# Presentation: 591493

## Session DL-1

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

**Notes:**
Welcome and Introductions
General Housekeeping announcements
Reminder about evaluations

Poll audience: 
new folks at a DL school?
New DL school?
Just interested in the DL program?
What are some of your expectations?

## Agenda	

**Agenda****	**

- Roles and Responsibilities
- Direct Loan Basics
- Processing
- What’s New for 2009-2010
- Tools and Resources

**Notes:**
Here is the overall agenda that we will cover today.  The first half will focus on an overview of the program and processing topics.  The second half will focus on what’s recently happened or will happen in the near future.

## Roles and Responsibilities

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

**Notes:**
Three key groups are involved in the DL Program, and we will take a “bird’s eye view” of each group’s role:
	Students
	Schools
	Federal Student Aid
Students are ultimately the main benefactor.  They must take specific steps at your school to apply for aid, but there are also some broader guidelines as listed here.

## 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

**Notes:**
Schools take on the next level of responsibility, again list here in broad categories.  Many of you are familiar with these steps or at least part of them.

## 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

**Notes:**
The third and final group is Federal Student Aid.  We administer and manage the DL Program, as we do with all of the Title IV programs.  As such, we work with schools in a number of different ways.
	determining school eligibility
	providing funding...the money to disburse to students
	manage the reconciliation/closeout process
	maintaining the systems that process DL information
	assisting schools with written guidance, publications and customer service support

## Roles and Responsibilities

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

**Notes:**
A unique aspect of the DL Program is that we serve as the lender, so in turn, we also handle all aspects of the program:
	maintaining student accounts
	processing payments, deferments/forbearances
	conducting default management programs

## Agenda	

**Agenda****	**

- Roles and Responsibilities
- Direct Loan Basics
- Processing
- What’s New for 2009-2010
- Tools and Resources

**Notes:**
So, with that “who does what” context in mind, we can now talk about general program information.

## Subsidized and Unsubsidized Loans

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

**Notes:**
Eligibility:  Student must
complete FAFSA or Renewal FAFSA
have a high school diploma or GED
be a US citizen or eligible non-citizen
have a valid Social Security Number
be registered with Selective Service, if required
not be in default on a Title IV loan or owe an overpayment on a Title IV grant
MPN:  Student must sign a MPN, promising to pay back the loan
Fees/Rebate: There is a fee charged for the loan.  For loans first disbursed on/after July 1, 2008 through June 20, 2009,  the fee is 2.0%.  On or after July 1, 2009 through June 30, 2010, the fee is 1.5% and on/after July 1, 2010, the fee is 1.0%.  Direct Loan also offers an up-front rebate of 1.5%.  Borrowers keep this rebate if they make their first 12 payments on time; otherwise it will be added back in to their loan balance.  The rebate will reduce with the fee over the next couple years.
Loan Limits: Sub/Unsub loans are subject to limits which we will review later in the presentation.
Interest: Currently loans that are FIRST DISBURSED on/after July 1, 2006 have a fixed interest rate of 6.8%.  Recent legislation reduced the fixed rate for loans FIRST DISBURSED on/after July 1, 2008 through June 30, 2009 for SUBSIDIZED UNDERGRADUATES to 6.0%.  Loans prior to July 1, 2006 have a variable rate, adjusted each year on July 1; the variable rate is capped at 8.25%. 
IT’S IMPORTANT TO SAY “FIRST DISBURSED” ON/AFTER JULY 1, 2006 because in some cases, loan disbursements may cross over the July 1 date.  In those cases, the rate for the entire loan is based on the date of the first disbursement.

## PLUS Loans

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

**Notes:**
Eligibility:  For parents to help pay the cost of a dependent student’s education.  Graduate/professional students are also eligible.

Credit Check: Must pass a credit check.  If denied, borrower may obtain an endorser who agrees to repay the loan if the borrower does not repay it.  In some cases, borrower with adverse credit may also obtain a PLUS loan by documenting to our satisfaction that extenuating circumstances exist.

