with
the capabilities of the
COD System!

Now Available!

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Webinars

Internet Training and Webinars

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

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

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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

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Direct Loan Repayment Plans
Roll Out Strategy

In Repayment Selection Prior Selection After

Borrowers who Borrowers will

Borrowers who are selected a
paying under one make a
repayment plan
of the pre-HERA repayment plan
prior to
plans will see no implementation will
selection from
change and will remain on their pre- one of the new
continue to pay HERA selection repayment
under the terms of (even if they have plans.
their plan. not entered
repayment)
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

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Direct Loan Repayment Plans

• Available to all Direct Loan borrowers

Graduated
• 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

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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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Direct Loan Repayment Plans

• Available only to new Direct Loan borrowers

Extended 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

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Direct Loan Repayment Plans

• Available to Direct Subsidized, Direct

Unsubsidized, and Direct Consolidation
ICR
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

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Related Direct Loan Sessions
Title IV Funding to Schools: From COD to
Session #4
GAPS

Session #24 COD Web Hands On

Session #40 A Direct Loan Primer

Unlocking the Potential of Direct Loan

Session #41
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

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Contact Information
Lisa DiCarlo
Director, COD Systems/Operations and Direct Loan
Operations
lisa.dicarlo@ed.gov
(202) 377-3129

Julie Aloisio
Management/Program Analyst, Direct Loan Operations
julie.aloisio@ed.gov
(202) 377-3695

Cynthia Battle
Direct Loan Servicing (Non-Default Group), Director
cynthia.battle@ed.gov
(202) 377-3261

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