Common Origination & Disbursement · Loans eligible for Public Service Loan Forgiveness Program ......

COMMON ORIGINATION

&

DISBURSEMENT

TASFAA: Working In Harmony

Franklin, TN

1 April 23, 2012

Award Year 2012-2013

WOOD MASON

U.S. DEPARTMENT OF EDUCATION

FEDERAL STUDENT AID

FEDERAL LOAN SCHOOL SUPPORT TEAM

770.383.9662

[email protected]

2 April 23, 2012 TASFAA: Working In Harmony

Franklin, TN

AGENDA

• Late changes for Award Year 2011-2012

– Adverse credit criteria

– Special Loan Consolidation Program

– Two Factor Authentication

• COD for AY 2012-2013

– What’s here & what’s coming…

• Resources


Franklin, TN

ADVERSE CREDIT CRITERIA

• Modified as of October, 2011

• Charge-off and collection accounts will result

in status of “Declined” on credit check for

PLUS awards

– Within 5 years of the credit report date AND

– Unpaid balance > $0

4 TASFAA: Working In Harmony

Franklin, TN

April 23, 2012

ADVERSE CREDIT CRITERIA

• Cannot increase 001 PLUS Loan if in receipt of a subsequent adverse credit decision

• Parent or Graduate/Professional Student must successfully appeal or secure an endorser • You CAN

• Fully disburse the 001 PLUS Loan

or

• Reduce remaining 001 disbursements to $0 and offer dependent child unsubsidized funds

or

• The Parent borrower can forego PLUS Loan and dependent child offered unsubsidized funds


Franklin, TN

April 23, 2012

SPECIAL DIRECT CONSOLIDATION LOAN

• NOT a program

• An opportunity for borrowers…

• With a loan(s) in repayment, deferment, or

forbearance

• Who have an ED-held loan(s) (Direct Loan or ED-

held FFELP Loan) that are not delinquent

• Who also have a commercially-held FFELP Loan

• Are facing payment to multiple loan holders


Franklin, TN

April 23, 2012


• Benefits include

• Single servicer

• One bill and one payment

• Interest rate of underlying loan(s) reduced

0.25% and fixed for life of loan

• Additional 0.25% reduction for EFT

• Loans eligible for Public Service Loan

Forgiveness Program


Franklin, TN

April 23, 2012


• NOT the standard loan consolidation

program

• Borrowers should NOT apply at

loanconsolidation.ed.gov

• Servicers will notify eligible borrowers

• Sallie Mae

• FedLoan Servicing (PHEAA)

• NelNet

• Great Lakes


Franklin, TN

April 23, 2012


• Opportunity window open January 17-June

30, 2012

• Electronic Announcements dated December

28, 2011, January 13, 2012, February 14,

2012, February 27, 2012, & March 2, 2012

• Borrowers should direct questions to

• www.studentaid.gov/specialconsolidation

• FSAIC at 800.4FEDAID


Franklin, TN

April 23, 2012



Franklin, TN

April 23, 2012

TWO FACTOR AUTHENTICATION


Franklin, TN

April 23, 2012

• Two Factor Authentication, or TFA, is a new security process through which all authorized users will be required to enter two forms of “authentication” to access Federal Student Aid systems • The first factor is known to the user - his or her

UserID and Password

• The second factor is one that an individual has – a One-Time Password generated by an FSA provided “token”



Franklin, TN

April 23, 2012

• Implemented to comply with new

government-wide security requirements and

to ensure security of FSA data systems

• Initial COD implementation January 29, 2012

• Schools phased in throughout 2012

• TFA electronic announcements

• January 13, 2012

• February 8, 2012

• March 12, 2012



Franklin, TN

April 23, 2012

• ALL COD users will be eventually be required

to employ TFA

• North Carolina during the month of April 2012

• Tokens will be provided to each COD user via

month-by-month distribution • Being sent now via UPS

• You’ll receive notification of shipment

• Prior to use, tokens will need to be registered via

a link on the COD web site



Franklin, TN

April 23, 2012

• The TFA token is a small electronic device that looks like a “key fob” with a “power” button and a display screen on its front

• The OTP is generated by pressing the white “power” button on the front of the token

• The OTP will display for 30 seconds

• A different OTP will be generated each time the white “power” button is pressed

• Contact [email protected]



