The Loan Assignment Process

1
The Loan Assignment Process

• Sandra McCullough
• Tom Burt
• Greg VanGuilder

2
NSLDS WORKGROUP MEETING
Guaranty agencies may assign loans to the
Department of Education (Education) by tape or by
form. FFEL Assignment Formats, effective July 1,
2002, may be found at http//www.fsacollections.e
d.gov/contractors/ga/assignments/080202.htm Data
provided in the assignment process includes
information regarding the borrower (e.g., SSN,
name, address, birth date, etc.). Data provided
also includes information regarding the loan
(e.g., default date, claim paid date and amounts,
amount collected by the GA, etc.)
March 2005
3
NSLDS WORKGROUP MEETING
Information on the tape is run through an
initial/preliminary editing process. If the
assignment tape does not pass the initial editing
process, the tape is rejected and returned to the
agency. If the tape passes the initial editing
process (that is, the tape is readable the grand
totals in the trailer record match the totals of
the detail records and the number of records
having errors do not exceed the maximum threshold
allowed), the agency is notified to submit the
hard copy files. When the hard copy files are
received, an on-line verification process is
performed, wherein certain information in the
promissory note is compared with information in
the loan record.
March 2005
4
NSLDS WORKGROUP MEETING
The records then go through the final check,
known as the system edits or the load
edits. Only those records that pass both the
system edits and the on-line verification process
are accepted for assignment and loaded to the
DMCS database. Guaranty agencies receive a Load
Data Base Report listing the loans accepted for
assignment. The date of the Load Data Base
Report is the official acceptance date of the
loan. The last page of each Load Data Base
Report contains a summary report, which indicates
the total accounts and debts accepted for
assignment and the Total Principal, Interest,
Penalties, etc. assigned.
March 2005
5
NSLDS WORKGROUP MEETING
The records that do not pass the system edits
and/or the on-line verification process are
rejected for assignment. Guaranty agencies
receive an Edit Error Report listing the loans
rejected for assignment with an Error Code(s)
indicating the reason the loan was
rejected. Guaranty agencies also receive the
file folders of all rejected loans with a Detail
Error Report sheet indicating the loan
information that was on the incoming assignment
file and an Error Code(s) indicating the reason
for the rejection. The agencies that request it
also receive a confirmation file.
March 2005
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NSLDS WORKGROUP MEETING

• The process is basically the same for assignment
  forms except that
• The hard copy files must accompany the assignment
  form
• The information on the assignment form is double
  keyed, with each set of data undergoing a
  comparison. Any discrepancy between the two
  keyed sets of data is resolved.
• This double key process greatly reduces the
  likelihood of key entry mistakes.

March 2005
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NSLDS WORKGROUP MEETING
Guaranty agencies should update their database to
indicate which loans were accepted for assignment
and which loans were rejected for
assignment. Guaranty agencies should report a
Loan Status of AE to NSLDS, once a loan is
accepted for assignment by Education. Once a
loan is accepted for assignment and loaded to the
DMCS database, Education is responsible for
servicing the loan, including reporting the loan
to NSLDS. The Collections Group reports the
requested data elements to NSLDS, in accordance
with the formats specified by NSLDS.
March 2005
8
NSLDS WORKGROUP MEETING

• NSLDS uses the following data elements to match
  the loans reported by the Collections Group
• First Three Characters of the First Name (with
  some secondary criteria)
• DOB
• SSN
• DATE OF LOAN GUARANTY
• TYPE OF LOAN
• SCHOOL ID NUMBER
• INDICATOR OF SEPARATE LOAN