Fees/Rebate: There is a fee charged for the loan.  In the case of PLUS, the fee is 4%. PLUS loans also get the up-front rebate of 1.5%.  Borrowers keep this rebate if they make their first 12 payments on time; otherwise it will be added back in to their loan balance. Unlike sub/unsub loans, there have been no moves to reduce this fee. 
Loan Limits: PLUS loans do not have limits, other than amount cannot be more than COA – other aid.
Interest:  Charged during all periods, starting from the time of disbursement. Loans FIRST disbursed on or after July 1, 2006 have a fixed rate of 7.9%.  Interest rates are variable for loans first disbursed prior to July 1, 2006.
MPN: Like Sub/Unsub MPN, the PLUS MPN serves as the agreement to repay the loan. 
Both parents and graduate/professional students use the same MPN. For parent PLUS, only signed by one parent and applies to only one child/student.  And of course, the grad/prof students are borrowing for themselves.

From our perspective, this isn’t a new loan type, rather it was a new borrower type.  In general, most factors are the same (Credit check/ can get endorser, MPN, loan terms, etc.)
But there are some differences:
Grad/Prof must apply via FAFSA
Must be graduate level studies
School must determine eligibility for Sub/Unsub loans, BUT student does not have to take them to get the PLUS

## Consolidation

- Eligibility requirements vary
- Application and MPN completed through Direct Loan Consolidation Center
- _[www.loanconsolidation.ed.gov](http://www.loanconsolidation.ed.gov/)__ _

**Notes:**
For the purposes of this session, we will only discuss consolidation briefly.
Consolidation allows borrowers to combine their loan into one loan under single terms and single payment.

Requirements and eligibility vary with each student’s situation, so it is not possible to discuss for this beginner session.

## Agenda	

**Agenda****	**

- Roles and Responsibilities
- Direct Loan Basics
- Processing
- What’s New for 2009-2010
- Tools and Resources

**Notes:**
This completes our discussion the overview of the program and we will now turn to processing in the Direct Loan Program.

## Promissory Note

- Disburse
- (including funding)

- Reconcile

- Originate

**Notes:**
In DL Processing there are four general steps
	MPNs (either get a new one or make sure one is open to link award to), 
	Origination (this is equivalent to “certifying” for FFEL)
	Disbursement (and funding...how schools get their money)
	Reconciliation
The first two steps are interchangeable and school choice, but all 4 steps must be performed each award year for each borrower for each loan.
Again, we will not go into extreme detail in each of these areas.  For example, we will not be focusing on how to create/originate award in a type of software or how to create awards online.  Instead, we are trying to give a high-level picture of the process as it applies to all DL schools.

## Master Promissory Note (MPN)

- Legal agreement
- Multi-year, multi-loan notes
- Exceptions
- Plain Language Disclosures
- Disclosure Statements

**Notes:**
An MPN is a legally binding agreement to repay the loan to the Department that must be signed before student can receive funds.  Can be signed on paper or electronically.  This includes the Borrower’s Rights and Responsibilities Statement (BRR).
In most cases, the MPN serves as note for all subsidized/ unsubsidized loans for up to 10 years, as long as the student continues to attend a DL school that uses the MPN as a multi-year note.  Exceptions (circumstances may require a student to sign a new MPN) include:
Student transfers to a school that only offers single-year use of the MPN or the current school chooses to use use the single-year use of MPN.
Student transfers to a non-DL school
Student transfers from a FFEL school
Student chooses to sign a new MPN for each loan
While the intent of the MPN allows one MPN to cover all loans, there is no requirement to do so.  PLUS EXCEPTION: Endorser = single loan note
PLD is provided to the borrower when he/she receives a subsequent loan under a previously signed MPN. Because the borrower doesn’t sign another MPN, they get the PLD as a reminder of their responsibilities.  
DISCLOSURE STATEMENT: The MPN does not give specific loan information, like loan or disbursement dates, so disclosures are sent prior to disbursement.  The disclosure explains the borrower’s right to cancel all or part of their loan.

## 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

**Notes:**
Schools have options when it comes to processing.  First school can be MY or SY.  Option open to all schools.
MY=school uses current MPN to link multiple loans for multiple years.  Confirmation process is very critical here.  Active or passive choice must be implemented.
SY=school requires borrower to sign new MPN for each year (NOT each loan)
We recommend MY processing

Another option is Electronic or Paper; we advocate eMPN to the extent possible and we will talk about this in detail next.

If using paper, another option is who handles the MPNs.
If printing own MPNs, you can order paper stock from FSAPubs. 
Should determine who doesn’t already have an MPN on file before printing 
– may use the COD Web site or NSLDS to determine whether one already is on file OR the origination record response will indicate MPN status
Must also collect and send to Montgomery with MPN Manifest
Refer to MPN acceptance bulletin
Sample Manifest – Tech ref
Track who has and hasn’t returned an MPN – most software has that capability
Many schools include MPN with award letter
 If COD System prints, schools have additional options:
COD System can always print when an origination record is sent in
COD System can print on an individual record basis
If sent via origination record, have option to send to borrower or to school.

