# Combination Systems Requirements

## Up-Front Interest Rebate Implementation for 2001--2002

## To assist you in making system modifications for the 2001-2002 Program Year implementation of the up-front interest rebate, we are providing you with this section to identify impacts to your system, especially disbursements. This section includes the business rules and calculations for:

## gross disbursement, 

## loan fee, 

## net disbursement, and 

## interest rebate amounts. 

## The net disbursement and interest rebate amount calculations are new for Program Year 2001-2002 and forward because of the up-front interest rebate program.

### Business Rules

-   An up-front interest rebate amount will be calculated at the
    disbursement level by the schools for each Direct Subsidized, Direct
    Unsubsidized and Direct PLUS loan.

-   The up-front interest rebate percentage that is in affect starting
    with 2001-2002 Direct Loans is 1.5% of the gross disbursement
    amount.

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-   The current method to calculate individual Gross Disbursement
    Amounts and the current rounding logic remain as is. The variance is
    still applied to the last anticipated disbursement.

-   The method to calculate the Net Disbursement Amount and Interest
    Rebate Amount is new. The new calculations are explained below.

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```
-   The resulting Loan Fee Amount and Interest Rebate Amount are
    truncated. Truncated means the cents are removed and the remaining
    whole dollar is the amount to use. Do not round up or down.

-   When calculating the Combined Fee/Interest Rebate Amount and the
    Loan Fee Amount, take all results out 3 decimal places to ensure
    consistent results in automated tools such as MS Excel.

-   Twenty new 5-byte fields for the Anticipated Disbursement Interest
    Rebate Amount are added to the 2001-2002 LOR layout for each
    anticipated disbursement. The LOR acknowledgment has not changed.

-   Two new 5-byte fields, Disbursement Actual Interest Rebate Amount
    and Disbursement Actual Interest Rebate Amount-LOC, are added to the
    2001-2002 Disbursement record layout.

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```
-   The size of the Disbursement and Disbursement Acknowledgment record
    layouts is unchanged and remains 152 bytes.

-   Schools send to the LOC the gross disbursement amount, loan fee
    amount, and net disbursement amount for anticipated and actual
    disbursements. Additionally, schools send the interest rebate amount
    for both anticipated and actual disbursements.

### Gross Disbursement Calculations

Gross disbursement calculations do not change with the interest rebate
implementation.

When determining gross disbursement amounts for a loan, dollar figures
are rounded to the nearest dollar and all disbursements are equal with
the exception of the last disbursement, in some cases. This is due to
any variance being applied to the last disbursement.

When computing gross disbursement amounts, use the following
specifications:

**Step 1:** Individual disbursement amount is Loan Amount Approved
divided by the total number of disbursements.

If necessary, truncate any positions that exist past 2 decimal places.

**Step 2**: Round the individual disbursement amount. Rounding occurs at
the 1st and 2nd decimal places to the nearest dollar.

-   If the 1st and 2nd decimal places are 50 or greater, increment the
    1st digit to the left of the decimal sign by one.

-   If the 1st and 2nd decimal places are less than 50, do not change
    the 1st digit to the left of the decimal sign.

**Step 3:** To determine the amount of the last disbursement, multiply
the individual disbursement amount by the number of disbursements.

-   If the sum of the disbursements is greater than the Loan Amount
    Approved, subtract the difference from the last disbursement.

-   If the sum of the disbursements is less than the Loan Amount
    Approved, add the difference to the last disbursement.

> The variance is applied to the last disbursement.

#### Three examples are provided on the next pages.

### Example 1: Determining Gross Disbursement Amount for Two Disbursements

**Loan Amount Approved:** \$2625

**Step 1:** 2625 divided by 2 = 1312.5000

First truncate any positions that exist past 2 decimals as rounding
occurs at the 1st and 2nd decimal places.

> Therefore, 1312.5000 truncates to 1312.50

**Step 2:** Round at the 1st and 2nd decimal places to determine the
individual disbursement amount.

-   If the 1st and 2nd decimal places are .50 or greater, increment the
    1st digit to the left of the decimal sign by 1.

-   If the 1st and 2nd decimal places are less than .50, do not change
    the 1st digit to the left of the decimal sign.

Round 1312.50 to 1313. Therefore, all disbursement amounts are 1313
except the last disbursement.

**Step 3:** To determine the last disbursement amount, multiply the
individual disbursement amount by the number of disbursements.

> Multiply 1313 by 2 = 2626

Since \$2626 is more than \$2625, subtract the difference of \$1. The
last disbursement is equal to \$1313--\$1 or \$1312.

**Final Results:**

1st Gross Disbursement Amount = 1313

2nd Gross Disbursement Amount = 1312

Total Loan Amount = \$2625

### Example 2: Determining Gross Disbursement Amount for Three Disbursements

**Loan Amount Approved:** \$1000

**Step 1:** 1000 divided by 3 = 333.3333

First truncate any positions that exist past 2 decimals as rounding
occurs at the 1st and 2nd decimal places.

> Therefore, 333.3333 truncates to 333.33

**Step 2:** Round at the 1st and 2nd decimal places to determine the
individual disbursement amount.

-   If the 1st and 2nd decimal places are .50 or greater, increment the
    1st digit to the left of the decimal sign by one.

-   If the 1st and 2nd decimal places are less than .50, do not change
    the 1st digit to the left of the decimal sign.

Round 333.33 to 333. Therefore, all disbursement amounts are 333 except
the last disbursement.

**Step 3:** To determine the last disbursement amount, multiply the
individual disbursement amount by the number of disbursements.

> Multiply 333 by 3 = 999
>
> Since \$999 is less than \$1000 you add the difference of \$1. The
> last disbursement is equal to \$333 + \$1 or \$334.

Final Results:

1st Gross Disbursement Amount = \$333

2nd Gross Disbursement Amount = \$333

3rd Gross Disbursement Amount = \$334

Total Loan Amount = \$1000

### Example 3: Determining Gross Disbursement Amount for Six Disbursements

**Loan Amount Approved:** \$22,167

**Step 1:** 22167 divided by 6 = 3694.5000

> First truncate any positions that exist past 2 decimals as rounding
> occurs at the 1st and 2nd decimal places.

##### Therefore, 3694.5000 truncates to 3694.50

**Step 2:** Round at the 1st and 2nd decimal places to determine the
individual disbursement amount.

-   If the 1st and 2nd decimal places are .50 or greater, increment the
    1st digit to the left of the decimal sign by 1.

-   If the 1st and 2nd decimal places are less than .50, do not change
    the 1st digit to the left of the decimal sign.

> Round 3694.50 to 3695. Therefore, all disbursement amounts are 3695
> except the last disbursement.

**Step 3:** To determine the last disbursement amount, multiply the
individual disbursement amount by the number of disbursements.

> Multiply 3695 by 6 = 22170
>
> Since \$22170 is more than \$22167, subtract the difference of \$3.
> The last disbursement is equal to \$3695--\$3 or \$3692.

Final Results:

1st Gross Disbursement Amount = \$3695

2nd Gross Disbursement Amount = \$3695

3rd Gross Disbursement Amount = \$3695

4th Gross Disbursement Amount = \$3695

5th Gross Disbursement Amount = \$3695

6th Gross Disbursement Amount = \$3692

Total Loan Amount = \$22,167

## Net Disbursement Amount, Loan Fee Amount, and Interest Rebate Amount Calculations

Loan fee amount calculations do not change with the interest rebate
implementation. However, net disbursement amount and interest rebate
amount calculations are new.

When determining the Combined Fee/Interest Rebate Amount and Loan Fee
Amount truncate the result. Truncation is using only the whole dollar
part of the amount with no rounding up or down. The combined
fee/interest is a field used to assist in the calculation of the net
disbursement amount.

When calculating individual disbursement loan fee amount, interest
rebate amount, and net disbursement amount, use the following
specifications for all disbursements:

To calculate Net Disbursement Amount:

**Step 1:** Combined Fee/Interest Rebate Amount (go out to 3 decimal
places) = Gross Disbursement Amount x (Loan Fee Percentage -- Interest
Rebate Percentage)

**Step 2:** Truncate the Combined Fee/Interest Rebate Amount

**Step 3:** Net Disbursement Amount = Gross Disbursement Amount --
Combined Fee/Interest Rebate Amount

To calculate Loan Fee Amount:

**Step 4:** Loan Fee Amount (go out to 3 decimal places) = Gross
Disbursement Amount x Loan Fee Percentage

**Step 5:** Truncate the Loan Fee Amount

To calculate Interest Rebate Amount:

**Step 6:** Interest Rebate Amount = Net Disbursement Amount -- (Gross
Disbursement Amount -- Loan Fee Amount)

To calculate from **Net Disbursement Amount to Gross Disbursement
Amount** use the following calculation:

> Net disbursement amount multiplied by 100 divided by 100 minus (Fee% -
> Rebate%)
>
> OR Net disbursement amount divided by .985 = Gross disbursement amount
> (truncated)
>
> Then proceed with Step 1 listed above.

