session #40 a direct loan primer isiah dupree julie aloisio cynthia battle
Post on 18-Dec-2015
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Session #40
A Direct Loan Primer
Isiah DupreeJulie Aloisio
Cynthia Battle
Session OutlineBrief History of Student Aid
Direct Loan Program Overview
Direct Loan Processing Basics
School Setup
Tools & Resources
Direct Loan Servicing
Contact
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Student Aid History
Session OutlineBrief History of Student Aid
Direct Loan Program Overview
Direct Loan Processing Basics
School Setup
Tools & Resources
Direct Loan Servicing
Contact
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Terms and Definitions• CPS Match and Student
Identifiers• Common Record• XML• Origination• Disbursement• Drawdowns• “Booked” Loans
• Message Classes• Reconciliation/Closeout• SAIG• EDExpress
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Roles and Responsibilities• StudentsStudents
– Apply for aid and meet eligibility requirements
– Receive and repay
• SchoolsSchools– Certify eligibility
– Deliver proceeds
– Educate borrowers about their responsibilities
– Send/receive financial and student data to/from Federal Student Aid
– Funds management and reconciliation
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School Responsibilities• What options will best serve your students? • What offices will be involved in the process?
– What will their roles be?– Staffing levels sufficient to support operational
decisions?• Who will conduct your reconciliation?• Who will work your rejects/resolve processing
issues?
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School Responsibilities• How will you process records?
– Process yourself• Software?• Technical support?• How will you back up your data?• Production schedule?
– Third Party Servicer
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Roles and Responsibilities:Federal Student Aid
• Provides operational, system, and service support to schools & borrowers– Eligibility– Funding– Reconciliation/Closeout– Communication/Customer Service– Repayment– Loan Servicing to Borrowers
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Direct Loan Types• Subsidized
– Need-based; no interest charged while in school and during grace periods or deferment
• Unsubsidized– Not need-based; interest charged during all periods
• PLUS– Not need-based; for parents or graduate/professional
students• Consolidation
– Combines loans for easy repayment
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Master Promissory Note (MPN)
• Legal agreement• Multi-year, multi-loan notes
– Exceptions• Plain Language Disclosures• Disclosure Statements
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Subsidized and Unsubsidized Loans
• Enrollment• Eligibility• MPN• Interest• Fees/Rebate• Loan Limits
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Annual Loan Limits
YearDependent
UndergraduateIndependent
Undergraduate
1st Year $3,500 $7,500(maximum $3,500
subsidized)
2nd Year $4,500 $8,500(maximum $4,500
subsidized)
3rd Year and
above
$5,500 $10,500(maximum $5,500
subsidized)
Graduate/ Professional
Student
Up to $20,500 each academic year
(maximum $8,500 subsidized)
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PLUS Loans• Eligibility• Credit Check• Interest• Fees/Rebate• Loan limits
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PLUS Loans• MPN• Borrower Type
– Parents– Graduate/Professional students
• What is the difference between borrower types?
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Consolidation Loans• Combines multiple loans into a new single loan
with one payment
• Both students and parents are eligible to consolidate, but not together
• Similar repayment plans as other loans, but HERA changes have created some differences
• Eligibility depends on the loan types and status as well as borrower qualifications
Session OutlineBrief History of Student Aid
Direct Loan Program Overview
Direct Loan Processing Basics
School Setup
Tools & Resources
Direct Loan Servicing
Contact
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Direct Loan Processing Cycle
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COD Processing• School confirms eligibility, awards,
and disburses aid• School creates student record
– Common Record or COD Web site• School sends information to COD• COD processes/edits and returns
response• Error correction, when necessary
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ISIR
COD Processing
Funding Data and Payment Requests
Central Processing System (CPS)
FAFSA
SAR
COD
Originations, Disbursements & Paper MPNs
Responses
GAPS NSLDS
DLSS
e-MPN
Funding Request
Money
Loans and Disbursements
Loans and Disbursements
Enrollment Status
Electronic Entrance & Exit Counseling
Repayment/
Servicing
Student data
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School Setup Options• Funding
– Advanced Funded vs. Pushed Cash
• Multi-year vs. Single-year
• MPN Processing
• Reports
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Master Promissory NotesAdvantages of Electronic Processing
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Master Promissory NotesMPN versus eMPN Statistics
2006 Statistics24% Paper76% eMPN
2007 Statistics19% Paper81% eMPN
2006 Statistics24% Paper76% eMPN
2007 Statistics19% Paper81% eMPN
Session OutlineBrief History of Student Aid
Direct Loan Program Overview
Direct Loan Processing Basics
School Setup• Application and Decision
• Set-Up
Tools & Resources
Direct Loan Servicing
Contact
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• Certified eligible for Direct Loan?
