Session DL1

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Session DL-1

• Direct Loan Fundamentals
• David Hebrank
• Wood Mason
• U.S. Department of Education

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Agenda

• Roles and Responsibilities
• Direct Loan Basics
• Processing
• Whats New for 2009-2010
• Tools and Resources

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Roles and Responsibilities

• Students
• Meet eligibility requirements
• Complete counseling
• Sign Master Promissory Note
• Receive and repay

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Roles and Responsibilities

• Schools
• Certify eligibility
• Educate borrowers about their responsibilities
• Deliver proceeds
• Send/receive financial and student data to/from
  Federal Student Aid
• Funds management and reconciliation

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Roles and Responsibilities

• Federal Student Aid provides operational, system,
  and service support to schools
• School Eligibility
• Funding
• Reconciliation/Closeout
• Communications/Publications
• Software/Web-based services
• Customer Service

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Roles and Responsibilities

• Federal Student Aid also provides operational,
  system, and service support to borrowers
• Loan Servicing
• Communications/publications
• Web-based services
• Customer Service

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Agenda

• Roles and Responsibilities
• Direct Loan Basics
• Processing
• Whats New for 2009-2010
• Tools and Resources

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Subsidized and Unsubsidized Loans

• Eligibility
• MPN
• Fees/Rebate
• Loan Limits
• Interest

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PLUS Loans

• Eligibility
• MPN
• Credit Check
• Fees/Rebate
• Loan limits
• Interest

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Consolidation

• Eligibility requirements vary
• Application and MPN completed through Direct Loan
  Consolidation Center
• www.loanconsolidation.ed.gov

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Agenda

• Roles and Responsibilities
• Direct Loan Basics
• Processing
• Whats New for 2009-2010
• Tools and Resources

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Promissory Note
Reconcile
Originate
Disburse (including funding)
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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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School Options for MPN

• Multi-year vs. Single-year
• Recommend Multi-year
• Electronic vs. Paper
• Recommend Electronic
• COD Print vs. School Print
• Recommend COD Print

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eMPN Web site-- www.dlenote.ed.gov
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eMPN Web site--School options
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eMPN Web site--Search
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(No Transcript)
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Promissory Note
Reconcile
Originate
Disburse (including funding)
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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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Processing with the COD System

• Schools submit records via batch or via the COD
  Web site
• Must include person, award, and anticipated
  disbursement information
• Direct Loan awards must be created with correct
  information
• 21 character ID consisting of SSN, Award type,
  Award year, G or E code, and sequence number
• Xxxxx1234S09G12345001

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Processing with the COD System

• Person data
• Identifying information
• Eligibility information
• Award data
• Award type
• Award start/end dates
• Award amount

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Responses

• Schools receive a response that indicates whether
  the records were accepted or rejected
• If rejected, an edit code tells the school what
  is wrong
• For PLUS Loans, the response includes the results
  of a credit check
• Schools receive a response that provides the
  status and expiration date of the MPN

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Processing with the COD System

• COD Web Site
• Promissory note searches
• Perform credit checks and do credit check
  searches
• View and update direct loan origination and
  disbursement data

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COD-Promissory Note Search
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Credit Check Decision
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Direct Loan Information
Person
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(No Transcript)
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Promissory Note
Reconcile
Originate
Disburse (including funding)
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Processing with the COD System

• Disbursement data
• Anticipated vs. Actual
• Disbursement date
• Disbursement amount

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(No Transcript)
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(No Transcript)
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Pending Disbursement Listing

• What Pending disbursements for that period
• When Weekly
• Where SAIG or COD Web
• Why Identify disbursements to be used in
  funding calculations

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Processing with the COD System

• Funding
• Advanced Pay
• School-initiated drawdown
• School determines amount needed
• Pushed Cash
• COD System-initiated drawdown
• COD System determines amount needed

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Funded Disbursement Listing

• What Funded disbursements for that day
• When Daily, as needed
• Where SAIG or COD Web
• Why Identify disbursements used in funding
  calculation

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Promissory Note
Reconcile
Originate
Disburse (including funding)
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Reconciliation and Closeout

• Schools must reconcile each month
• Like balancing the checkbook, but at the school
  level
• Use reports and SAS to research and determine
  timing differences
• Schools must complete closeout and the balance
  confirmation process each year
• Total Net Drawdowns total net disbursements
  0 Ending Cash Balance