**Example 1: Determining Combined Fee/Interest Rebate Amount,
Disbursement Net Amount, Loan Fee Amount, and Interest Rebate Amount for
Three Disbursements**

+-----+-----+------------+------+-------+--------+------+-----------+
|     |     | # Step 1   | **   | *     | **Step | **   | **Step    |
|     |     |            | Step | *Step | 4**    | Step | 6**       |
|     |     |            | 2**  | 3**   |        | 5**  |           |
+-----+-----+------------+------+-------+--------+------+-----------+
| **D | **G | **Combined | *    | **    | **Loan | *    | *         |
| isb | ros | Fee/       | *Tru | Disb. | Fee**  | *Tru | *Interest |
| .** | s** | Interest** | ncat | Net** |        | ncat | Rebate**  |
|     |     |            | ed** |       | **Am   | ed** |           |
| *   | **D | **Rebate   |      | **Amo | ount** |      | *         |
| *Nu | isb | Amount**   | **Co | unt** |        | **   | *Amount** |
| mbe | .** |            | mbin |       |        | Loan |           |
| r** |     |            | ed** |       |        | F    |           |
|     | *   |            |      |       |        | ee** |           |
|     | *Am |            | **Fe |       |        |      |           |
|     | oun |            | e/** |       |        | **   |           |
|     | t** |            |      |       |        | Amou |           |
|     |     |            | **In |       |        | nt** |           |
|     |     |            | tere |       |        |      |           |
|     |     |            | st** |       |        |      |           |
|     |     |            |      |       |        |      |           |
|     |     |            | **   |       |        |      |           |
|     |     |            | Reba |       |        |      |           |
|     |     |            | te** |       |        |      |           |
|     |     |            |      |       |        |      |           |
|     |     |            | **   |       |        |      |           |
|     |     |            | Amou |       |        |      |           |
|     |     |            | nt** |       |        |      |           |
+-----+-----+------------+------+-------+--------+------+-----------+
| 1   | \$1 | 11         | 17   | 116   | 11     | 35   | 1         |
|     | 167 | 67x(.03-.0 |      | 7--17 | 67x.03 |      | 150--(116 |
|     |     | 15)=17.505 |      | =1150 | =35.01 |      | 7--35)=18 |
+-----+-----+------------+------+-------+--------+------+-----------+
| 2   | \$1 | 11         | 17   | 116   | 11     | 35   | 1         |
|     | 167 | 67x(.03-.0 |      | 7--17 | 67x.03 |      | 150--(116 |
|     |     | 15)=17.505 |      | =1150 | =35.01 |      | 7--35)=18 |
+-----+-----+------------+------+-------+--------+------+-----------+
| 3   | \$1 | 1          | 17   | 116   | 11     | 34   | 1         |
|     | 166 | 166x(.03-. |      | 6--17 | 66x.03 |      | 149--(116 |
|     |     | 015)=17.49 |      | =1149 | =34.98 |      | 6--34)=17 |
+-----+-----+------------+------+-------+--------+------+-----------+
| Tot | \$3 |            |      | 3449  |        | 104  | 53        |
| als | 500 |            |      |       |        |      |           |
+-----+-----+------------+------+-------+--------+------+-----------+

**Example 2:** Determining Combined Fee/Interest Rebate Amount,
Disbursement Net Amount, Loan Fee Amount, and Interest Rebate Amount for
twelve disbursements

+-----+-----+-------------+------+--------+--------+------+--------+
|     |     | # Step 1    | **   | **Step | **Step | **   | **Step |
|     |     |             | Step | 3**    | 4**    | Step | 6**    |
|     |     |             | 2**  |        |        | 5**  |        |
+-----+-----+-------------+------+--------+--------+------+--------+
| **D | **G | **Combined  | *    | *      | **Loan | *    | **In   |
| isb | ros | Fee/**      | *Tru | *Disb. | Fee**  | *Tru | terest |
| .** | s** |             | ncat | Net**  |        | ncat | Re     |
|     |     | **Interest  | ed** |        | **Am   | ed** | bate** |
| *   | **D | Rebate**    |      | **Am   | ount** |      |        |
| *Nu | isb |             | **Co | ount** |        | **Lo | **Am   |
| mbe | .** | **Amount**  | mbin |        |        | an** | ount** |
| r** |     |             | ed** |        |        |      |        |
|     | *   |             |      |        |        | **F  |        |
|     | *Am |             | **Fe |        |        | ee** |        |
|     | oun |             | e/** |        |        |      |        |
|     | t** |             |      |        |        | **   |        |
|     |     |             | **In |        |        | Amou |        |
|     |     |             | tere |        |        | nt** |        |
|     |     |             | st** |        |        |      |        |
|     |     |             |      |        |        |      |        |
|     |     |             | **   |        |        |      |        |
|     |     |             | Reba |        |        |      |        |
|     |     |             | te** |        |        |      |        |
|     |     |             |      |        |        |      |        |
|     |     |             | **   |        |        |      |        |
|     |     |             | Amou |        |        |      |        |
|     |     |             | nt** |        |        |      |        |
+-----+-----+-------------+------+--------+--------+------+--------+
| 1   | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 2   | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 3   | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 4   | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 5   | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 6   | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 7   | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 8   | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 9   | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 10  | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 11  | \$  | 219x(.03-   | 3    | 219-   | 219x.0 | 6    | 216    |
|     | 219 | .015)=3.285 |      | -3=216 | 3=6.57 |      | --(219 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| 12  | \$  | 216x(.03    | 3    | 216-   | 216x.0 | 6    | 213    |
|     | 216 | -.015)=3.24 |      | -3=213 | 3=6.48 |      | --(216 |
|     |     |             |      |        |        |      | --6)=3 |
+-----+-----+-------------+------+--------+--------+------+--------+
| Tot | \$2 |             |      | 2589   |        | 72   | 36     |
| als | 625 |             |      |        |        |      |        |
+-----+-----+-------------+------+--------+--------+------+--------+

## Rounding Logic for Disbursement Amount Calculations Table

The following table provides a summary of the fields that are calculated
when **subsidized/unsubsidized disbursements** are entered or changed:

Loan Fee Percentage = 3 percent and Interest Rebate Percentage = 1.5
percent.

  -----------------------------------------------------------------------
  **Field Name**                **Description**
  ----------------------------- -----------------------------------------
  1st Gross Disbursement Amount Per Gross Disbursement Calculations

  1st Combined Fee/Interest     1st Gross Disbursement Amount multiplied
  Rebate Amount                 by (Loan Fee Percentage minus Interest
                                Rebate Percentage)

  1st Loan Fee Amount           1st Gross Disbursement Amount multiplied
                                by Loan Fee Percentage

  1st Net Disbursement Amount   1st Gross Disbursement Amount minus1st
                                Combined Fee/Interest Rebate Amount

  1st Interest Rebate Amount    1st Net Disbursement Amount minus (1st
                                Gross Disbursement Amount minus 1st Fee
                                Amount)

  2nd Gross Disbursement Amount Per Gross Disbursement Calculations

  2nd Combined Fee/Interest     2nd Gross Disbursement Amount multiplied
  Rebate Amount                 by (Loan Fee Percentage minus Interest
                                Rebate Percentage)

  2nd Loan Fee Amount           2nd Gross Disbursement Amount multiplied
                                by Loan Fee Percentage

  2nd Net Disbursement Amount   2nd Gross Disbursement Amount minus 2nd
                                Combined Fee/Interest Rebate Amount

  2nd Interest Rebate Amount    2nd Net Disbursement Amount minus (2nd
                                Gross Disbursement Amount minus 2nd Loan
                                Fee Amount)
  -----------------------------------------------------------------------

### Rounding Logic for Disbursement Amount Calculations Table (Continued)

  ----------------------------- -----------------------------------------
  Optional:                     

  3rd through 20th Gross        Per Gross Disbursement Calculations
  Disbursements:                

  3rd through 20th Combined     3rd through 20th Gross Disbursement
  Fee/Interest Rebate Amount    Amount multiplied by (Loan Fee Percentage
                                minus Interest Rebate Percentage)

  3rd through 20th Loan Fee     3rd through 20th Gross Disbursement
  Amount                        Amount multiplied by Loan Fee Percentage

  3rd through 20th Net          3rd through 20th Gross Disbursement
  Disbursements                 Amount minus 3rd through 20th Combined
                                Fee/Interest Rebate Amount

  3rd through 20th Interest     3rd through 20th Net Disbursement Amount
  Rebate Amount                 minus (3rd through 20th Gross
                                Disbursement Amount minus 3rd through
                                20th Loan Fee Amount)

  Total Gross Disbursements     Sum of all gross disbursements

  Total Loan Fee Amount         Sum of all loan fee amounts

  Total Interest Rebate Amount  Sum of all interest rebate amounts

  Total Net Disbursements       Sum of all net disbursements
  ----------------------------- -----------------------------------------

### 

### Rounding Logic for Disbursement Amount Calculations Table (Continued)

The following table provides a summary of the fields that are calculated
when **PLUS disbursements** are entered or changed:

Loan Fee Percentage = 4 percent and Interest Rebate Percentage = 1.5
percent.