– Eligibility and Certification Approval Report (ECAR)
– “E-APP for Schools” Web site www.eligcert.ed.gov
School SetupApplication and Decision
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1. E-mail participation request to [email protected]
2. Direct Loan Operations Review
3. Decision Letter
4. PEPS transmits School Information to the COD System
School SetupApplication and Decision
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• Direct Loan ”Banking” information
• GAPS Hotline1-888-336-8930
• Web sitewww.e-grants.ed.gov
School SetupGrant Administration and Payment System (GAPS)
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• Complete or revise SAIG Agreement
– SAIG assigns mailbox (TG#s)
• Arrange for testing of transmissions
• SAIG Customer Service1-800-330-5947
• Web sitewww.fsawebenroll.ed.gov
School SetupStudent Aid Internet Gateway (SAIG)
Session OutlineBrief History of Student Aid
Direct Loan Program Overview
Direct Loan Processing Basics
School Setup
Tools & Resources
Direct Loan Servicing
Contact
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COD Web sitehttp://COD.ed.gov
- Submit & Correct Records, View Batches, Retrieve Reports- Access DL Servicing Website
General Direct Loan Informationwww.ed.gov/offices/OSFAP/DirectLoan/index.html
General Federal Student Aid Informationhttp://www.ifap.ed.gov
- DL Listserv, DL bulletin
Schools Portalhttp://fsa4schools.ed.gov
Tools & ResourcesWeb Sites
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Tools & Resources
• DL Tools–Cash Management Tools–Reconciliation–Rebuild
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• Direct Loan Basics• Entrance and Exit Counseling • To order visit:
www.fsapubs.org
Tools & ResourcesBorrower Publications
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• COD Technical Reference– Implementation Guide
• Direct Loan School Guide• Blue Book• Financial Aid Handbook• NSLDS Enrollment Reporting Guide
Tools & ResourcesSchool Publications
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Direct Loan Information• Regulatory Cites: Code of Federal Regulations 34
– Part 668 provides the general provisions for all the Title IV programs
– Part 685 is specific to the Direct Loan Program• FSA Handbook References
– Origination: Volume 4, Chapter 1– MPNs: Volume 4, Chapter 1– Disbursements: Volume 4, Chapter 2– Cash Management: Volume 4, Chapter 3
Session OutlineBrief History of Student Aid
Direct Loan Program Overview
Direct Loan Processing Basics
School Setup
Tools & Resources
Direct Loan Servicing
Contact
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Account LookupView live account data for students including balances, account status, separation dates, and more.
Reporting ToolsExit & Entrance Counseling Reports
Identify students who have completed Counseling OnlineDelinquency Reports
Detail, Summary, Late Stage Delinquency, and Borrower History
Email SubscriptionReceive email notifications when reports are available online
DL Servicing ResourcesWeb Site HelpGeneral InformationContact Us
Spanish Version
Login to Servicing is through COD
http://www.dl.ed.gov/schools School Services Online
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Direct Loan Servicing School Site School Services Online
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Click here to see Repayment Estimates
School Services OnlineStudent Account Lookup
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Summary Delinquency Report
Late Stage Delinquency Report
School Services OnlineDelinquency Reports
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Stafford Borrower Delinquency Pattern 12 Month Average
0%
5%
10%
15%
20%
25%
30%
35%
31-60 61-90 91-120 121-150 151-180 181-210 211-240 241-270 271-300 301-330 331-360
Days Past Due
Per
cent
age
of T
otal
Del
inqu
ency
School Services OnlineBorrower Delinquency Pattern
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• Pre-Repayment Counseling– Default Propensity Index (DPI) score– We use both Outbound and Inbound calls for
counseling
• 83% of all Default borrowers were not successfully contacted by phone during the 360-day collection effort during delinquency
• Delinquency Counseling– 31 days we begin a series of calls (22 calls)
• High Balance and current cohort year (44 calls) – Letters begin at 7 days delinquent (12)
School Services Online
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• FAFSA • Promissory notes• Entrance Counseling
& Exit Counseling• Repayment
Servicing • Loan Consolidation
Universal single PIN access to all sites
The Direct Loan Program offers online services to borrowers from start to finish.
