Chuck Hirman | Dec. 2014 U.S. Department of Education 2014 FSA Training Conference for Financial Aid...

Chuck Hirman | Dec. 2014

U.S. Department of Education

2014 FSA Training Conference for Financial Aid Professionals

Direct Loan Processing: Making COD Work for You

Session 19

Agenda

• COD Release 14.0 – new award year• Funding• Loan Origination Fees• PLUS Loans• Disbursements• Loan Period & Academic Year Reporting• SULA Fundamentals, Tips, Coming Soon• Rejects• Reports• Resources

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COD Release 14.0

Implementation 3/27 – 3/29/2015

2015-16 award year functionality added•Direct Loan Funding

• ~April: Initial authorization for advance funded schools with early disbursements

• ~June: 60% of anticipated funding needs for the year• ~November: Remaining 40%• Daily processing: CFL increases when COD accepts 2015-16 actual

disbursements• Need additional funds?

•COD report settings•StudentLoans.gov preferences

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G5 Award Numbers for 2015-16

G5 award numbers are program and award year specific

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Program G5 Award Number Award Year

Direct Loan P268K16#### Trailing Year

TEACH Grant P379T16#### Trailing Year

Pell Grant P063P15#### Leading Year

IASG P408A15#### Leading Year

Campus-Based FWS: P033A15####SEOG: P007A15####

Leading Year

#### - Your school’s 4-digit G5 identification number

COD Report Settings for Award Year

• Confirm COD reports for the new year will arrive in the format you want

• Don’t forget to check the SAS too

’15-’16

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StudentLoans.gov Preferences

• Manage StudentLoans.gov in COD School Options• School/ School Information/ Options• Your choice whether to use any/all SLG functionality

• Or, do those functions yourself on campus

• Everything a borrower does in SLG is communicated• School responses• COD reports• COD website search functionality

SLGSLGCODCOD6

Non-Award Year SpecificCOD Options for Managing StudentLoans.gov

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Award Year SpecificCOD Options for Managing StudentLoans.gov

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Paper Refund Checks

• We’re getting close (end of 2014) when they will no longer be accepted• Too often are mailed to the wrong place• Slower, more costly to process than electronic refunds• Treasury has ordered a complete discontinuation

• If you haven’t done so yet – arrange to return funds to G5 electronically

• Cash management regulations have long required refunds of $100,000 or more to be returned electronically

Electronic Announcement posted 4/2/2013

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COD Cash Management ScreensCOD website has a number of screens to help you track your funding and cash management

•School Summary Information• Cash>NAPD

•School Funding Information• CFL, Available Balance, NAPD• Net Draws, Cash>NAPD

•School Summary Financial Information• Same info and format as SAS Cash Summary page

•Cash Activity• Printer friendly button in right corner• Lists all drawdowns and refunds

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COD.ED.GOV

Loan Origination Fees

• Changes due to Sequestration• COD calculation/truncation rules are not changed


Earliest Disb Date Sub/Unsub Orig Fee PLUS Orig Fee

Before 7/1/2913 1.0% 4.0%

7/1/2013 – 11/30/2013 1.051% 4.204%

12/1/2013 – 9/30/2014 1.072% 4.288%

10/1/2014 – 9/30/2014 1.073% 4.292%

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Origination Fees - New

New Reject-213• Actual Disbursement Submitted with EDD after an Established Date• The next “established date” we currently know of is 10/1/2015• We know the loan fees will be changing then but until we know what

they will be we won’t accept the actual disbursements

CROF System-Generated Response• Once new fee percentages are known• COD will correct records having only anticipated disbursements• CROF15OP = 2014-15 award year


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PLUS Loans - New

• Adverse credit criteria to include if one/more debts have a total combined outstanding balance greater than $2085• 90 days or more delinquent, or• Charged-off or placed in collections within past two years

• Credit checks valid for 180 days• PLUS borrowers with adverse credit who appeal based on

extenuating circumstances or obtain an endorser – must complete PLUS loan (credit) counseling

Final Regulations posted 10/23/2014

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Disbursement Reporting Requirement15-day reporting requirementFederal Register posted 2/28/2013

•Disbursements and adjustments made on/after 4/1/2013•Pell LEU and SULA all need prompt reporting to COD•For now COD edits are still looking at 30 days but the Regulations are tighter, 15 days

• School Monitoring Report• 30-Day Warning Report• Warning Edit 055

No. Edit Type Block Message 055 W Disbursement Disbursement Information

Received 30 Days after Date of Disbursement

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Disbursement Date Reporting• The actual disbursement date is the date a school credits

the student’s account or pays the student or parent directly

• Actual disbursement date reported to COD must be accurate due to interest calculations and various timeframes, deadlines, and a number of regulatory triggers (i.e. loan fees, interest rates)