  -----------------------------------------------------------------------
  **Field Name**                **Description**
  ----------------------------- -----------------------------------------
  1st Gross Disbursement Amount Per Gross Disbursement Calculations

  1st Combined Fee/Interest     1st Gross Disbursement Amount multiplied
  Rebate Amount                 by (Loan Fee Percentage minus Interest
                                Rebate Percentage)

  1st Loan Fee Amount           1st Gross Disbursement Amount multiplied
                                by Loan Fee Percentage

  1st Net Disbursement Amount   1st Gross Disbursement Amount minus1st
                                Combined Fee/Interest Rebate Amount

  1st Interest Rebate Amount    1st Net Disbursement Amount minus (1st
                                Gross Disbursement Amount minus 1st Loan
                                Fee Amount)

  2nd Gross Disbursement Amount Per Gross Disbursement Calculations

  2nd Combined Fee/Interest     2nd Gross Disbursement Amount multiplied
  Rebate Amount                 by (Loan Fee Percentage minus Interest
                                Rebate Percentage)

  2nd Loan Fee Amount           2nd Gross Disbursement Amount multiplied
                                by Loan Fee Percentage

  2nd Net Disbursement Amount   2nd Gross Disbursement Amount minus 2nd
                                Combined Fee/Interest Rebate Amount

  2nd Interest Rebate Amount    2nd Net Disbursement Amount minus (2nd
                                Gross Disbursement Amount minus 2nd Loan
                                Fee Amount)
  -----------------------------------------------------------------------

### Rounding Logic for Disbursement Amount Calculations Table (Continued)

  ----------------------------- -----------------------------------------
  Optional:                     

  3rd /4th Gross Disbursements: Per Gross Disbursement Calculations

  3rd /4th Combined             3rd /4th Gross Disbursement Amount
  Fee/Interest Rebate Amount    multiplied by (Loan Fee Percentage minus
                                Interest Rebate Percentage)

  3rd /4th Loan Fee Amount      3rd /4th Gross Disbursement Amount
                                multiplied by Loan Fee Percentage

  3rd /4th Net Disbursements    3rd /4th Gross Disbursement Amount minus
                                3rd /4th Combined Fee/Interest Rebate
                                Amount

  3rd /4th Interest Rebate      3rd /4th Net Disbursement Amount minus
  Amount                        (3rd /4th Gross Disbursement Amount minus
                                3rd /4th Loan Fee Amount)

  Total Gross Disbursements     Sum of all gross disbursements

  Total Loan Fee Amount         Sum of all loan fee amounts

  Total Interest Rebate Amount  Sum of all interest rebate amounts

  Total Net Disbursements       Sum of all net disbursements
  ----------------------------- -----------------------------------------

## Leap Year Logic

EDExpress uses the following date format and leap year logic in the date
fields on its databases:

-   The date field format is **CCYYMMDD**

-   For (**CC**), the date field must contain only: 19 or 20

-   For (**YY**), the date field must contain only: 00 - 99

-   For month (**MM**), the date field must contain only: 01 - 12

-   For day (**DD**), valid range depends upon month as follows:

+-------------------------+--------------------------------------------+
| **[Month]{.underline}** | **[Valid Day Range]{.underline}**          |
+-------------------------+--------------------------------------------+
| 01                      | 01 - 31                                    |
+-------------------------+--------------------------------------------+
| 02                      | 01 -- 28                                   |
|                         |                                            |
|                         | (unless year is divisible by 4 when 01 -   |
|                         | 29 is valid)                               |
+-------------------------+--------------------------------------------+
| 03                      | 01 - 31                                    |
+-------------------------+--------------------------------------------+
| 04                      | 01 - 30                                    |
+-------------------------+--------------------------------------------+
| 05                      | 01 - 31                                    |
+-------------------------+--------------------------------------------+
| 06                      | 01 - 30                                    |
+-------------------------+--------------------------------------------+
| 07                      | 01 - 31                                    |
+-------------------------+--------------------------------------------+
| 08                      | 01 - 31                                    |
+-------------------------+--------------------------------------------+
| 09                      | 01 - 30                                    |
+-------------------------+--------------------------------------------+
| 10                      | 01 - 31                                    |
+-------------------------+--------------------------------------------+
| 11                      | 01 - 30                                    |
+-------------------------+--------------------------------------------+
| 12                      | 01 - 31                                    |
+-------------------------+--------------------------------------------+

## Importing Data into the EDExpress Direct Loan Software

Interfacing your institution's system with EDExpress allows you to take
advantage of the built-in edits and PC communication software. It
reduces the data preparation effort by importing student data from your
existing systems into EDExpress. After processing Direct Loan records
with EDExpress, you can create a customized export file to share the
data with your other institutional systems.

Certain borrower information is required before you can originate a
loan. This information includes data about the borrower such as the
name, address, date of birth, citizenship, and year in college. Also, it
includes information specific to the loan such as the loan amount
approved***,*** ~~and~~ loan period start and end dates***, and assumed
MPN status***. When creating the import file, please refer to the column
marked 'required field' in the External Import Loan Origination Add file
(DIEA) record layout.

As an EDExpress user, you have the following three options when entering
data required to originate a Direct Loan:

1.  Key enter data from the SAR and other hardcopy documents

2.  Import data from EDExpress\' ISIR and/or packaging system databases

3.  Import data from an institutional system (External System)

The following specifications address the third option - importing data
from an institutional system. For information regarding the first and
second options, please refer to the online Help in the Direct Loan
software.

**Notes:**

-   EDExpress automatically performs origination for all records
    containing all of the required origination fields. This step is
    performed during the import process for all records with a loan
    origination status of N.

-   If your institution chooses to fill field #1 with a preassigned Loan
    ID, you may assign any loan sequence number (001-999). However, we
    strongly recommend that you start loan sequence number creation with
    001 and do not start with 101.

If you have developed systems to capture information required to
originate a loan, two general import capabilities are available.

### Importing New Records

This import option allows you to add records to the EDExpress Direct
Loan database. You must create a file of borrower records according to a
standard file layout. See the Combination Layout Section for layout and
file creation specifications. If the record passes reject editing and a
Loan ID is not specified in the import file, the loan record is added to
the EDExpress database and a 21-digit Loan ID is assigned. The Loan ID
is important to systems interfacing with EDExpress because it is needed
when making changes to existing records.

When a loan record is imported, EDExpress searches for records with an
identical student\'s SSN, Loan Type, Loan Year, and Direct Loan School
Code. If there is no match, EDExpress assigns 001 as the Loan Sequence
Number.

If EDExpress discovers a match on a student\'s SSN, Loan Type, Loan
Year, and Direct Loan School Code, it proceeds using your selected add
options. You request to be prompted for duplicates by selecting "Y."

-   You can request EDExpress to create a new loan record when a
    duplicate record is found by selecting "C" (***Create All***). When
    a duplicate is found, EDExpress assigns the next highest Loan
    Sequence Number.

-   You can request EDExpress to skip the duplicate by selecting "N"
    ***(Skip Duplicate Record)***. The record is skipped and counted on
    the Import Add Report as a skipped record.

Imported records must adhere to the External Import Add Record layout.
EDExpress prompts you for a filename. Once a filename is provided,
EDExpress performs a series of edits and calculations on each record of
the imported file.

