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Direct Loans Updates 2008-2009: Highlights & Changes

Stay informed on the March 2008 release updates for Direct Loans, including MPN changes, origination fee updates, and more. Learn about new tools and training available for Direct Loan Servicing. Discover important updates such as inconsistent identifiers, new edits, additional unsubsidized indicators, and award discharge procedures. Ensure compliance with required fields and values for Direct Loans to avoid rejection edits. Familiarize yourself with loan key awards, disbursements, annual limits, and the redesigned PLUS MPN process. Updated guidelines for MPNs before disbursement and the inclusion of borrower rights and responsibilities. This comprehensive session outline covers essential information for managing Direct Loans effectively in the 2008-2009 academic year.

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Direct Loans Updates 2008-2009: Highlights & Changes

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  1. Session #42 What’s New in Direct Loans for 2008-2009 Lisa DiCarloJulie Aloisio Cynthia Battle

  2. Session Outline March 2008 Release Updates MPN Updates Origination Fee Update Reminder Tools and Training Direct Loan Servicing 2

  3. March 2008 Release Updates • Inconsistent Identifiers • Edit 16 Changes • Additional Unsubsidized Indicator • Award Discharges & MPN Expiration Date

  4. Inconsistent Identifiers • New Edits only applicable to award years 2008-2009 and forward

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

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

  7. 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!

  8. 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!

  9. 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

  10. Edit 16 Changes

  11. 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!

  12. Edit 16 Changes A new Edit will be added • Only applicable for award years 2008-2009 and forward

  13. Additional Unsubsidized Indicator • <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 <DependencyStatusCode> • Required for all Direct Loans • Valid values: “D” or “I” • Blank or other values will trigger Reject Edit 996

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

  15. Additional Unsubsidized IndicatorNew Edits

  16. Annual Loan Limits

  17. 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

  18. 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

  19. Award Discharges, MPN Expiration Date Upon award discharge, the COD system will update associated MPN(s) as follows:

  20. Discharge ReversalRecalculating MPN Expiration Date

  21. Discharge ReversalRecalculating MPN Status

  22. 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

  23. Session Outline March 2008 Release Updates MPN Updates Origination Fee Update Reminder Tools and Training Direct Loan Servicing 23

  24. 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.

  25. 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

  26. 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!!

  27. Session Outline March 2008 Release Updates MPN Updates Origination Fee Update Reminder Tools and Training Direct Loan Servicing 27

  28. 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!

  29. Origination Fee Edits

  30. 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

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

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

  33. Session Outline March 2008 Release Updates MPN Updates Origination Fee Update Reminder Tools and Training Direct Loan Servicing 33

  34. 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

  35. 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.

  36. 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 36

  37. 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 37

  38. Direct Loan Repayment Plans 38

  39. 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

  40. 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

  41. Related Direct Loan Sessions

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

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

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