Franklin, TN

April 23, 2012

Power Button



Franklin, TN

April 23, 2012

NAYS FOR SCHOOLS

18 April 23, 2012

New Award Year Setup For Schools

2012-2013


Franklin, TN

NAYS FOR SCHOOLS

19 April 23, 2012

• School General Information screens on COD

website • Program relationship data

• Reporting/Attended school(s) • Software/Servicer • TG mailbox number

• School general data • Grantee and Payee DUNS numbers

• Main campus data • Academic calendar • Single disbursement exemption


Franklin, TN

NAYS FOR SCHOOLS

20 April 23, 2012

• COD website “Options” screen

• Award participation options

• Award start/end dates

• Parent and Graduate/Professional student PLUS Request participation dates

• Electronic process participation

• eMPN

• Entrance counseling

• Reports

• Delivery

• Format

• SAS

• Unique additional location participation options


Franklin, TN

NAYS FOR SCHOOLS

21 April 23, 2012

• School Contacts

• School Financial Aid Contact Information screen

• Financial Aid Administrator, President, Chief Financial Officer

• CANNOT UPDATE ON COD WEBSITE

• Accurate contact data

• Update via eligcert.ed.gov

• COD email traffic to FAA

• Financial Aid Program Contacts

• Updated and contact data accurate

• Update via the COD Website


Franklin, TN

COD RELEASE 11.0


Franklin, TN

April 23, 2012

COD New Award Year Setup (NAYS)

Award Year 2012-2013

COD RELEASE 11.0

23 April 23, 2012

• Implementation March 9-10, 2012 • Schema 3.0e

• System generated files returned with message class award year designator “13”

• Common Record response files returned in schema of submission

• Award year designator changed to “13” where appropriate elsewhere • MPN ID

• Loan ID

• Funding method remains Advance Cash


Franklin, TN

COD RELEASE 11.0

24 April 23, 2012

• Current Funding Level (CFL)

• Initial CFL generated late March • For schools that had Summer term AY 2011-2012

activity

• Second CFL generated ~ June • ~ 60% of 2011-2012 activity

• Third and last CFL generated ~ November • Remaining ~40% of 2011-2012 activity

• Schools with no 2011-2012 activity or new to program receive $0 CFL • Contact your COD CSR or your FLSST Point of Contact

for assistance


Franklin, TN

COD RELEASE 11.0

25 April 23, 2012

• Allow maintenance on, or change to, a

Pended/Declined PLUS loan

• Web or batch

• Update award, person and disbursement fields

• Change of personal identifiers triggers a credit check

• Credit Check will use the borrower person identifier

change field values (SSN, DOB, Last Name)

• New credit check/decision if none found on COD under

new identifiers and 90 days old or less


Franklin, TN

COD RELEASE 11.0

26 April 23, 2012

• Addition of Enrollment School Code

• Included in new schema 3.0e

• 8-digit OPE ID to identify the physical location of

the student

• Enrollment reporting, delinquency monitoring,

and Gainful Employment information

• Disbursement level reporting

• Batch or web submission

• Returned in the Common Record Response

• Common Record will reject if missing


Franklin, TN

COD RELEASE 11.0

27 April 23, 2012

• New MPN <MPNStatusCode> “E”

• Included in new Schema 3.0e

• PLUS award linked to MPN and an Endorser

• Single Loan MPN

• Returned in COD Common Record response

• Award Year 2012-2013 and forward

• “I” returned for Award Years 2011-2012 and prior


Franklin, TN

NEW LEGISLATION

28 April 23, 2012

The Budget Control Act of 2011

and

The Consolidated Appropriations

Act of 2012


Franklin, TN

NEW LEGISLATION

29 April 23, 2012

• Budget Control Act of 2011 • Dear Colleague Letter GEN 11-16 dated August

31, 2011

• The Budget Control Act of 2011 was signed into law on August 2, 2011 • Termination of Direct loan Repayment Incentives, i.e.,

upfront interest rebate, for loans with an Earliest Disbursement Date (EDD) on or after July 1, 2012

• Loss of eligibility for Subsidized loans for Graduate and Professional students (Grade Level 6 & 7) on loans with a loan period starting on or after July 1, 2012


Franklin, TN

NEW LEGISLATION

30 April 23, 2012

• Consolidated Appropriations Act of 2012 • Dear Colleague Letter GEN 12-01 dated January

18, 2012

• The Consolidated Appropriations Act of 2012 was signed into law on December 23, 2011 • Reduction of duration of Pell Grant eligibility from 18

semesters (900%) to 12 semesters (600%)