An Add Edit Report is created for each file of imported records. This
report identifies rejected records and provides statistics on the number
of records added to the database. The format of the Loan Origination Add
Edit Report is provided in the Appendix.

**Notes:**

-   EDExpress maintains separate records for each borrower loan type.
    For example, if a student borrower is approved for a subsidized
    loan, unsubsidized loan, and PLUS loan, three records are imported
    to EDExpress, one for each loan type. For each imported record, a
    record is established in the Loan Origination database.

-   For all loan types, the Loan Origination database maintains
    demographic information about the borrower. In addition, student
    demographic information is maintained for PLUS loans.

    ![](media/image1.wmf)

## *Originating and Determining MPN Status within EDExpress*

***New for 2001-2002: Upon Origination, EDExpress determines the MPN
status of a loan and updates the MPN status field. This is the MPN
status for the loan record until the record is exported and acknowledged
by the LOC.***

***The criteria EDExpress uses to determine the MPN status of a loan is
based on whether you have indicated that you process loans using
multi-year functionality or single-year functionality in Direct Loan
Setup.***

## *Indicating in EDExpress Multi-Year or Single-Year Functionality*

***New for 2001-2002: A field is added to Direct Loan System Setup
asking "Do you use multi-year MPNS at your school?" This field is a
checkbox. If you process MPNs using multi-year functionality, mark the
box. If you process MPNs using single-year functionality, leave the box
empty.***

***EDExpress defaults to a marked box indicating yes, school is using
multi-year functionality.***

#### Multi-Year Functionality

***Determining the MPN Status for schools using multi-year functionality
is a two step decision making process within EDExpress.***

***First, EDExpress checks for other existing originated subsidized or
unsubsidized loans for the student. When another loan exists within
EDExpress for a student, EDExpress reviews the MPN Status of the
existing loan.***

  --------------------------------- -------------------------------------
  ***IF...***                       ***THEN...***

  ***The MPN Status of the existing ***EDExpress updates the MPN Status
  loan indicates a valid MPN exists of the originating loan to "T,"
  or assumes a valid MPN exists (A, assumes a valid MPN exists***
  P, S, M, or T)***                 

  ***The MPN Status of the existing ***EDExpress sets the MPN Status of
  loan indicates no valid MPN       the originating loan to "R," ready to
  exists (R or N)***                print and a new MPN can be printed***
  --------------------------------- -------------------------------------

***When no other loan(s) exist within EDExpress for a student, EDExpress
reviews the ISIR MPN Indicator if ISIRs were imported into EDExpress.***

  --------------------------------- -------------------------------------
  ***IF...***                       ***THEN...***

  ***The ISIR MPN Indicator         ***EDExpress updates the MPN of the
  indicates an active MPN at the    originating loan to "T" assumes a
  LOC (A)***                        valid MPN exists***

  ***The ISIR MPN Indicator is      ***EDExpress sets the MPN Status of
  blank or indicates no valid MPN   the originating loan to "R," ready to
  (I, C, N, or U)***                print and a new MPN can be printed***
  --------------------------------- -------------------------------------

#### Single-Year Functionality

***When determining the MPN Status of a loan at a school using
single-year functionality, EDExpress looks for other originated
subsidized or unsubsidized loans for the student with the same academic
year within EDExpress.***

+---------------------------------+------------------------------------+
| ***IF...***                     | ***THEN...***                      |
+---------------------------------+------------------------------------+
| ***No other loans exist for     | ***EDExpress sets the MPN Status   |
| this student within             | of the originating loan to "R,"    |
| EDExpress***                    | ready to print and a new MPN can   |
|                                 | be printed***                      |
+---------------------------------+------------------------------------+
| ***Another loan exists and the  | ***EDExpress sets the MPN Status   |
| academic year start and end     | of the originating loan to "R,"    |
| dates do NOT match the loan     | ready to print and a new MPN can   |
| being originated***             | be printed***                      |
+---------------------------------+------------------------------------+
| ***Another loan exists and the  |                                    |
| academic year start and end     |                                    |
| date match the loan being       |                                    |
| originated and EDExpress        |                                    |
| reviews the MPN Status of the   |                                    |
| existing loan***                |                                    |
+---------------------------------+------------------------------------+
| > ***If the MPN Status of the   | ***EDExpress updates the MPN       |
| > existing loan indicates a     | Status of the originating loan to  |
| > valid MPN exists or assumes a | "T," assumes a valid MPN exists*** |
| > valid MPN exists (A, P, S, M, |                                    |
| > or T)***                      |                                    |
+---------------------------------+------------------------------------+
| > ***If the MPN Status of the   | ***EDExpress sets the MPN Status   |
| > existing loan indicates no    | of the originating loan to "R,"    |
| > valid MPN exists (R or N)***  | ready to print and a new MPN can   |
|                                 | be printed***                      |
+---------------------------------+------------------------------------+

***Note: For schools implementing single-year functionality the ISIR MPN
Indicator is not used in the process to determine if a new MPN should be
printed.***

### *Exporting the MPN Status to the LOC*

***EDExpress exports the determined MPN status for a loan to the LOC via
the Loan Origination record.***

***When the loan is accepted by the LOC, the LOC links the loan to a
MPN, if possible. The Loan Origination Acknowledgement (DISF02OP)
contains the LOC's MPN status for the loan record.***

***Upon import of the LOC Loan Origination Acknowledgement EDExpress
updates the MPN Status of a loan.***

  ----------------------------------- -----------------------------------
  ***IF LOC MPN Status imported       ***THEN EDExpress Updates to:***
  is:***                              

  ***A = Accepted MPN at the LOC***   ***A = Accepted by the LOC***

  ***P = MPN not on file at the       ***R = Ready to Print***
  LOC***                              

  ***I = Inactive***                  ***R = Ready to Print***

  ***C = Closed***                    ***R = Ready to Print***

  ***Q = Rejected***                  ***R = Ready to Print***

  ***X = Pending MPN at the LOC***    ***X = Pending***
  ----------------------------------- -----------------------------------

**Exchanging Loan Origination Records with the LOC**

You transmit a loan origination record to the LOC for each originated
loan. If you request the LOC to print promissory notes, your request is
part of the loan origination record. If you print your borrower's
promissory notes, the loan origination record can be transmitted before
or after the student signs the note. However, the LOC must receive the
loan origination record, promissory note, and disbursement record before
it can book the loan.

Two types of loan origination records can be exported to the LOC:

-   Full Loan Origination Record

-   Loan Origination Change Record

### Submitting Full Loan Origination Records to the LOC

For each new loan, subsidized, unsubsidized and PLUS, you must send a
Full Loan Origination Record to the LOC. The Full record contains all of
the demographic information about the borrower, as well as anticipated
loan disbursement data, required to originate the loan. Data on each
record must be edited to adhere to the field length, field type, and
valid field content specifications. ***In addition, upon origination,
EDExpress determines the assumed MPN status for subsidized and
unsubsidized loans. (The process for determining the MPN Status is
explained later in the MPN text of this section.)***

Full Loan Origination Records are transmitted in two types of files. All
of the subsidized and unsubsidized records are transmitted in a file
with a message class of DESF02IN. All PLUS records are transmitted in a
file with a message class of DEPF02IN.

**New for 2001-2002:** Loan records marked by the user as inactive on
the Loan tab are excluded from the Loan Origination export to the LOC
from EDExpress.

Schools can perform credit checks for PLUS borrowers by using the LO
Online Web Application. Schools have the option to submit credit check
requests via the LO Online Web Application or to submit Full Loan PLUS
Origination Records to the LOC for the LOC to perform the credit check
request. Schools are given the capability to receive a credit decision
through an interactive Web-based application. The Web page accesses an
approved credit bureau and returns a credit acknowledgement to the
school. The Web page displays the credit decision of approved (accepted)
or denied (failed). The reason for a failed credit decision is not
displayed.

When the school receives a failed credit decision from the LO Online Web
Application, the Full Loan PLUS Origination Record can be submitted to
the LOC (so that the LOC can send an endorser form to the borrower) or
the school may decide to originate additional unsubsidized loans for the
student. The Full Loan PLUS Origination Record must be sent to the LOC
if the borrower requests an endorser.

The credit decision received from the LO Online Web Application does not
have to be forwarded to the LOC. The LOC receives a simultaneous
response from the credit bureau at the time the school performs the
credit check. The LOC stores the credit decision and sends necessary
letters to the borrowers.

**Note:** Certification must be kept at the school, indicating that the
borrower has authorized the school to perform the credit check and also
indicating whether or not the borrower wants an endorser in the case of
a failed credit decision.

