Session # 4 - Home | FSA Partner Connect

Session # 4

Direct Loan Life Cycle

Wood MasonU.S. Department of Education

Craig RorieU.S. Department of Education


Systems involvedCPSFAFSAISIR

SAIG – TG MailboxCPS dataD/L Data Services and D/L Servicing Delinquency ReportCOD data

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Direct Loan Life CycleSystems involvedCODCommon record

G5Funding

NSLDSEligibilityExit counseling Direct Loan Servicers

Direct Loan Servicers

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In the beginning there was the FASFA…

Before the loan life cycle begins, the borrower needs to submit a Free Application for Federal Student Aid -FASFA

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FASFA RemindersDeadlinesCan submit AY 11/12 – January 1, 2011Last date to submit - June 30, 2012

FAFSA Instructions Available onlinehttp://studentaid.ed.gov/completefafsa

FAFSA on the Web Worksheet

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http://studentaid.ed.gov/completefafsa�


The FASFACollects applicant informationProcessed by Central Processing

System (CPS)Can submit January 1 of AYLatest June 30 of AY All students must complete a FASFA

including parent for Parent PLUS*

* New for 2011-2012

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Central Processing System (CPS)Processes the FAFSA for use in

determining student eligibilityEdits data for errorsCalculates expected family contribution (EFC)Sends output documents, i.e., Student Aid Report (SAR) and Institutional Student Information Record (ISIR)Matches with other databases

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Student Aid Internet GatewayTransmission network across which

Title IV data is exchangedTG MailboxData Point AdministratorEdConnect softwareStore and forward system

Originate

DisburseReconciliation


MPN

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Ent Cslg

Direct Loan Life CycleDirect Loan Origination School determines eligibilitySchool calculates award Amount and type

School “originates” the award Origination is a dated event Financial Award ID CPS transaction number Anticipated/Actual disbursements must

equal loan amount

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Direct Loan Life CycleDirect Loan Origination School transmits Loan Origination

Record (LOR) to COD Via Common Record Entity IDs COD sends a receipt

COD edits the LOR and sends a response Hard rejectWarning reject

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Direct Loan Life CycleDirect Loan OriginationCan be done via batch (Common

Record) Resident software solution COD sends a common record response to

each submitted documentOnline individually All data entered field by fieldWeb generated response option

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Data MatchPerson matched against CPS data

twice… Key identifiers…current SSN, current DOB,

current last name Second match for incoming Direct Loan

award looks at SSN and DOB Changes to key identifiers must follow

prescribed procedure via common record

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Person Menu

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PLUS loan requires credit checkD/L credit check looks for adverse credit

NOT credit worthinessAbsence of credit is not evidence of

adverse creditStands for 90 days on COD websiteDenial linked to academic year submittedApproval linked to submitted loan

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PLUS loan requires credit checkSchool LOR/COD websiteNeed borrower authorization

StudentLoans.govPLUS request process for both Parent and

Grad studentPLUS LOR can be accepted with Adverse

credit decision

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MPN

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Ent Cslg


All MPNs have a 10-year “life”Electronic – StudentLoans.gov Borrower driven - fast and accurateViewable/retrievable/printableExpiration/status on response file

PaperSchool option or borrower demandSchool or COD printsIf school prints, school responsible for note

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School options for MPNsMulti-Year FunctionalityLinks to “active” MPN with furthest expiration dateLinks on SSN, DOB and first two characters of first name

Single-Year functionalityNew MPN each academic year

Single-Loan MPNEndorser associated with PLUS loan

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Search for Promissory Notes

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Originate



MPN

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Ent Cslg


Entrance counseling required for first-year, first-time borrowerFFELP counseling will stand for D/L*Doesn’t have to be ED

website/materialsMUST be appropriate to loan

type/programSCHOOL determines if counseling is

valid or not*Same loan type

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What To Watch For

Funding MethodAdvanced CashCurrent Funding Level (CFL)Corresponding available balance in G5

Calculate immediate needDraw funds from G5Net amountNOT student specific

Flexibility to avoid excess cash

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Pending vs. Actual DisbursementPending disbursement and date is

“anticipated” future disbursement and datePart of LORNo impact on fundingDisbursement Release Indicator = FALSE

No need to change until ready to disburse

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Direct Loan Life CyclePending vs. Actual DisbursementActual disbursement drives fundingDisbursement release indicator = TRUE*Origination fee and upfront instant rebate assessed on EACH actual disbursementDisbursement #1 Sequence #1MUST report within 30 days of eventCan report actual disbursement data up to 7 days prior to eventReport actual date and accurate amount

*Software dependent38

Direct Loan Live Cycle

“Booked” LoanAccepted Origination record, MPN

and 1st DisbursementBinding obligation between borrower

and EDBN document type under batch

searchSystem generated file on first actual disbursement only

Liability for funds with ED

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Originate



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Exit Cslg

Direct Loan Life CycleExit counseling required when no

longer attending or drop below half-timeOffered on NSLDS websiteSession addresses both loan programs

(FFELP and D/L)Subscription to NSLDS Exit Counseling

reports and Delinquency ReportNSLDS NewsLetter #28

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Originate

DisburseServicing


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What You Need To Know

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5 ServicersACSNelnetSallie MaeGreat Lakes Education Loan ServicesFedLoan Servicing (PHEAA)

COD generated D/Ls distributed at booking


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Performance via competitionRewarded for providing excellent

default aversion techniques that deliver desired results

Allocation of volume is performance based

All offer enhanced borrower services and benefits Due date flexibility EDA and other electronic services


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Default/Delinquency ManagementDedicated services to reduce Cohort

Default RateExceeds minimum regulatory due diligence requirementsEducates and informs borrowers as to the tools and options available to assist them in the management of their student loans

Originate



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BusinessOffice

FinancialAid

Office

CODG5

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Direct Loan ReconciliationMonthlyKnow where the money isCompare our Ending Cash Balance (ECB) to data at the schoolFA office and Business Office should reconcile

Identify and resolve discrepanciesDocument task

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Program Year Closeout (PYCO)*$0 ECB$0 unsubstantiated cash$0 Unbooked disbursements

* PYCO date last business day of July of the year following end of the award year


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School Account Statement (SAS)Generated on 1st weekend of the

monthData through end of previous monthSAS for each open award yearDifferent report format optionsReflects official ECB

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COD School Relations CenterWeekly monitoring e-mailsUnsubstantiated cash30-day reporting

COD web screensSummary Financial InformationCash Activity

COD Reconciliation TeamDedicated reconciliation specialistsProblem solving/G5 assistance

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Questions and Comments

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Session # 4 - Home | FSA Partner Connect

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