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School Cash Activity
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COD Report Selection Screen
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SAS Options Screen
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SAS Report Example
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Direct Loan Tools

• Software available to all schools with
  specialized tools for Direct Loan Processing
• Reconciliation-compare program
• Rebuild
• Cash Management Tools
• Available from fsadownload.ed.gov

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(No Transcript)
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COD Reports
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Direct Loan Newsbox
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Agenda

• Roles and Responsibilities
• Direct Loan Basics
• Processing
• Recent Changes and Reminders
• Whats New for 2009-2010
• Tools and Resources

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Whats New for 2009-2010

• Mask SSN on Direct Loan correspondence
• First five digits will be masked with xs
• 111111111 will become xxxxx1111
• All disclosure statements and non-legal
  correspondence
• MPNs will still contain full SSN in the MPN ID
  and Award ID

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Whats New for 2009-2010

• Up-front Rebate Reduction
• Rebate reduced to 1.0 in 2009
• Subsidized and unsubsidized awards only disbursed
  on or after July 1, 2009
• PLUS award rebate remains 1.5

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Whats New for 2009-2010

• Loan limits have been changed in recent
  legislation, the last change was in the ECASLA
• COD System has been updated but additional
  changes will take place March 2009
• Edit 167 (new)
• Edit 157 (modified)
• Edit 39 (modified)

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Annual Loan Limits
Graduate/ Professional Student
Up to 20,500 each academic year (maximum 8,500
subsidized)
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Whats New for 2009-2010

• Electronic MPN options move to COD Web site
• All school functions will be done on COD Web site
• No separate ID and password needed

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Agenda

• Roles and Responsibilities
• Direct Loan Basics
• Processing
• Recent Changes and Reminders
• Whats New for 2009-2010
• Tools and Resources

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Other Direct Loan Sessions
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Tools Resources-School Web Sites

• COD Web site
• http//cod.ed.gov
• Direct Loan Information
• http//www.direct.ed.gov
• Federal Student Aid Information
• http//www.ifap.ed.gov

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Tools Resources-School Call Centers

• COD School Relations Center
• [phone]
• Direct Loan Servicing-School Services
• [phone]
• Direct Loan Consolidation Center
• [phone]

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Tools Resources-School Publications

• Direct Loan School Guide
• Code of Federal Regulations
• Federal Student Aid Handbook
• COD Technical Reference
• Implementation Guide
• Blue Book
• NSLDS Enrollment Reporting Guide

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Tools Resources-Direct Loan Information

• Direct Loan School Guide References
• MPNs Chapter 2
• Awards and Processing Chapter 3 (forthcoming)
  and Chapter 4
• Funding and Disbursements Chapter 5
• Reconciliation and Closeout Chapter 6
• Borrower Care (Servicing) Chapter 7

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Tools Resources-Direct Loan Information

• Regulatory Cites Code of Federal Regulations 34
• Part 668 (general provisions) and Part 685
  (Direct Loan Program)
• FSA Handbook References
• Origination and MPNs Vol. 4, Chapter 1
• Disbursements Vol. 4, Chapter 2
• Cash Management Vol. 4, Chapter 3

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Tools Resources-Borrower Web sites

• Federal Student Aid Information
• http//www.studentaid.ed.gov
• Direct Loan Servicing Center Borrower Services
• http//www.dl.ed.gov
• Direct Loan Consolidation Center
• http//www.loanconsolidation.ed.gov
• Federal Student Aid Ombudsman
• http//www.ombudsman.ed.gov

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Tools Resources-Borrower Call Centers

• Federal Student Aid Information
• [phone]
• COD School Relations-Applicant Services
• [phone]
• Direct Loan Servicing Center Borrower Services
• [phone]
• Direct Loan Consolidation Center
• [phone]
• Federal Student Aid Ombudsman
• [phone]

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Tools Resources-Borrower Publications

• Direct Loan Basics for Students
• Direct Loan Basics for Parents
• Direct Loan Entrance and Exit Counseling
• Order all Direct Loan publications from FSAPubs
  (www.fsapubs.org)

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Contact Information

• We appreciate your feedback and comments. We can
  be reached at
• david.hebrank_at_ed.gov
• wood.mason_at_ed.gov

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