### Receiving Full Loan Origination Acknowledgements from the LOC

The LOC returns one acknowledgement record for each Full Loan
Origination Record it receives. Batch integrity is maintained; the
school receives acknowledgement records for all transmitted records in
the batch.

These records are received in message class DISF02OP for subsidized and
unsubsidized records and DIPF02OP for PLUS records. These records
indicate whether the origination record is rejected or accepted. For
PLUS records, the Full Loan Origination Acknowledgement also indicates
whether the credit check is accepted, denied or pending. ***For
subsidized and unsubsidized loans, the Full Loan Origination
Acknowledgement also indicates the LOC's MPN Status for the loan.
(Further information about this process is explained later in the MPN
text of this section.)***

If a credit decision is overridden (modified) for a PLUS record, a
separate PLUS Credit Decision Acknowledgement is received from the LOC
(message class DIPC02OP). The PLUS Credit Decision Acknowledgement is
transmitted to you at any time after the initial decision has been
received on the Full Loan Origination Acknowledgement.

Once the Full Loan Origination record is accepted by the LOC, it should
not be sent to the LOC again. If changes need to be sent to update
information on the record, a change record described below must be sent
to the LOC. When a Full Loan Origination record is rejected by the LOC,
it is not kept on file in the LOC System. The record errors need to be
corrected and the updated Full Loan Origination record transmitted to
the LOC with the message class DESF02IN/DEPF02IN.

**New for 2001-2002:** The LOC processes credit check requests within
hours and acknowledges PLUS loan records within 24 hours of receipt at
the LOC. If a credit decision other than accepted or denied is received,
the LOC acknowledges the accepted PLUS loan record with a pending credit
check status.

### PLUS Credit Decision Update (Override) Acknowledgement

For any previously accepted PLUS Full Origination records with a pending
or denied credit decision, the borrower may request a subsequent credit
check, an override, or submit an endorser addendum. Under these
circumstances, the LOC returns a PLUS Credit Decision Update
Acknowledgement. The Credit Decision Update Acknowledgement indicates
one of the following statuses:

-   C = (Credit overridden, new credit information provided),

-   D = (Credit denied, endorser not okay),

-   N = (Credit denied; after pending), or

-   E = (Credit overridden, endorser OK).

The Credit Decision status indicates the results of PLUS Loan credit
checks on the parent borrower or endorser.

For approved applicants, you can proceed to the disbursement of funds.
The LOC sends further information and instructions directly to those
applicants not approved for a PLUS loan on the basis of credit checks.
The LOC has the option to override the credit decision after an initial
denial. The PLUS Credit Checks can be updated at any time on the basis
of the borrower submitting supporting documentation to the LOC or credit
reporting agency.

If you process PLUS loans, you may receive updated credit decisions in
this acknowledgement file with message class DIPC02OP at any time from
the LOC.

## Loan Origination Change Record

Once the Full Loan Origination Record is accepted by the LOC, changes to
the borrower\'s demographic or loan information requires a change record
be sent to the LOC. Loan Origination Change Records are transmitted in a
separate message class DESC02IN.

Each change record contains the borrower\'s loan identification
(necessary to identify the record on the LOC\'s databases), the number
associated with the field being corrected, and the corrected value.

**New for 2001-2002:** Some data fields can be updated by a school on
the LO Online Web Application. Further information on this new process
will be forthcoming.

**Importing Changes to Existing Records**

This import option allows you to submit changes from your school's
systems to the EDExpress Direct Loan database. To perform this option,
you must create a file of borrower records according to a standard file
layout. Each record must contain the borrower\'s loan identification
number, field number associated with the field to be updated, and the
updated value.

Use the External Import Change record layout and the table of Loan
Origination Import Change Field Numbers to create your change record.
These can be found in the Combination Layouts section of this technical
reference.

To import most efficiently, you should import the records in Social
Security Number order, and the fields to be updated within each change
record should appear in numerical order. For example, if you are
changing fields S013 (Borrower\'s Telephone Number) and S101 (Student's
Local Address City), field S013 should appear first in the change record
followed by field S101.

Each change record contains space for up to 10 data element changes.
Multiple change records can be exported for a Loan ID if more than 10
changes are required.

Corrected values must be left justified within the 50-byte change value
field. Numeric fields are left justified and blank filled up to the
maximum number of positions for that field.

For example, when correcting a 5-byte numeric field to a value of '900,'
the correction record would display 00900 with 45 blank spaces.

**Example:**

Two changes are submitted to a loan record whose ID is
012345678U02G99999001:

-   a change in the borrower\'s last name to SMITH, and

-   a change in the 1^st^ disbursement anticipated gross amount to
    \$900.

The following would be the contents of the change record excluding the
create time, batch number, and User ID fields at the end of the record:

### 

### 

### ![](media/image2.wmf) {#section-3 .unnumbered}

### Receiving Loan Origination Change Acknowledgements from the LOC

The Loan Origination Change Acknowledgement (DIOC02OP) has the same
record layout as the record layout used to transmit the change record to
the LOC. The acknowledgement record indicates whether each change is
accepted or rejected. Rejection codes are associated with each rejected
field.

-   If the change is accepted, then there are no reject codes associated
    with that field.

-   If a change is rejected, then it must be corrected and only the
    fields that were in error need to be resent to the LOC as change
    records.

**New for 2001-2002:** A school can process some change records via the
LO Online Web Application. On the Web site, a school is provided the
option to print a listing of the changes made on the Web site. Remember
to update your EDExpress database to agree with any changes made on the
Web site to keep your database in sync with the LOC. Changes made on the
Web site do not generate a Change Acknowledgement.

## Processing Promissory Notes

All Master Promissory Notes (MPN) and PLUS Promissory Notes must be
mailed to the LOC and accepted before the loans are booked. The hardcopy
MPNs/promissory notes must be accompanied by a paper manifest that lists
the borrower\'s name and MPN ID or PLUS Loan ID for each promissory note
in the shipment. Also, the paper manifest provides a certification to be
signed by an official at the school.

Master Promissory Notes and PLUS Promissory Notes must be batched
separately and a separate paper manifest created for each. Each batch
may contain up to 100 notes. Additionally, separate batches (manifests)
must be created for each Direct Loan school code. The MPN/Promissory
Note Manifest option is available through the EDExpress Print process.
The format for the Master Promissory Note manifest and the PLUS manifest
are provided in Appendix D.

**Note:** For Standard Origination Schools, the LOC prints for and
collects from the borrower the MPNs and PLUS promissory notes.
Therefore, Standard Origination schools do not generate paper promissory
note manifests, and schools do not mail notes to the LOC.

### Receiving Promissory Note Acknowledgements

The LOC returns an electronic file (DIPA02OP) containing the
acknowledgement of any MPN/PLUS Promissory Notes processed by the LOC.
This acknowledgement contains a batch ID generated by the LOC. Batch
integrity does not exist between the paper notes and the MPN/PLUS
Promissory Note Acknowledgement. Acknowledgements do not match one to
one with paper manifests sent by the school.

### Promissory Note Status

The DIPA02OP file contains a code in field #4 (Promissory Note Status)
that returns one of three values: A (Accepted), X (Pending), or R
(Rejected). Pending indicates that the promissory note is accepted but
there is no Loan Origination record at the LOC to link to this
promissory note.

### Promissory Note Reject Codes

Promissory Note Reject Codes indicate why a note is rejected. If a note
is rejected, a new MPN/PLUS Promissory Note must be printed with the
corrected data and resubmitted to the LOC.

Promissory Note Reject Codes are mainly handled through a manual
process. However, there are two electronic error codes that are received
at the LOC, error codes "01" and "S." Once the notes are received in the
mailroom, the notes are manually inspected for missing or incorrect
information. A generic checklist is used. If it is determined that there
are errors or information is missing, the checklist is marked in the
appropriate blank describing the error that needs to be corrected.

The checklist and MPN/PLUS Promissory Note are returned to the school or
borrower (Standard Origination Schools). A copy of the Checklist used by
the LOC is provided in Appendix D. See the Custom Edit Section for
Promissory Note Reject Reasons.

### Master Promissory Note 

The Master Promissory Note (MPN) is a legal document requiring the
borrower to repay the funds borrowed under the Direct Loan Program. The
MPN is the only approved promissory note for Direct Subsidized and
Unsubsidized Loans for all schools. The MPN must be printed by the
school or the LOC and signed by the student borrower before disbursement
of a subsidized loan or an unsubsidized loan. Schools process MPNs using
either multi-year note functionality or single-year note functionality.

