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“ Rational and Irrational Adventures in the Direct Loan Wonderland” Presented by Sherry Proper Director of Financial

“ Rational and Irrational Adventures in the Direct Loan Wonderland” Presented by Sherry Proper Director of Financial Aid & Enrollment Support Allegheny College. “Chapter 1 – Down the Uncertain Chasm”.

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“ Rational and Irrational Adventures in the Direct Loan Wonderland” Presented by Sherry Proper Director of Financial

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  1. “Rational andIrrational Adventures in the Direct Loan Wonderland” Presented by Sherry Proper Director of Financial Aid & Enrollment Support Allegheny College

  2. “Chapter 1 – Down the Uncertain Chasm” • Liquidity injected into FFELP by Government purchasing of loans in 2008-09 & 2009-10 • Very unlikely to happen for 2010-11 • July 1, 2010 not that far away • Will FFELP $$$ be available? • Will lenders remain in FFELP? • Is 100% DL participation inevitable? • What has your school done to prepare?

  3. “Chapter 1 – Down the Uncertain Chasm” • Virtually all the same regulations • Use of MPN & entrance counseling • Same annual & aggregate loan limits • Similar borrower benefits & repayment options • Same interest rates except PLUS • FFELP PLUS 8.5% • DL PLUS 7.9%

  4. “Chapter 2 – The Puddle of Tears” • It’s a different language in a Parallel World • DRI, booked loans, disb sequence numbers, etc. • Originate instead of certify • Make loans inactive instead of canceling • Single source (G5) instead of many sources • Required monthly reconciliation & year-end closeout • Technological changes • Processing & procedure changes

  5. “Chapter 3 – The Circle Race” • Does it feel like we are running in circles? • Preparation prior to converting • New DL school set up • DL implementation steps • Software issues • Also prepare for the follow-up work • How to handle PLUS borrower info • Response records, rejects & warnings • Reconciliation

  6. “Chapter 4 – Rabbit Sends a Little Help” • Helpful DL Software Considerations • Send & receive DL/COD data • Determine if you have DL rejects • View details about response errors • View PLUS borrower information • View sequence numbers & COD responses • View entrance interview dates • Determine the Booked Loan amount • Reconciliation reports for DL • COD message classes

  7. “Chapter 5 – Advice from the Caterpillars” • Checklist for the Transition to Direct Loans • Participation & technology readiness • Communication • Awarding loans & revisions • Originating loans • Promissory notes • Entrance counseling • Disbursement process & delayed disbursements • COD reports • Obtaining funds

  8. “Chapter 6 – Booked Loans & Pepper” • Linking MPNs • Loan award • Active MPN • Data elements needed to link loans • Booked Loans – COD must receive & accept: • Completed/signed MPN • Award record • Actual disbursement (DRI=true) • Key loan data elements • Person data • Award/disbursement data

  9. “Chapter 7 – PLUS MPN Mad Tea Party” • Institutional PLUS loan form • Advantages • Disadvantages • New PLUS application website • Advantages • Disadvantages • School-initiated credit check • Advantages • Disadvantages

  10. “Chapter 8 – The Queen’s Croquet Court” • PLUS approvals like chaotic croquet game • Approved if no adverse credit • Different from the more strict criteria in FFELP • PJ as an alternative to the credit check • SSI income • Welfare recipient • Active bankruptcy proceedings • Other ???

  11. “Chapter 9 – Mock Turtle’s COD Story” • COD at the center of DL processing • Common record “data blocks” • Disbursement • Award • Person • Entity Information • Common Record • Batch search, summary, detail • MPN search & credit check info • Person information • Award detail, disbursement history

  12. “Chapter 10 – Lobster Counseling Quadrille” • New online entrance counseling • New online exit counseling • Entrance & exit reports available • Combination FFELP & DL complications • One exit counseling session okay, but must provide additional info on other program

  13. “Chapter 11 – Who Stole the Tartlets?” • Reconcile monthly • Where is the money? • Internally FA & Business Office • Externally with COD • Cash, loan summary, loan detail • COD screens & reports • SAS from COD • Software system reports • DL Tools software • COD reconciliation specialists

  14. “Chapter 12 – Alice’s DL Evidence” • Evidence indicates things will be okay in the DL Wonderland • Solid servicing system • Successful school examples • Colleagues helping each other • DL Info exchange • What DL tip/advice can you offer? • What DL help do you need?

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