• We are seeing schools merely flipping the DRI to True but not first updating the disbursement date

• Warning edit 055, School Monitoring Report, other implications


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Upward Disbursement Adjustments

• Should only be made to correct an erroneously reported actual disbursement

• Interest is calculated from the sequence 01 date• If you give additional funds make a new disbursement

for that additional amount

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Disbursements – 120-Day Rule

• For any loan type (Sub, Unsub, PLUS) if the borrower returns funds asking the disbursement be reduced you may accept those funds up to 120 days from the disbursement date• Reduce disbursement and report to COD• Re-disburse or return the money to G5• Borrower gets a break on interest and loan fees of returned amount• You are not required to do this beyond the regulatory right to cancel

timeframes. However, a lower debt burden is a default less likely

Does not apply to returns required for regulatory reasons

Those must be made no matter when they’re discovered

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Loan Periods & Academic Years

• Correct reporting crucial to accurate SULA calculations• 2013-14 & forward – all borrowers, all loan types• Loan periods should include only terms/payment periods in

which the borrower received (and retained) funds• Loan Period: period of enrollment for which the loan is

intended• Academic Year: period used to track annual loan limits• Updates required in many instances if circumstances change

Dear Colleague Letter GEN-13-13 posted 5/10/2013

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Loan Period ReportingWhy Updating the Loan Period Matters

Example:

Fall: 9/10/2014 – 12/10/2014

Spring: 1/10/2015 – 5/10/2015•School originates fall-spring loan, full-time attendance•SAY, summer trailer, summer attendance not required•SUP: #days in LP/#days in AY = 242/242 = 1.0 Years

But borrower doesn’t return in the spring•School needs to update LP to fall-only•SUP: #days in LP/#days in AY = 91/242 = 0.4 Years

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Academic Year Reporting

Your academic year is school-defined•Minimum of 30 weeks of instruction and 24 semester/ 36 quarter credit hours for a credit-hour based program

• No hour minimum for a graduate level program

•Minimum of 26 weeks and 900 clock hours of instruction for a program measured in clock hours

Why is this significant for SULA?•We’re seeing loans with AY’s that are too short, even some less than half that

1.Since SUP = LP/AY … calculations are too high

2.Plus, are these schools also awarding new annual loan limits too soon?

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The Loan Period/Acad Year FractionSubsidized Usage Period (SUP) =

# Days in the Loan Period ….. if too high SUP is too high

# Days in the Academic Year ….. if too low SUP is too high

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Updating LP & the Annual Loan Limit Exception

Annual Loan Limit Exception to SUP = LP/AY•Standard-term programs and non-standard-term programs that are substantially equal and each at least nine weeks in length•If borrower receives full annual loan limit for grade level•And loan period < academic year•A SUP of 1.0 Years will be calculated, regardless of the LP/AY calculation

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Annual Loan Limit Exception - Continued

Example – loan originated with 2 anticipated disbs•Loan amount: $3500•LP = AY: 9/10/2014 – 5/10/2015 SUP = 1.0 Years

Fall disb made, student withdraws before spring disb•School correctly updates LP per GEN-13-13•LP = Fall, AY = Fall-Spring SUP = 1.0 Years still!•Why? The annual loan limit exception was triggered

Solution: zero out the unused second disbursement and reduce the loan amount

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Updating Unused Loans

Example: Loan was originated and an actual disbursement was made but later backed out

COD processing rules:1. An actual Subsidized Usage Period (SUP) will be calculated if the

incoming record has any actual disbursements

2. When an award is inactivated the actual Subsidized Usage Period (SUP) is cancelled

What does this mean?• Once you’ve reported an actual disbursement on a loan the only

way for the SUP to be fully removed is to inactivate the loan

1. Reduce all disbursements to zero

2. Reduce the loan amount to zero

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150% – Terms & Concepts

• SULA• First-time borrower• Maximum Eligibility Period (MEP)• Subsidized Usage Period (SUP)• Remaining Eligibility Period (REP)• XML Schema• Tags• SULA Calculations• COD – system of record for loan records• NSLDS – system of record for enrollment reporting

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SULA Fundamentals• SULA: Subsidized Usage Limit Applies• First-time borrower: Any borrower who had no balance on

a DL/FFEL on 7/1/2013 or afterwards at the time they obtain a loan

• Maximum Eligibility Period (MEP): Set at 150% the published length of the program the borrower is enrolled in

• Subsidized Usage Period (SUP): The loan’s subsidized usage, which is basically length of loan period divided by length of academic year

• Remaining Eligibility Period (REP): The borrower’s remaining eligibility for subsidized loans:

MEP - ∑SUPs = REP26

SULA Information - Responses

SULA usage communicated in two response types:

System-generated response: CRSUPerson, Award, or Disbursement level

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1. Response File 2. System-Generated Response

• Origination of awards• Maintenance on awards

• Activity on another loan for a student at your school

• Changes in enrollment status• Changes to Non-Credential

Teacher Certification Program data• Discharge of a loan• Payment to Servicer

SULA Information - Web Pages

Two new SULA web pages have been added to the COD website:

1.Subsidized Eligibility Information page• Link on the Person Direct Loan Information page

2.Subsidized Usage Limit Applies Request page• Request the most recent SULA information via CRSU• Reachable via Batch tab, left navigation panel

NOTE: Privacy information shown in next pages is fake data from our test database

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Subsidized Eligibility Information Page

COD website

Person Tab

Subsidized Eligibility Search

SULA• MEP• SUP• REP

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SULA Request PageCOD website/ Batch Tab/ SULA Request

COD will generate a CRSU and send to TG Mailbox

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SULA Calculator – Coming Soon

• Working on it now, implemented in Spring• On the COD website• Allows you to plug in subsidized loan values either for

loans already on the system or new loans you are going to send

• Won’t create/build/change any loans – it’s just a calculator to help you see if a loan can make it through when remaining eligibility is in question

• Won’t need to keep sending the loan, getting it rejected• Optional

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SULA Loss Dispute Process - Soon

• Working on it now, implemented in Spring• On the COD website• Forward to FSA’s attention when SULA particulars need

correcting on a loan and the former school can’t (won’t?) do so• Intended for closed-school loans

• By far the most efficient means of getting former loans corrected is by a courtesy call directly from financial aid office to financial aid office

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COD Rejects & Warnings

• Rejects – record not built and will not be in Person/Award search on COD website

• Warnings – record was processed, FYI concerning your processing/timing

• Watch your rejectsRejected disbursements = unsubstantiated funds•Use your software’s import edit report•Review batches on the COD website

COD Technical Reference, Volume II, Section 4 - Edits

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Top Hits – Rejects & Warnings

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Edit Some of the Top Edits # of Hits

W-54Disbursement Date Within 7 Days or Passed, Disbursement Release Indicator Set To “False”

17,627,962

W-55Disbursement Information Received 30 Days after Date of Disbursement

8,199,110

R-50 Disbursement Date Outside Allowable Window 917,828

R-140Incorrect Origination Fee Percent and/or Interest Rebate Percent on New Awards

705,854

W-36 PLUS Credit Decision Status is not accepted for this PLUS award

595,949

COD Technical Reference, Volume II, Section 4

Resolving Your COD Rejects

• Response• Work the Response when you import it

• Query your system for rejects• Most systems will keep resending rejected records until they are

accepted

• COD website Batch Search functionality• Since rejected records were not “built” they will not be found in

Person/Award Search• Batch Search will tell you what the rejects were

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COD Batch Search

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Enter school ID and date range (up to 60 days)

Or, enter SSN and choose specific award year or select all award years for complete history

Some SULA-Related Rejects

*Electronic Announcement posted 10/31/2014

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Reject Code Trigger

Reject 050 Disbursement Date Outside Allowable Window

Reject 204* Incorrect Program CIP Code Submitted

Reject 205* Payment Period Start Date (PPSD) is outside the Loan Period

Reject 206* Remaining Subsidized Eligibility is less than zero for this award

Reject Edit 050Disbursement Date Outside Allowable Window – Update

• Disbursement must be no earlier than 10 days before the loan period start

• Disbursement must be no later than 180 days after the loan period end

But schools were hitting this reject after zeroing out an actual disbursement and updating the loan period to remove term/payment period per DCL GEN-13-13•COD “off-cycle” change on 9/14/2014•Now COD will ignore actual disbursements reduced to $0


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Reject Edit 205Payment Period Start Date is Outside the Award Begin and End dates

Issue: • Per GEN-13-13 schools are required to shorten the LP to exclude

terms/payment periods where no disbursement is made (or one was made but later zeroed out)

• But each term/payment period has its own PPSD and when the LP is shortened and “orphans” a PPSD – Edit-205 fires

Solution:• COD R14.0 will relax the edit as long as the disbursement = $0• Until then zero out the disbursement, change the PPSD to fall within the

new LP dates, and then update the LP


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Reject Edit 206Remaining Subsidized Eligibility is less than zero for this award•You’ve sent a Subsidized loan to COD and it came back rejected with Edit 206

• Of course, everything could be reported optimally and the borrower simply has insufficient SULA eligibility so … award unsubsidized

• Check the reporting of this rejected loan and make updates if necessary

• Confirm that prior loans already on the COD system were reported and updated correctly

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Reject Edit 206 - Continued• Has this loan been reported so the borrower can receive

the maximum amount of subsidized funds for which they are eligible?