No change is being made to the MPN data elements. As in the past, the
school prints the MPN based on the completed loan origination record. No
dollar amount is printed on the MPN by the school or the LOC and only
one note is used for both subsidized and unsubsidized loans.

The MPN ID prints on the MPN. This identification is used by the LOC to
link loans to the MPN. For printed MPNs for 2000-2001 and forward, the
format of the MPN ID changed to use "M" as the MPN indicator instead of
"S" or "U" in the loan type code field.

**Note:** MPNs are linked to a Loan Origination record by the LOC using
the first three letters of the First Name. If the First Name field is
blank on the Loan Origination Record or on the MPN, the LOC links using
the first three letters of the Last Name.

#### Multi-Year Functionality

Multi-Year use of the MPN applies to all four-year and
graduate/professional schools that are not subject to an emergency
action or limitation, suspension or termination (LS&T) action per Direct
Loan regulations. Any school requesting an exception to this regulation
may contact the Direct Loan Operations Staff at 202/708-9951.

If a borrower is attending a school eligible for multi-year
functionality, the borrower may have only one open MPN on file at the
LOC for all subsidized and unsubsidized loans disbursed for academic
year 1999-2000 and forward. For example, the open MPN at the LOC can be
an MPN processed for academic year 2000-2001. The 2000-2001 loans and
forward are linked by the LOC to this open MPN.

An open MPN on file at the LOC is assigned to the borrower and is not
limited for use at a specific Direct Loan school. Therefore, any MPN
accepted by the LOC can be used by a Direct Loan school eligible for MYN
functionality. Thus, all loans for a student are linked to the same MPN
across schools and academic years.

**New for 2001-2002:** An MPN Indicator is being added to the
Institutional Student Information Record (ISIR). The ISIR MPN Indicator
tells the school whether a valid MPN is on file at the LOC for a
specific student. The values for this indicator are: A -- Valid MPN on
file at the LOC, C -- Closed MPN at LOC, I -- Inactive MPN at LOC,
~~and~~ N -- Valid MPN not on file at LOC, ***U - Unavailable (data is
unavailable at NSLDS) or Blank.***

***Upon importing ISIR data into EDExpress, the ISIR MPN Status is
stored within EDExpress and can be viewed from the Loan tab under View,
NSLDS on the top tool bar. This ISIR MPN Status is used by EDExpress to
determine if a MPN needs to be printed for a loan record. In addition,
the ISIR MPN Status is listed as a demographic field for queries and
external export.***

***Note: The ISIR MPN Status can be imported into EDExpress only through
the ISIR Import process. Schools with external systems use the External
Import Add or Change file and import a MPN Status of "T."***

#### Single-Year Functionality

If a school is NOT eligible for MYN functionality (single-year school),
a new MPN must be generated each academic year for each borrower. A
single-year school must use an MPN generated at or for that school only.
A single-year school can link all subsidized and unsubsidized loans for
the same academic year, for the same student to the same MPN. The
academic year start and academic year end dates must be the same on all
loan records linked to a specific MPN.

#### Valid MPN

An open MPN is valid for up to 10 years from the date of the first
anticipated disbursement if an actual disbursement has been made for any
associated loan origination record. If a student wishes to close an MPN,
he or she must provide a request in writing to close an MPN to the
Direct Loan Servicing Center or to the school. If the closed
notification is received at the school, the school must forward the
original documentation to the LOC. Once an MPN has been closed, no new
loans can be linked to the closed MPN. A new MPN must be generated if
new loans are originated. However, all disbursements and booking
activities for the loans already linked to the closed MPN continue to be
processed by the LOC.

## Reporting Disbursements

**Note:** The Actual Disbursement Record cannot be accepted by the LOC
until they have accepted the Loan Origination Record.

Before the LOC can \"book\" a loan, the LOC needs three essential
components:

1\. An accepted Loan Origination Record

a\) Approved Credit Decision (PLUS ONLY)

2\. An accepted MPN/PLUS Promissory Note

3\. An accepted Actual Disbursement Record

Once an Option 1 or 2 school has verified a completed and signed
MPN/PLUS Promissory Note is on file as well as other eligibility
verification required by regulations (e.g., student enrolled at least
half-time), it can make a loan disbursement to the student or parent
(either by check or by crediting the student\'s account).

### LOC Disbursement Record Types

Actual Disbursement Records must be submitted and accepted for each
disbursement transaction. Each disbursement and adjustment books
separately.

There are six LOC Disbursement Records:

1.  Disbursement = record type D (Batch Type #H)

2.  Adjusted Disbursement Amount = record type A (Batch Type #H)

3.  Adjusted Disbursement Date = record type Q (Batch Type #H)

4.  Booked Disbursement = record type L (Batch Type #B)

5.  Booked Adjusted Disbursement = record type M (Batch Type #B)

6.  Servicer Refund = record type P (Batch Type SP)

A Disbursement Record contains data for the initial disbursement for a
given disbursement number.

An Adjusted Disbursement Amount Record is sent to the LOC when the
amount of a disbursement needs to be increased or decreased. This
includes disbursements being adjusted to zero. For more information, see
the *DL School Guide* and the appropriate DL Bulletins.

An Adjusted Disbursement Date record is sent to the LOC when the date of
an original actual disbursement needs to be changed. This record type is
transmitted after an actual disbursement is sent to and accepted by the
LOC.

#### Booking Notification

A Booked Disbursement record (record type L) or Booked Adjusted
Disbursement record (record type M) is generated by the LOC providing
the booked date for an actual disbursement or an actual adjusted
disbursement. The record updates the EDExpress database with the
disbursement or adjustment booked date. It is important to import
booking notification acknowledgements on a timing basis. Otherwise,
disbursements and adjustments booked at the LOC may display as unbooked
in EDExpress.

***Servicing Refund***

A Servicing Refund record (record type P) is generated by the LOC when a
borrower makes a payment to Servicing by the borrower within 120 days of
disbursement. This transaction does not update the disbursement amounts
recorded on the EDExpress database. This record is to inform you that
the student has additional loan eligibility for the current year.
EDExpress allows the Loan Amount Approved for this loan to include this
additional refunded amount in the annual loan limit for this loan if the
borrower decides to borrow additional funds.

**Note:** This transaction should not be returned to the LOC.

#### Disbursement Record Type "Q"

Disbursement type "Q" (Adjusted Disbursement Date) has been added for
making adjustments to the actual disbursement date. In order to change
the disbursement date, the school should use disbursement record type
"Q" to show the correct actual disbursement date. The "Q" transaction
can only be used after the school has sent an actual disbursement and
received the disbursement acknowledgement. The following rules apply to
transaction type "Q":

1.  An actual disbursement must exist (see example #1).

2.  Disbursement type "Q" is only for date changes, not changes to the
    actual disbursement amount. This is a separate disbursement
    transaction and must be transmitted to the LOC (see example #2).

3.  Disbursement type "Q" adjusted disbursement date can be a date after
    a prior transaction date for that disbursement number (see example
    #3).

4.  Disbursement type "Q" adjusted disbursement date cannot be a date
    later than subsequent disbursement numbers (see example #4).

5.  Disbursement type "Q" can be entered with a date before any
    adjustments to that same disbursement (see example #5).

6.  Multiple transactions may cause a delay in processing.

7.  Disbursement type "Q" follows the same delete rules as any other
    disbursement transaction (cannot be deleted unless in a "R = Ready
    Status" or "E = Rejected Status").

