# Presentation: 762284

## Session DL-07

**Getting Connected in the Direct Loan Program**

## How to Get Started in DL

**How to Get Started in DL**

- School Eligibility and Certification
- School must be eligible and certified for Title IV and the Direct Loan Program
- Review ECAR for approved programs
- If DL is listed, proceed to operational participation request
- If DL is not listed, must apply via E-App at www.eligcert.ed.gov

**Notes:**
The Eligibility and Certification Approval Report (ECAR) is the document that lists all of the Title IV Programs that a school is eligible to participate in.
If the Direct Loan Program is not listed on the ECAR, the school must apply via the E-APP.  The E-APP for Schools’ web site is www.eligcert.ed.gov

## How to Get Started in DL

- Each G-code or E-code school must have a unique DUNS number
- Numbers issued by non-government entity, Dunn & Bradstreet (D&B)
- 866-705-5711 or _[www.fedgov.dnb.com/webform](http://www.fedgov.dnb.com/webform)_
- School Participation Team approves addition of new DUNS numbers via _www.eligcert.ed.gov_
- Data between D&B must be absolutely accurate and correct and match

## How to Get Started in DL

- Options for Additional Locations
- Main campus only: G-code
- Main campus and additional locations: G-code and E-code(s)
- Main campus FOR additional locations: G-code
- Relationships in COD
- Reporting/attended

## How to Get Started in DL

**How to Get Started in DL**

- Operational Participation Request/Setup
- School sends e-mail to _[CODSupport](mailto:CODSupport@acs-inc.com)__[@](mailto:CODSupport@acs-inc.com)__[acs](mailto:CODSupport@acs-inc.com)__[-inc.com](mailto:CODSupport@acs-inc.com)_
- Subject heading: “Request to participate in the Direct Loan Program”
- Body text should include:
- School name and address
- School official/requestor’s name, phone number, and e-mail address (person must be listed on the PPA)
- DUNS Number (if known)
- Award Year in which processing will begin

**School Setup**

## How to Get Started in DL

- Operational Participation Request/Setup, continued
- Direct Loan Division sends welcome letter
- Point of Contact calls the school
- Enrollment questions can be sent to DLEnrollment_FSA@ed.gov

## How to Get Started in DL

- Other System or Web Site Connections
- SAIG
- NSLDS
- G5
- COD Web site
- eMPN Web site
- Sign-up for DL Listserv and make sure e-mail addresses are current with COD School Relations Center

## COD School Relations Center

- COD Customer Service Representatives
- Primary connection for assistance with problem-solving and processing issues
- School has a Primary CSR assigned
- School has a Reconciliation Specialist to assist with reconciliation and closeout process for all programs

## Direct Loan “Flow”

- Processing is the same as for Grants
- Common Record submission and responses
- Same funding methods and use of G5
- School controls origination, credit checks, MPN process, disbursement, and reconciliation
- Processing options allow aspects of the program fit with the school’s needs

## PLUS Loans (and credit checks)

- School determines application process for parents (Grad PLUS uses FAFSA)
- Origination initiates credit check or can be done on COD Web site (by the school)
- Must have signed authorization (signed PLUS MPN meets this requirement)
- Denials can be overridden with a credit worthy Endorser or successful appeal through COD Applicant Services

**Notes:**
Within a few hours of receiving a Direct PLUS Loan MPN/application, COD notifies the school of the applicant’s credit evaluation. This is done through decision codes on the Direct PLUS Loan origination record. COD also notifies the applicant of the results of the credit check. The school then continues processing loans for applicants who meet the credit criteria and stops processing loans for applicants who do not meet the criteria.

When an applicant doesn’t pass the credit check, COD sends a letter notifying the applicant that he or she is not eligible for a Direct PLUS Loan because of adverse credit history. The letter tells the applicant which national credit bureau reported the adverse information, explains why the applicant was rejected, and offers the applicant several options:

The applicant can opt to take no further application actions (in other words, stop the Direct PLUS Loan application process).
If the applicant believes the credit bureau provided inaccurate credit information, he or she can contact the reporting credit bureau to resolve the issue. 
If the applicant believes the adverse credit history is correct but that there are extenuating circumstances, he or she may appeal to COD and document the extenuating circumstance(s).
Or the applicant can obtain an endorser who does not have an adverse credit history and submit a revised Direct PLUS Loan application/promissory note. The endorser (who cannot be the dependent student for whom a applicant is trying to borrow) must agree to repay the loan if the applicant doesn’t. (An endorser form is included in the rejection letter.)

The preliminary credit check is an “instant” credit check whose results are considered as final as the result obtained through MPN/application process. As well, when an eMPN is completed it too authorizes the instant credit check as would a signed authorization or faxed authorization. There is also a means to authenticate a request via the internet website, a school may have with a “shared secret” process, but this is a rarity.

## MPN Processing	

- School determines and manages the MPN process as it best fits their needs
- Electronic vs. paper
- COD Print vs. School Print

**Notes:**
School will determine how much it will be involved with the MPN process.  Can be very hands-on where school prints and provides to borrower and then gets them back to mail to COD

OR can be relatively hands-off by using eMPN and only confirming that the MPN is in place before disbursing.

Decision points: electronic vs. paper
COD print vs. school print
Multi-year vs. single-year

## Funding and Disbursements	

- In general, school controls cash flow (subject to cash management rules)
- School can opt for Pushed Cash
- Funding is driven by actual disbursements
- G5 is used to
- request drawdowns ($ used to pay students)
- adjust drawdowns
- return cash

**Notes:**
The same Title IV Cash management rules that apply to other Title IV programs apply to Direct Loans. 

Schools use G5 (formerly GAPS) just as they use G5 for Pell, ACG/SMART and Campus Based drawdowns and returns of cash.  Immediate need (3 business days) provision applies to DL funds.

The COD site also provides schools with funding information, including current funding level, available balance and amount of cash received that has been substantiated. Schools generally use COD to view their current funding information. It is fed by G5, but much, much more financial data is available in COD than they can glean from G5.

There are relatively more Pushed Cash schools in DL than in Pell.  They cannot use G5 to request cash as the money is automatically transmitted to their bank accounts via ACH of FEDWIRE. 

## Loan Adjustments

- Loan adjustments are made by school
- Option to create new loan OR adjust current loan
- Changes made via Common Record or COD Web site
- If adjusting current loan, school sends new amount(s)
- Increased loan amounts usually mean new disbursements

**Notes:**
For any web-based processing, school needs to make sure web activity is a good thing with their software application

## Direct Loan Servicing	

- Schools can access DL Servicing Online through COD Web site
- Set report options:
- Entrance and Exit Counseling Reports
- Delinquency and Portfolio Reports
- Default Management Tools
- Late-Stage Delinquency Assistance (LSDA)