Maximum Eligibility - ∑SUPs = Remaining Eligibility

Subsidized Usage Period = LP/AY

• Academic Year – at least the 26 or 30 week minimum?• Loan Period – includes only terms/payment periods where the

borrower receives loan funds?• Enrollment Status – will the borrower be attending half-time or three-

quarters-time?• Loan Amount – is the annual loan limit exception being triggered?

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Reject Edit 206 - Continued

• Have previous loans been reported and updated correctly?

• Although outside your control you can still be instrumental in getting those loans updated by contacting the former school

• So, as a professional courtesy, if you are that former school please update the loan promptly

• If the previous loan is from a now closed school – we’re working on it

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COD Reports – Can Help You Manage:

Loan Origination Process• Duplicate Student Borrower

report• Completed PLUS Application

report*• Counseling report*• Subsidized Loan Usage

Change report

Master Promissory Notes• Completed MPN report*• Expired MPN report• MPNs Due to Expire report• MPN Discharge report

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Disbursement Process• Actual Disbursement list• Pending Disbursement list• COD Action Queue• 30-Day Warning report• Inactive Loans report

*From activity completed on StudentLoans.gov

COD Reports – COD Technical Reference

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What the report can be used for

Business Rules• Formats• Message classes• When it’s generated

Record Layouts• What data is included

Mock-up Samples

FSADownload.ed.gov

COD Reports – Format & Delivery

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COD Website - Newsbox

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COD Website - Newsbox

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COD School Monitoring Report

• Produced weekly if any of the following conditions occur:• Pell POP• 30-day reporting missed (should be 15 days anyhow!)• Unsubstantiated cash > 30 days

• Posted to your COD Newsbox (DL and Pell)• Also sent to your SAIG Mailbox (SCHMONOP)

We check for those conditions weekly so schools should check for that report that often too

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Direct Subsidized Loan Usage Change Report• Displays Subsidized loans for a borrower when there is a

change to SULA calculated values• Generated weekly on borrowers have changes to:

• Maximum Subsidized Eligibility Period• Actual (or Anticipated) Subsidized Usage Period• Actual (or Anticipated) Non-Credential Teacher Certification

Subsidized Usage Period

• COD Newsbox• CSV format

COD Technical Reference, Volume 6, Section 8

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Report Readers

• Simplified way of importing some COD files into Excel• SAS Disbursement Detail on Demand• Pell Grant Reconciliation File• Pell Grant YTD File

• Readers & instructions• COD website “COD Resources”

• Request “fixed-length” files

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1314 Direct Loan Program Year Closeout

• Deadline 7/31/2015• Closeout completed on the COD

website by submitting the Balance Confirmation Form

• Made available when the School Account Statement (SAS) reflects $0 ending cash balance

• If you miss the deadline and haven’t requested Extended Processing a Final Demand Letter will be issued

• After that a Receivable is produced – billing the school the remaining balance plus interest

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Resources: New COD Communications Page

COD website

“File Share & Messages”• File share

• FSA e-mail campaigns with student-specific information• Customized reports• E-mail will alert schools to file availability

• Broadcast messages

1.Log into COD/ School tab/ School Summary Info page

2.File Share/Messages link on left side of page

Also, “Today’s Update” renamed “COD Resources”

Electronic Announcement dated 6/20/2014

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SULA Resources

Reporting of Loan Periods & Academic Years•Federal Loan School Support Team•Dear Colleague Letter GEN-13-13•Electronic Announcements & Webinar recording•E-mail: [email protected]

150%/SULA Regulations & Processing•Federal Registers, Electronic Announcements, Webinar recordings, NSLDS Newsletters, COD Technical Reference•E-Mail: [email protected]

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COD Computer-Based Training

Some CBT’s have been updated with SULA• Locating Direct Loan Information• Updating and Creating Records• Working the Action Queue

•IFAP/ Tools for Schools/ COD Computer-Based Training


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School Contact Information at COD

• Contact information is too often outdated and inaccurate• We don’t know who to contact when we see a problem

developing• COD outreach• FSA efforts to be proactive

• Financial Aid Administrator, CFO, President• Update E-App in eligcert.ed.gov

• Direct Loan and Pell contacts• Update directly on the COD website

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Contact Information

Chuck Hirman

Federal Student Aid

Seattle, WA

206-615-3643

[email protected]

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QUESTIONS?

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Chuck Hirman | Dec. 2014 U.S. Department of Education 2014 FSA Training Conference for Financial Aid...

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