The following are examples that apply to the rules outlined above:

***Example #1***

  --------- -------- ---------- ------------ --------- ---------- -------------- --------------
  **Disb.   **Disb   **Disb.    **Disb.      **Disb.   **Disb.    **Allowed?**   **Comments**
  \#**      Type**   Seq \#**   Date**       Amt**     Status**                  

  1         Q        01         05/01/2001   \$1000    READY      NO             See rule #1
  --------- -------- ---------- ------------ --------- ---------- -------------- --------------

###### 

###### Example #2

  --------- -------- --------- ------------ --------- ---------- -------------- --------------
  **Disb.   **Disb   **Disb.   **Disb.      **Disb.   **Disb.    **Allowed?**   **Comments**
  \#**      Type**   Seq \#**  Date**       Amt**     Status**                  

  1         D        01        05/01/2001   \$1000    ACCEPTED   YES            Initial
                                                                                Disbursement
                                                                                Entered

  1         Q        02        05/02/2001             ACCEPTED   YES            See Rule #2

  2         D        01        06/01/2001   \$1000    ACCEPTED   YES            Second
                                                                                Disbursement
                                                                                Entered
  --------- -------- --------- ------------ --------- ---------- -------------- --------------

###### Example #3

  --------- -------- --------- ------------ --------- ---------- -------------- --------------
  **Disb.   **Disb   **Disb.   **Disb.      **Disb.   **Disb.    **Allowed?**   **Comments**
  \#**      Type**   Seq \#**  Date**       Amt**     Status**                  

  1         D        01        05/01/2001   \$1000    ACCEPTED   YES            Initial
                                                                                Disbursement
                                                                                Entered

  1         Q        02        04/01/2001             READY      YES            See Rule #3

  2         D        01        06/01/2001   \$1000    ACCEPTED   YES            Second
                                                                                Disbursement
                                                                                Entered

  2         Q        01        04/02/2001             READY      YES            See Rule #3
  --------- -------- --------- ------------ --------- ---------- -------------- --------------

> Example #4

  --------- -------- --------- ------------ --------- ---------- -------------- --------------
  **Disb.   **Disb   **Disb.   **Disb.      **Disb.   **Disb.    **Allowed?**   **Comments**
  \#**      Type**   Seq \#**  Date**       Amt**     Status**                  

  1         D        01        05/01/2001   \$1000    ACCEPTED   YES            Initial
                                                                                Disbursement
                                                                                Entered

  2         D        01        06/01/2001   \$1000    READY      YES            Second
                                                                                Disbursement
                                                                                Entered

  1         Q        02        06/02/2001             READY      NO             See Rule #4
  --------- -------- --------- ------------ --------- ---------- -------------- --------------

> Example #5

  --------- -------- --------- ------------ --------- ---------- -------------- --------------
  **Disb.   **Disb   **Disb.   **Disb.      **Disb.   **Disb.    **Allowed?**   **Comments**
  \#**      Type**   Seq \#**  Date**       Amt**     Status**                  

  1         D        01        05/01/2001   \$1000    ACCEPTED   YES            Initial
                                                                                Disbursement
                                                                                Entered

  1         A        02        05/15/2001   \$500     READY      YES            Adjusted
                                                                                amount
                                                                                downward 15
                                                                                days later

  1         Q        03        05/15/2001             READY      YES            See Rule #5.
                                                                                This would
                                                                                change the
                                                                                date of the
                                                                                initial
                                                                                disbursement
                                                                                to 5/15 which
                                                                                is the same
                                                                                date as the
                                                                                adjustment and
                                                                                is allowed

  2         D        01        06/01/2001   \$1000    READY      YES            Second
                                                                                Disbursement
                                                                                Entered
  --------- -------- --------- ------------ --------- ---------- -------------- --------------

#### Flagging A Subsequent Disbursement Number as the First Disbursement

**New for 2001-2002:** Implementation of a change process to flag a
subsequent disbursement number as the first disbursement when
disbursement #1 has already been generated and sent to the LOC.

As is current process, EDExpress generates disbursement #1 first when
adding an actual disbursement record. However, a new field is added to
the actual disbursement grid and an action code to flag a subsequent
actual disbursement (#2 through #20) as the first disbursement. This "C"
flag can be applied to a subsequent disbursement number only if the
disbursement date on the subsequent disbursement has an earlier action
date then the action date on the previous accepted disbursement #1. The
"C" flag, updates the LOC database to indicate that the disbursement
flagged is first disbursement for a loan.

**Note:** The first disbursement must always have the earliest date.
Once disbursement #1 is accepted by the LOC or a flagged disbursement is
accepted by the LOC, any disbursement for that loan with an earlier date
will be rejected. If several disbursements are received by the LOC for
the same batch cycle, disbursement #1 or a disbursement with a "C" flag
whichever has the earliest date is processed first and the rest of the
disbursements are processed in chronological order.

Anticipated disbursements will continue to be in sequential and
chronological order.

### Importing Disbursement Data into EDExpress

You can create a change record to import actual disbursement data from
an external institutional system into EDExpress. To do this, use the
External Change Record format (DIEC02OP) in the Combination Layouts
section. The change record should include the following data elements:

  --------------------------------------------- -------------------------
  **Field**                                     **Change Field Number**

  Loan ID                                       N/A

  Sequence Number                               N/A

  Disbursement Number                           D003

  Transaction Date                              D004

  Action Type (Actual Disbursement)             D006

  Action Amount (Actual Disbursement)           D007

  Actual First Disbursement Change Flag         D008
  --------------------------------------------- -------------------------

#### Disbursement Action Types

The gross, fee, interest rebate, and net amounts are sent to the LOC for
all anticipated and actual disbursements. Disbursement records can be
recorded in EDExpress by entering either actual gross or net amounts and
EDExpress calculates the other amounts.

#### New For 2001-2002: You indicate whether disbursements are entered using the gross amount or net amount in Direct Loan System Setup. Once a disbursement is entered into EDExpress using a disbursement gross amount or a disbursement net amount, all actual disbursement records for that loan must be entered using the same method.

In addition to entering the amount of a disbursement, the disbursement
number and the action date, you must enter the Action Type field. This
field tells EDExpress what the amount represents.

The following chart describes the Action Types available.

  ------------------------------------------------- ---------------------
  **Description**                                   **Action Type**

  Enter **Gross or Net** Amount of the disbursement D

  Enter **Gross or Net** Amount of the adjustment   A

  Use anticipated disbursement amounts in the       U
  anticipated disbursement grid to enter **Gross**  
  **or Net** Amounts to the actual disbursement     
  grid                                              

  **New for 2001-2002!** Enter **Net Adjustment     N
  Amount (positive or negative)** of the adjustment 

  Adjusted Disbursement Date                        Q
  ------------------------------------------------- ---------------------

#### Sequence of Disbursement Records

Disbursement records should occur in the file grouped by Loan ID. The
records must be sorted within Loan ID by Disbursement Number and
Disbursement Sequence Number. For example, a loan has one actual
disbursement and two adjustments. Record type D should precede record
type A, and the two adjustments (record type A) should be in ascending
date order.

To make the import work most efficiently, you should create the file so
that the records are imported in transaction date order. If you have
more than one record for a single transaction date, they should be
sorted in Social Security Number order

Remember: Disbursement activity must be submitted to the LOC **within 30
days** of the transaction date.

#### Timing

#### For Option 1 and 2 schools, disbursement records are sent after you have received a signed valid MPN/PLUS Promissory Note from the borrower or a valid MPN on file at the LOC. For Standard Origination schools, disbursement records are sent to the LOC after you have received an accepted Promissory Note Acknowledgement for the borrower or a valid MPN is on file at the LOC. Take care to ensure that the disbursement record is accepted on a Disbursement Acknowledgement before transmitting change records for adjustments to \$0.

### Export Record of Disbursement Information

Direct Loan software creates a record of disbursement information for
transmission to the LOC. The LOC edits the information against the loan
origination record data stored in its system. The LOC returns an
acknowledgement to the school indicating whether or not each
disbursement record has been accepted (DIOD02OP).

### Submit Correction Disbursement

You may receive a record from the LOC indicating the disbursement
information record is rejected. In this case, you need to determine why
the record was rejected, then correct the record and retransmit it to
the LOC.

### Process Disbursement Adjustments

Adjustments occur when the amount on a disbursement is incorrect and
needs to be increased or decreased. This new adjusted disbursement
amount needs to be sent to the LOC.

**Inactive Loan Process (Adjustments to Zero)**

Individual disbursements and/or Loan Amount Approved can be adjusted to
zero. This process provides you the flexibility to increase the loan by
simply recording and sending the LOC an upward adjustment if the loan or
disbursement is to be reactivated after being adjusted to zero.

**New for 2001-2002:** When you select the inactive flag in EDExpress a
dialog box appears displaying two options. Option 1 marks the loan
inactive and no longer displays the loan on reports. The loan amount
approved and anticipated disbursement are not adjusted by this option.
Option 2 marks the loan inactive, no longer displays the loan on
reports, adjusts the loan amount approved to zero, and adjusts all
anticipated disbursement to zero. The selection of Option 2 also
generates all necessary Change Records to be exported to the LOC.

The following scenarios demonstrate this process:

#### Scenario A

School needs to cancel an entire loan and NO Actual Disbursements have
been made:

1.  Reduce the Loan Amount Approved to \$0 or mark the loan Inactive and
    select the option to reduce the Loan Amount Approved to \$0. Save
    the record.