• Eliminates Federal student aid eligibility for ATB students

• Temporarily eliminates subsidy on Stafford Subsidized loans during grace period • Loans first disbursed on or after July 1, 2012 and prior to July

1, 2014


Franklin, TN

COD ENHANCED FUNCTIONALITY

31 April 23, 2012

• April 15, 2012 • Addresses the elimination of Direct Loan upfront

interest rebate

• Origination fees remain unchanged • PLUS 4%

• Subsidized & Unsubsidized 1%

• Does NOT address the elimination for Graduate/Professional Student Subsidized Loans • COD will identify any submitted and invalid

Graduate/Professional Student Subsidized Loan and notify the school


Franklin, TN


32 April 23, 2012

• COD will validate the upfront interest rebate percentage and amount vs. EDD on Subsidized & Unsubsidized loans • EDD on or before June 30, 2012

• Upfront interest rebate percentage .5%

• EDD on or after July 1, 2012 • Upfront interest rebate percentage 0%

• Upfront interest rebate amount 0%

• MUST submit both tags and both MUST be populated with 0


Franklin, TN


33 April 23, 2012

• COD will accept upfront interest rebate values of 1.5% OR .0% on Parent and Graduate/Professional Student loans • EDD on or before June 30, 2012

• Upfront interest rebate percentage should be 1.5%

• EDD on or after July 1, 2012 • Upfront interest rebate percentage should be 0%

• Upfront interest rebate amount should be 0%

• MUST submit both tags and both MUST be populated with 0


Franklin, TN


34 April 23, 2012

• COD will begin to generate an “Interest Rebate Percentage” Report • Identifies PLUS Loan originations with an

incorrect upfront interest rebate percentage • EDD on or before June 30, 2012

• Upfront Interest Rebate percentage NOT 1.5%

• EDD on or after July 1, 2012 • Upfront Interest Rebate percentage NOT 0% and amount $0

• Generated weekly on Saturday

• Available in School NewsBox • CSV format


Franklin, TN


35 April 23, 2012

• Example • Undergraduate subsidized loan for award year

2012/2013 submitted April 18, 2012 • Academic Year start/end July 5, 2012-March 31,

2013

• Award start/end July 5, 2012-March 31, 2013

• Anticipated disbursement dates (1) July 5, 2012 and (2) November 30, 2012

• Origination fee 1.0% and instant upfront rebate percentage and amount both 0%

Accepted Rejected


Franklin, TN


36 April 23, 2012

• Example • Parent PLUS loan for award year 2012/2013

submitted April 18, 2012 • Academic Year start/end August 31, 2012-May 31,

2013

• Award start/end August 31, 2012-May 31, 2013

• Anticipated disbursement dates (1) August 31, 2012 and (2) January 3, 2013

• Origination fee 4.0% and instant upfront rebate percentage and amount both 0%

Accepted Rejected


Franklin, TN


37 April 23, 2012

• COD will initiate a weekly report identifying students who have received Pell Grant funding in excess of 450% • Disbursements for AY 2011-2012 and AY 2012-

2013 included

• Available in School NewsBox in CSV format • Only schools with Federal School Code on FAFSA

• Sent to all schools identified on the applicant's highest Pell eligible CPS transaction for Award Year 2012-2013

• Cumulative report • Students could drop off if submissions to COD

change their LEU


Franklin, TN


38 April 23, 2012

• Until NSLDS and CPS enhanced functionality later this Summer, this report is the ONLY means of identifying students nearing their Pell Grant LEU

• The report will be generated until Pell Grant LEU functionality implemented in COD in July, 2012

• COD will be the system of record for Pell Grant LEU


Franklin, TN

PELL LEU SCHOOL REPORT


Franklin, TN


40 April 23, 2012

• COD will begin to send email notification to students with Pell Grant LEU greater than 500%

• Two separate emails to notify students they are approaching, or have exceeded, 600% Pell Grant LEU • LEU > than 500% but < than 600%

• LEU > than 600%

• Students with highest CPS transaction Pell eligible • email address on that CPS transaction


Franklin, TN

COD RELEASE 11.1

41 April 23, 2012

Implementation July 6-7, 2012


Franklin, TN

COD RELEASE 11.1

42 April 23, 2012

• Adds functionality to address loss of eligibility

for Subsidized loans for Graduate and

Professional students

• Grade Levels 6 & 7

• Adds editing functionality to address Pell

Grant duration of eligibility from 18

semesters (900%) to 12 semesters (600%)