March 2005
9
NSLDS WORKGROUP MEETING
As previously indicated, if a loan is accepted
for assignment, the information in the assignment
record is loaded onto the DMCS database. Most
of the information that is provided at the time
of assignment is displayed on the DMCS R107
Program Specific Screen. The Collections Group
reports the Transfer Date to NSLDS, which is
the date indicated in the DATE ENT field on the
R107 Screen. This date matches the date of the
Load Data Base Report.
March 2005
10
NSLDS WORKGROUP MEETING
NSLDS Reporting Problems Agencies should report
the loan status of AE for only those loans that
were accepted for assignment (that is, for the
loans that appear on the Load Data Base
Report). This ensures that all the data was
reported to NSLDS before the transfer (for
example, the last collection performed by the
GA). If an agency reports the Loan Status of
AE to NSLDS, but the loan was rejected for
assignment, the Collections Group will not have
the loan on its database, so the Collections
Group will not report the loan to NSLDS.
March 2005
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NSLDS WORKGROUP MEETING
NSLDS Reporting Problems (Continued) If an agency
assigns a loan to Education and provides
different information than what the agency
reported to NSLDS, a new entry may be created,
which may actually be a duplicate of a loan on
NSLDS. If a loan is rejected for assignment
and an agency corrects the information, the
agency should report the correction to NSLDS
before submitting the loan for assignment.
Otherwise, a new entry may be created, which may
actually be a duplicate of a loan on NSLDS. An
agency may have reported a loan at a disbursement
level to NSLDS but assigned the loan to Education
at the loan level, which may result in the loans
not being properly updated at NSLDS.
March 2005
12
NSLDS WORKGROUP MEETING
NSLDS Reporting Problems (Continued) An agency
may have reported loans to NSLDS, at the loan
level, but assigned the loans as one loan to
Education by combining two or more loans into one
debt, which may result in the loans not being
properly updated at NSLDS. NSLDS Reporting
Resolutions The date of the Load Data Base
Report is the date a loan was officially accepted
for assignment. This matches the DATE ENT on
the DMCS, which is the date reported by the
Collections Group to NSLDS as the Transfer
Date.
March 2005
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NSLDS WORKGROUP MEETING
NSLDS Reporting Resolutions (Continued) If a
guaranty agency discovers that there is an NSLDS
reporting problem in connection with a loan that
was accepted for assignment by Education, the
agency should contact William Pranchke, Chicago
Service Center. Mr. Pranchkes telephone number
is [phone] His E-mail address is
William.Pranchke_at_ed.gov
March 2005
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NSLDS WORKGROUP MEETING
NSLDS Matching Loans in NSLDS to Loans in DCS
Tom Burt
March 2005
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NSLDS WORKGROUP MEETING

• NSLDS uses soft match rules
• All Loans with same Student SSN Evaluated as a
  group
• Three passes made through group using different
  match rules
• Loans/input records that are matched in a pass
  are eliminated from the next pass

March 2005
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NSLDS WORKGROUP MEETING

• NSLDS Soft Match Rules
• Soft School Code match
• Soft Loan Type match
• Soft Indicator of Separate Loan match

March 2005
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NSLDS WORKGROUP MEETING

• Soft School Code match
• DCS reports 6 digit GSL code
• NSLDS uses data from PEPS to cross-walk GSL code
  to up to 6 different Schools
• NSLDS uses all school branches for these schools
  when looking for a loan

March 2005
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NSLDS WORKGROUP MEETING

• Soft School Code match - Example
• DCS reports school 000123,
• PEPS cross walks has that GSL school code
  attached to 2 Schools, 040123 and 050123.
• School 040123 has branches 00, 01 and 02
• School 050123 has branches 00, 03
• NSLDS will look for DCS reported loan under
  OPEIDs
• 04012300
• 04012301
• 04012302
• 05012300
• 05012303

March 2005
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NSLDS WORKGROUP MEETING

• Soft Loan Type match
• DCS reports SF NSLDS looks for SF or SU
• DCS reports any campus based loan type NSLDS
  looks for any campus based loan type (PU,DU, NU,
  EU, IC)

March 2005
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NSLDS WORKGROUP MEETING

• Soft Indicator of Separate Loan match
• DCS reports A NSLDS looks for any value
• DCS does not report A NSLDS looks for exact
  match

March 2005
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NSLDS WORKGROUP MEETING

• Three passes made through loans for a student
  (ways we match)
• Loans already successfully reported on by DCS in
  prior submission
• Loans having full identifier match
• Loans having soft identifier match

March 2005
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NSLDS WORKGROUP MEETING

• Loans already successfully reported on by DCS in
  prior submission
• Matched by
• Exact SSN
• Exact Loan Date
• Soft School Code match
• Exact DCSs Data Provider ID
• Soft Loan Type match
• Soft Indicator of Separate Loan match

March 2005
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NSLDS WORKGROUP MEETING

• Loans having full identifier match
• Matched by
• Exact SSN
• Exact Loan Date
• Soft School Code match
• Exact Loan Type match
• Exact Indicator of Separate Loan match

March 2005
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NSLDS WORKGROUP MEETING

• Loans having soft identifier match
• Matched by
• Exact SSN
• Exact Loan Date
• Soft School Code match
• Soft Loan Type match
• Soft Indicator of Separate Loan match