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http://www.studentaid.ed.gov
Benefits to Borrowers
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• Repayment incentives• Repayment options tailored to individual need (Standard,
Extended, Graduated, Income Contingent, Alternative Repayment)
• Payment due date selection by borrower• Options for receiving bills and/or correspondence
electronically • Electronic Payments (EDA and on-line)• Self-Service tools for borrowers
(telephone voice response system, Web portals)• Online form submission with electronic PIN signatures (forbearance, deferments, EDA, FAFSA)• Loan Consolidation
The Direct Loan Program offers borrowers flexibility.Benefits to Borrowers
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Your AccountView live account data and manage loans online
Question CenterOnline information
resource for borrowers
Download FormsDownload loan-related forms directly, avoiding the time and expense of mailing
Provides over 6 million student borrowers with highly secure on-line services for:http://www.dl.ed.gov
Spanish/English Options Entire site available in Spanish
Loan Consolidation Consolidate existing loans into a single Direct Loan
Online Billing & Payment Receive bills and correspondence electronically, make payments online
Borrower Services Online
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Exit Counseling
Click here to view your Non-Direct Loans
Borrowers are provided with the amount of
their total indebtedness
(Direct Loans, FFEL, and
Perkins) during Exit Counseling
or from the Account
Summary page.
Borrower Services OnlineAccount Information
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Borrowers may select one of our four repayment plans:
•Standard•Extended•Graduated•Income Contingent Repayment (ICR)
Borrowers may also select from any of the four available due dates: 7th, 14th, 21st, or 28th
Borrower Services OnlineRepayment Options
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Direct Loan borrowers can receive their bills and make payments online; and they can choose to receive their Direct
Loan correspondence electronically, all for free.
381,227 online payments were made during the month of July
for a grand total of $96,065,817.69.
Borrower Services OnlineBills and Payments
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Borrower feedback:
I just wanted to congratulate you on providing an excellent way to manage my student loan account. I cannot tell you how much simpler it is for me, knowing I can do everything I need on-line. I don't have to mail anything or call someone -- I just need to log in.
- Troy
958,200 borrowers are receiving a .25%
incentive by enrolling in EDA!
Borrower Services OnlineElectronic Debit Account
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Borrowers can submit Unemployment Deferment and General Forbearance
applications online.
Borrower Services OnlineOnline Form Submission
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Borrower Services OnlineEntrance Counseling
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Borrower Services OnlineExit Counseling
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Call Center Resources for Schools
COD School Relations Centerhttp://www.cod.ed.gov(800) 848-0978
School Services – Direct Loan Servicing
http://www.dl.ed.gov/schools (888) 877-7658
Direct Loan Consolidation Centerhttp://www.loanconsolidation.ed.gov(800) 557-7392
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General Federal Student Aid Informationhttp://www.studentaid.ed.gov (800) 433-7327
COD School Relations-Applicant Services(800) 557-
7394Direct Loan Servicing Center – Borrower Services
http://www.dl.ed.gov (800)848-0979 Direct Loan Consolidation Center
http://www.loanconsolidation.ed.gov (800) 557-7392Federal Student Aid Ombudsman
http://www.ombudsman.ed.gov (877) 557-2575
Direct Loan Informationhttp://www.ed.gov/offices/OSFAP/DirectLoan/index.html
Call Center Resources for Borrowers
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Related Direct Loan Sessions
Session #4Title IV Funding to Schools: From COD to GAPS
Session #24 COD Web Hands On
Session #41Unlocking the Potential of Direct Loan Reports
Session #42 What’s New in Direct Loans for 2008-2009
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Questions or Comments?We appreciate your feedback and comments.
Direct Loan Operations Team can be reached via e-mail at:
Contact Information
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Isiah DupreeSupervisor, Direct Loan [email protected] (202) 377-3137
Julie AloisioManagement/Program Analyst, Direct Loan Operations [email protected](202) 377-3149
Cynthia BattleDirect Loan Servicing (Non-Default Group), [email protected](202) 377-3261