Whats New in Direct Loans

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Session 42

• Whats New in Direct Loans
• for 2008-2009
• Lisa DiCarloJulie Aloisio
• Cynthia Battle

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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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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

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Edit 147

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

MUST MATCH
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Edit 148

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

MUST MATCH
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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 DoBAND no Borrower DoB change
  tag is submitted
• Borrower DoB change must not match what exists on
  COD for Student DoBAND no Student DoB change tag
  is submitted
• This can be triggered by all award programs!

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Edit 149 Example

• Borrower B created on COD for PLUS award
• Borrower B (Student B on Pell award) submits a
  Date of Birth change

X
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
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Edit 153 Example

• Borrower B created on COD for PLUS award
• Borrower B (Student B on ACG award) submits an
  SSN change

X
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

• Only applicable for award years 2008-2009 and
  forward

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Additional Unsubsidized Indicator

• ltDependencyStatusCodegt
• Required for all Direct Loans
• Valid values D or I
• Blank or other values will trigger Reject Edit 996

• ltAdditionalUnsubsidizedIndicatorgt
• 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

• ltDLLoanInformation LoanKey"1gt lt!Loan
  Information--gtlt/DLLoanInformationgt
• ltDLUnsubsidizedgt ltFinancialAwardYeargt ltCPSTransa
  ctionNumbergt ltFinancialAwardAmountgt ltLoanKeygt lt
  AdditionalUnsubsidizedIndicatorgt ltDependencyStatu
  sCodegt
• ltFinancialAwardNumbergt ltFinancialAwardIDgt ltFina
  ncialAwardCreateDategt ltDisbursementgt
  lt!Disbursement Information--gt lt/Disbursement
  gtlt/DLUnsubsidizedgt

Loan Key
Award
Disbursement
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Additional Unsubsidized IndicatorNew Edits
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Annual Loan Limits
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Additional Unsubsidized IndicatorEdit 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.

X
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Additional Unsubsidized IndicatorEdit 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.
X
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Award Discharges, MPN Expiration Date

• Upon award discharge, the COD system will update
  associated MPN(s) as follows

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Discharge ReversalRecalculating MPN Expiration
Date
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Discharge ReversalRecalculating MPN Status
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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 Borrowers Rights and
  Responsibilities (BRR)
• COD will not accept older MPN versionafter 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

Origination Fee Percentage is based on Earliest
Disbursement Date, NOT Award Year!
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Origination Fee Edits
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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/currentCPresentation
  sYearPag.jsp?p1AdditionalFSAPresentationsp2c

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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 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.
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Direct Loan Repayment Plans

• 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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Direct Loan Repayment Plans

• 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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Direct Loan Repayment Plans
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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
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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
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Related Direct Loan Sessions
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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_at_ed.gov

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Contact Information
Lisa DiCarloDirector, COD Systems/Operations and
Direct Loan Operationslisa.dicarlo_at_ed.gov(202)
377-3129 Julie AloisioManagement/Program
Analyst, Direct Loan Operations
julie.aloisio_at_ed.gov(202) 377-3695 Cynthia
BattleDirect Loan Servicing (Non-Default Group),
Director cynthia.battle_at_ed.gov(202) 377-3261
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