March 2005
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NSLDS WORKGROUP MEETING

• Matching Errors
• Two types of errors
• Unmatched (loan not found)
• Duplicate
• One DCS loan matches Two NSLDS loans
• Two DCS loans match One NSLDS loan
• Errors worked by DCS and NSLDS Data Integrity

March 2005
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NSLDS WORKGROUP MEETING

• Bankruptcy Transfers To ECMC
• Transfer stages
• Claims purchased from a lender as a bankruptcy.
• Claims originally purchased as a default after
  which a bankruptcy was filed.
• Transfers will be accepted at any stage of the
  bankruptcy.
• 2. Methods of transferring loan data
• Fully-automated - using the tape format
  currently utilized for subrogation with the
  addition of data elements for specific bankruptcy
  information (electronic transmission or
  transmission via the Internet is also
  acceptable).
• Partially automated - using the subrogation tape
  format for loan data and a manual worksheet for
  specific bankruptcy information.
• Manual - using the manual assignment form
  currently utilized in manual ED subrogation and a
  worksheet for specific bankruptcy information

March 2005
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NSLDS WORKGROUP MEETING

• Bankruptcy Transfers To ECMC
• The borrower collateral files (i.e., promissory
  note, application, etc.) should be sent at the
  time of transfer, as opposed to waiting for all
  edit requirements to be met.
• 4. After assignment (creation of the transfer
  file), the GA must forward all payments and
  correspondence to ECMC.
• 5. Every effort will be made by ECMC to correct
  any errors with the data and/or collateral files.
  This virtually eliminates the reject/resubmission
  process.
• 6. ECMC will file Proof of Claims on new
  bankruptcies and, whenever possible would prefer
  a minimum of 15 days remaining before the filing
  deadline.
• 7. ECMC will notify the Bankruptcy Courts of the
  transfer of assignment via a Notification of
  Assignment letter.

March 2005
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NSLDS WORKGROUP MEETING
Bankruptcy Transfers To ECMC 8. ECMC will
attempt to work with the GA regarding their needs
and special requests. 9. Bankruptcy loans
transferred to ECMC should be treated as
subrogated, (as opposed to transferred) with
respect to government reporting on Form
2000. 10. Open Adversary assignments will be
accepted unless counsel has already been retained
by the GA. All open Adversary assignments will
require separate transfers and special handling.
11. Like subrogation, once a loan is assigned
to ECMC, ECMC becomes the holder. Unless
extenuating circumstances present themselves,
loans will not be transferred back to the
previous GA.
March 2005
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NSLDS WORKGROUP MEETING
Bankruptcy Transfers To ECMC 12. A GA should
not include collection costs in the transfer
balance. This is regardless of whether or not
those amounts were included in the Proof of Claim
amount. ECMC will assess its own collection costs
on non-dischargeable defaulted loans, once the
bankruptcy is dismissed/discharged. 13. Since
all loans are in an active bankruptcy status and
not eligible for inclusion in the Treasury Offset
Program (TOP), there should be no outstanding
offset fees. The GA should exclude TOP fees at
the time of transfer. 14. The amount collected
by GA field should represent the total of all
non-reversed payments (voluntary or involuntary)
only.
March 2005
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NSLDS WORKGROUP MEETING

• Bankruptcy Transfers Issues
• No payments, Outstanding Interest Balance greater
  than 0, and Outstanding Interest Balance Date is
  greater than the claim paid date.
• Outstanding Interest Balance greater than 0, and
  Outstanding Interest Balance Date is equal to the
  claim paid date.
• While loans are transferred on a loan level, ECMC
  would like the Proof of Claim amount to be
  reported on a borrower level for each loan.

March 2005
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NSLDS WORKGROUP MEETING

• Bankruptcy Transfers NSLDS Issues
• Loans transferred to ECMC, then reported to NSLDS
  by ECMC do not use the soft match logic as
  described earlier.
• ECMC loans must match an existing NSLDS exactly,
  therefore it is critical that all the NSLDS loan
  identifier fields are sent to ECMC in the
  bankruptcy transfer process exactly as you have
  reported the loans to NSLDS.
• Most mismatches are due to guaranty date, loan
  type (SF/SU), and original school OPE.
• NSLDS edits prevent a loan with a transfer date
  from creating a new loan NSLDS, therefore until
  all loan identifiers match, the loans will
  continue to error on ECMCs NSLDS submissions.

March 2005