• Adds “Financial Awareness Counseling Tool”

to StudentLoans.gov website


Franklin, TN

COD RELEASE 11.1

43 April 23, 2012

• Loss of eligibility for Subsidized loans for Graduate and Professional students

• Loans with loan period beginning on or after July 1, 2012

• Loans with loan period beginning PRIOR to July 1, 2012 not affected

• Annual and aggregate loan limits for Grad and Professional students remain the same

• $20,500 Unsubsidized Loan


Franklin, TN

COD RELEASE 11.1

44 April 23, 2012

• Functionality for reduction of Pell Grant

duration of LEU from 900% to 600%

• COD returns a warning edit when a student’s LEU

is near or exceeds 600%

• COD will return LEU in the Common Record Response

• COD web site display of historical Pell Grant data for a

student to determine how the LEU was calculated

• Additional changes to CPS and NSLDS

• Electronic Announcement February 17, 2012

• Cessation of weekly report


Franklin, TN

COD RELEASE 11.1

45 April 23, 2012

• Adding functionality for requesting to re-open

a closed Direct Loan Award Year via online

COD web

• Easier to re-open an Award Year after your

Program Year Closeout

• No longer need to call your COD CSR of COD

Reconciliation Specialist

• Response will identify the “open window” dates


Franklin, TN

FINANCIAL AWARENESS COUNSELING TOOL

46 April 23, 2012

• Financial Awareness Counseling Tool • Delivered via StudentLoans.gov

• Implementation with COD Release 11.1 • July 6-7, 2012

• Voluntary – NOT MANDATORY • Can’t deny disbursement

• One type of counseling for both Undergraduate and Graduate awards

• Intent is to educate borrowers about their current indebtedness and management of their student loans


Franklin, TN


47 April 23, 2012

• Login to display real time data from NSLDS

• Can go through without login

• No personal data pulled from NSLDS

• No results sent to school(s)

• Basic money management

• Encouragement to borrow only what is necessary

• In school and post graduate budget

awareness


Franklin, TN


48 April 23, 2012

• Repayment calculator

• Repayment plan side-by-side comparison

• CANNOT select repayment plan via in school

counseling

• Intent is to educate borrowers about their

current indebtedness and manage their

student loans

• Access to financial literacy tool and financial

aid process overview


Franklin, TN


49

• Domestic and foreign schools receive

acknowledgments of completion

• Default is opted in

• SAIG mailbox

• COD Newsbox

• COD search function for results

• If school opts out of notification student can

still complete process

April 23, 2012 TASFAA: Working In Harmony

Franklin, TN

FINANCIAL AWARENESS COUNSELING

50 April 23, 2012

Understand

Your Loans

Manage Your

Spending

Plan to Repay

Avoid Default

Make Finances a

Priority

Your Student Loans

Loan Basics

Free Money First

Types of Student

Loans

Manage Your

Spending while in

School

Live Within Your

Means

Borrow Smart

Estimate What You

will Owe, Spend &

Earn

• Monthly Expenses

• Monthly Income

Understand

Repayment

Avoiding Default

Postpone or Lower

Your Payments

Forgive or Cancel

Your Debts

Delinquency &

Default

Plan for the Future

Your Income &

Taxes

Your Credit &

Identity

Credit Cards &

Other Borrowing


Franklin, TN

The Student Will Understand…

MODULE 1: UNDERSTAND YOUR LOANS

51

Their outstanding debt and loan details

That they must repay the money they have received

with interest

The differences between federal and private loans

Ways to maximize their aid/minimize their loans

Common loan terms and concepts

Example “Check Your Knowledge” Questions:

What do you have to repay?

A) Principal B) Interest C) Both principal and interest

Which sources of federal student aid do you repay?

A) Grants B)Work Study C) Student Loans D) All of the above

Jane Doe,

April 23, 2012 TASFAA: Working In Harmony

Franklin, TN

MODULE 2: MANAGE YOUR SPENDING

The Student Will

Understand…

The difference between educational and other

expenses

How to identify all sources of funding

The benefits of paying interest while in school and

reducing interest costs

The benefits of reducing debt and avoiding additional debt

Budgeting basics and factors they can control to make their

budget work

Students will be able to input their

own expense information and the

graphs will dynamically update.