2.  Save process within EDExpress automatically reduces each Anticipated
    Disbursement to \$0.

3.  Forward a Loan Origination Change Record to the LOC, which contains
    the change to the Loan Amount Approved and all Anticipated
    Disbursements.

4.  Increase the Loan Amount Approved to the appropriate amount, which
    automatically resets the Inactive Flag, if you need to reactivate
    this loan.

> EDExpress automatically recalculates the Anticipated Disbursements.
>
> Forward a Loan Origination Change Record to the LOC, which contains
> the change to the Loan Amount Approved and all Anticipated
> Disbursements.

#### Scenario B

School wants to cancel an entire loan but Actual Disbursements have been
made:

1.  Adjust all Actual Disbursements to \$0 and send in a Disbursement
    Record to the LOC, which contains adjusted disbursement record.

2.  At the same time, reduce the Loan Amount Approved to \$0 or mark the
    loan Inactive and select the option to reduce the Loan Amount
    Approved to \$0. Save the record.

3.  The Save process in EDExpress automatically reduces each Anticipated
    Disbursement.

4.  Forward a Loan Origination Change Record to the LOC, which contains
    the change to the Loan Amount Approved and all Anticipated
    Disbursements.

> Note: This change record (Step 4) can be forwarded to the LOC at the
> same time the Disbursement Record in Step 1 is forward to the LOC.

5.  (As in Step 4 for Scenario A above) Increase the Loan Amount
    Approved to the appropriate amount if you need to reactivate this
    loan.

> ~~EDExpress automatically~~ ***Enter the*** recalculate~~s~~***d***
> ~~the~~ Anticipated Disbursements. A Loan Origination Change record is
> sent to the LOC to report the new amounts.

6.  Adjust the appropriate Disbursement number back up to the
    disbursement amount if an Actual Disbursement is to be recorded. A
    Disbursement Record is sent to the LOC to report the new Actual
    Disbursement amounts.

#### Scenario C

School wants to only cancel individual Actual Disbursement(s):

1.  Adjust the individual Actual Disbursement(s) to \$0.

2.  Send a Disbursement Record to the LOC, which contains this adjusted
    disbursement.

3.  Reactivate this disbursement by entering an upward adjustment to
    that same disbursement, then send a Disbursement Record to the LOC
    with the new amount(s).

**Notes:**

-   If you only adjust the disbursement(s) down to zero without
    adjusting the Loan Amount Approved appropriately, the student's loan
    data at NSLDS may not be reported correctly.

-   If the sum of Actual Disbursements is changed to \$0, a message
    displays suggesting that you may also want to change the Loan Amount
    Approved to \$0.

### Disbursement Confirmation (Schools in the Confirmation Pilot)

Schools participating in the Confirmation Pilot receive authorization
from the borrower for the disbursement of funds under a Direct
Subsidized Loan or a Direct Unsubsidized Loan. To accommodate this
procedure, a Confirmation Flag indicates that the borrower at the school
has confirmed the disbursement.

### Receiving Disbursement Acknowledgement Records from the LOC

The LOC returns an acknowledgement record for each Disbursement Record
you submit. In addition, some disbursement transactions are generated by
the LOC and sent to you on the Disbursement Acknowledgement. The
acknowledgement record is in the same format as the Disbursement Record.
They are returned in a message class DIOD02OP.

When processing disbursements or adjusted disbursements, if the LOC
calculates different amounts than reported by the school, these amounts
are returned in the acknowledgement. If there is no change to the
amounts, these fields are returned blank.

## School Reconciliation

You must reconcile your school's Direct Loan records on file at the LOC
with the school's internal Direct Loan records. This process is School
Reconciliation and you should perform this process on a monthly basis.

### School Account Statement 

The LOC initiates the reconciliation process. You receive on a monthly
basis a Direct Loan School Account Statement (DLSAS) from the LOC
designated by Direct Loan school code. The DLSAS is imported and
formatted to look similar to a bank statement. This statement reports
the cash records and the booked and unbooked disbursement transactions
on file at the LOC. The DLSAS has six sections: Year-to-Date Cash
Summary, Year-to-Date Disbursement Summary by Loan Type, Monthly Cash
Summary, Monthly Disbursement Summary by Loan Type, Cash Detail, and
Loan Detail. The Loan Detail section is optional. You are responsible
for reviewing and comparing the monthly statement to ensure the accuracy
of the data on both your school\'s system and the LOC database. This
data must also be reconciled to your school's internal student account
records and bank records.

### School Options

You may elect to receive only the Year-to-Date or Monthly Cash Summary,
Year-to-Date or Monthly Disbursement Summary by Loan Type, and Cash
Detail sections on the monthly School Account Statement - omitting the
Loan Detail records. This may be a desirable option if you have a large
volume of loan detail records. If you want to omit the Loan Detail
records from your DLSAS, contact the LOC.

### Additionally, you may elect to send the LOC an electronic file, the Optional Loan Detail Exception File, with Year-to-Date (YTD) unbooked transactions or booked transactions for a particular month. The LOC compares your school\'s data sent in this file with that of the LOC. A preformatted exception report is returned if there are discrepancies or exceptions to be resolved. This process may assist you in resolving discrepancies found while reviewing the monthly DLSAS. You initiate this process by sending the Optional Loan Detail Export file to the LOC (DERC02IN).

### Resolving Discrepancies

These two processes, the DLSAS and the Optional Loan Detail Exception
Report, assist you in reconciling your school data with the data at the
LOC. When discrepancies are found, you should go back and ensure that
all origination, promissory note, and disbursement processing is
completed. Remember:

-   The LOC's cash balances only report on \"Booked\" data for the month
    reported in the DLSAS. Booked status on your school system can only
    be updated by the booked disbursement (L) or booked adjustment (M)
    transaction.

-   Export all pending data batches for origination records, promissory
    notes, and disbursements.

-   Import all pending acknowledgement batches to update the accepted
    status and booked status flags on your school\'s system.

-   EDExpress and Combination schools find it helpful to use the Status
    Measurement Report to resolve discrepancies on the DLSAS.

## Technical Tips

On the following pages, some technical tips are provided in the sections
listed below:

-   Batch IDs

-   User-Defined Data Fields

## Batch IDs

All Batch IDs through the Direct Loan System have the same format. Each
batch ID is 23 characters long. The first two characters are the batch
identifiers, which represent the type of batch. One character represents
the cycle year. The next six characters are the school code. The next
eight characters are the date the batch was created. The next six
characters are the time the batch was created. All of the batch
identifiers are listed below.

  -----------------------------------------------------------------------
  **Batch        **Type of Batch**
  Identifier**   
  -------------- --------------------------------------------------------
  #F             External Export: External Export

  PF             Export to LOC: Full Loan PLUS Origination

  #L             Export to LOC: Optional Loan Detail Exception File

  #E             Export to LOC: Loan Origination Change

  #H             Export to LOC: Disbursement

  #D             Export to LOC: Full Loan Sub/Unsub. Origination

  #R             Import from LOC: Anticipated Disbursement Listing

  #Q             Import from LOC: Actual Disbursement Roster

  #O             External Import: External Import Loan Origination Add

  #P             External Import: External Import Change Record

  #E             Import from LOC: Loan Origination Change Acknowledgement

  #H             Import from LOC: Disbursement Acknowledgement

  #B             Import from LOC: Booking Notification

  SP             Import from LOC: Servicer Refund

  #A             Import from LOC: Prom Note Acknowledgement

  #C             Import from LOC: PLUS Credit Decision Update
                 Acknowledgement

  PF             Import from LOC: Full Loan PLUS Origination
                 Acknowledgement

  #D             Import from LOC: Full Loan Sub/Unsub. Origination
                 Acknowledgement

  #W             Import from LOC: 30-Day Warning Report

  AS             Import from LOC: Direct Loan School Account Statement

  RB             Import from LOC: Rebuild Data File
  -----------------------------------------------------------------------

## User-Defined Data Fields

If you create a File Format that contains fields from all record types
(A=Demographic, B=User Dat~~e~~***a***, D=Loan, N=Anticipated
Disbursement, and M=Actual Disbursement), the software does not export
records of types A or B unless one record of type D, M or N matches the
Export Status (Y or N) selected on the Export dialog.

In order to ensure that Demographic and User-Defined Data records are
exported, we recommend you create a File Format that contains only Demo
and/or User-Defined Data fields (record types A and B) and export using
this new File Format and an export status of B.

This method requires two External Exports but ensures that all
Demographic and User-Defined Data records that changed are exported.