Example “Check Your Knowledge” Question:

Making a budget can help you decide how much money you really need to borrow.

A) Yes B) No

April 23, 2012 52 TASFAA: Working In Harmony

Franklin, TN

MODULE 3: PLAN TO REPAY

The Student Will

Understand…

How to compare repayment plans and estimate their

repayment amount

Their post-graduation expenses and when repayment begins

That their repayment term can impact the total amount

of interest paid

Who their servicer is, what they do, how to contact them,

and how to change a repayment plan

How their projected monthly income compares to their

loan expenses

Different tabs allow students to explore

the relationship between their loan

payments, anticipated expenses and

projected monthly income.


When do you have to start making payments on your subsidized and unsubsidized student loans?

A) 6 months after you leave school or drop below half-time enrollment B) 12 months after you leave school or drop below half-time enrollment C) Never

Who do you contact to select or change your repayment plan?

A) Your Loan Servicer B) Your School’s Financial Aid Office C) the Department of Education

53 April 23, 2012

MODULE 4: AVOID DEFAULT

The Student Will

Understand…

Delinquency, default and the related consequences

How to reduce the likelihood of default

Loan cancellation and forgiveness terms

Deferment and forbearance options

Who to contact about different payment options


How soon after you miss a payment does your loan become delinquent?

A) Immediately B) 30 days C) 90 days D) Never

Even if you are delinquent on your loans, there are steps you can take to avoid default.

A) True B) False

April 23, 2012 54 TASFAA: Working In Harmony

Franklin, TN

MODULE 5: FINANCES - A PRIORITY

The Student Will Understand…

Financial planning, saving, and spending wisely

Tax and its impact on income

How to prevent identity theft

Credit scores and credit basics

Educational tax benefits for parents and students


You should save enough in your emergency fund to cover _______ of expenses.

A) 3 -6 months B) 5 years C) 1 year D) none

Missing payments or being late on payments can result in fees and higher interest rates.

A) True B) False

55 April 23, 2012


Franklin, TN

RESOURCES

56 April 23, 2012

• COD Customer Service

• Ad Hoc reports via request

• Primary Customer Service Representative

• 800.848.0978 (D/L)

• 800.474.7268 (Pell)

• [email protected]

• The COD Reconciliation Team

• Monthly reconciliation/Program Year Closeout

• G5


Franklin, TN

RESOURCES

57 April 23, 2012

• COD web screens and reports

• cod.ed.gov

• Weekly monitoring e-mail to Financial Aid

Administrator


Franklin, TN

RESOURCES

58 April 23, 2012

• Loan Servicing Centers for students

• http://ifap.ed.gov/ifap/helpContactInformatio

nDetailedList.jsp?lsc=2

• Cornerstone (NFP)

• Direct Loan Servicing Center (ACS)

• Department of Education Student Loan

Servicing Center (ACS)

• ESA/EDFinancial (NFP)

• FedLoan Servicing (PHEAA)


Franklin, TN

RESOURCES

59 April 23, 2012

• Loan Servicing Centers for students

• Great Lakes Educational Loan Services, Onc.

• Mohela (NFP)

• NelNet

• SallieMae


Franklin, TN

RESOURCES

60 April 23, 2012

• Federal Loan School Support Team

• Assigned Point of Contact for your school

• [email protected]

• Electronic Announcement dated July 14, 2011

with all the details


Franklin, TN

mailto:[email protected]

RESOURCES

61 April 23, 2012

• Blue Book

• FSA Student Aid Handbook

• Volumes 3 & 4

• Direct Loan School Guide

• 34 CFR

• Part 668 Subpart K – Cash Management

• Part 685 – William D. Ford Direct Loan Program


Franklin, TN

RESOURCES

62 April 23, 2012

• COD Technical Reference

• Volume II

• Implementation Guide

• Message Classes

• Common Record Layout

• Edits

• Volume VI

• Reports


Franklin, TN

RESOURCES

63 April 23, 2012

• Information for Financial Aid Professionals

(IFAP)

• Electronic Announcements

• Dear Colleague Letters

• Web-based training


Franklin, TN

QUESTIONS…


Franklin, TN

Common Origination & Disbursement · Loans eligible for Public Service Loan Forgiveness Program ......

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Transcript of Common Origination & Disbursement · Loans eligible for Public Service Loan Forgiveness Program ......