## eMPN Web site-- www.dlenote.ed.gov

**Notes:**
We’ve covered some options, now some aspects in a little more detail.   This is the eMPN web home page.  Why do we advocate eMPN?
24/7 availability
Won’t get lost 
Less paper and saves postage-Go Green!
Less prone to error (edits built in)
Faster linking with award information 
Promissory note completion is convenient and confidential
Easily retrieved for viewing or printing by both the school and borrower
Reminder-  paper must be made available to those who request it

To sign-in, click on the link at lower left.  This section allows you to:
Set up school options
Search and view electronic MPNs
Add text to the message to will send to a student e-mail address after electronic MPN is submitted. For example, a school may want to tell their students what will happen after the school receives confirmation of a completed MPN.

## eMPN Web site--School options

**Notes:**
Setting up your school options on the eMPN web site is really EASY!
All schools are automatically set for Y to participate in eMPN.  This should only change if your school doesn’t want any student to do an eMPN.

Choose Y or N for LOR (Loan Origination Record) Required. 
Y= School wants to originate the loan BEFORE the borrower can complete eMPN.  
N=Borrower complete eMPN at ANY time.
Things to consider, if N: get an MPN response to know MPN is on file, but it won’t be linked to origination record yet.
Borrower doesn’t have to wait for you; can do eMPN any time.
Things to consider, if Y: you control eMPN process more, but borrowers lose convenience. 
Get complete MPN response information with origination record response.
In the case of parents, if origination in place, the credit check is initiated, so only borrowers with accepted credit can be notified to complete eMPN (though separate credit authorization must be obtained).
The final option is adding a message.  School can create a specific message that will be sent to the borrower, if the borrower provides their e-mail address during the eMPN process.  The message will be sent once the eMPN is completed.

## eMPN Web site--Search

**Notes:**
Your school has a couple options when searching for a completed MPN
	by SSN and DOB (useful when looking for a specific borrower) 	by date range (useful when looking for all borrowers with completed MPNs and associated with your school)

The search function can be useful in checking on missing MPNs or finding out why a loan won’t link.  As an example, you would do a SSN and DOB search and then choose view to see if the borrower used a different name, DOB or SSN when compared to what you may have used on the origination record.

## Slide 18

**Notes:**
Here are the results of a date range search. If you would like to view a PDF version of the eMPN then select the view button under the View PNOTE column

## Promissory Note

- Disburse
- (including funding)

- Reconcile

- Originate

**Notes:**
We’ll next move onto the origination piece.  As mentioned earlier, origination and MPN steps can happen in a different order, but each must be in place.

## 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

**Notes:**
At a high-level and like most of the other Title IV programs, Direct Loan awards are processed through the COD System.  So for those of you familiar with the Pell, ACG, and National SMART processing, you should start to see some similar process.
And as mentioned earlier with the roles and responsibilities, schools do a lot of up-front work and work with a lot of student data to determine eligibility and the aid package.

Once eligibility  and aid package determined, the school creates/originates the DL award in their system (or on the COD Web site) and then sends it to the COD System.

COD will process and edit accordingly and send back a response to the school.

## 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

**Notes:**
Again, like the other programs, Direct Loan awards are made up of the 
Person information
Award information
Disbursement information

Difference in award ID
Direct Loan award Ids identify the TYPE of loan (S, U, or P)
Direct Loan awards use the G or E code of the school rather than OPE ID.

## Processing with the COD System

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

**Notes:**
Person Data
Identifying information provides SSN, DOB, name, and then adds in demographics
Eligibility information includes things like: citizenship

Make sure to note that award start and end dates 
Academic Year Tags: equate to Award year start and end dates
Financial Award Tags: separate set of tags that equate to the loan period start and end dates

Award information also provides things like Additional Unsubsidized flag, Pre-professional coursework indicator (PPCI) or Health Professions Participant (HPPA) flags.

Disbursement data will be covered in the disburse section.  Note however that, at a minimum,  anticipated disbursement information must be submitted with the award for it to accept.

## 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

**Notes:**
Once the COD System processes the records, it will send back a response (or sometimes called an acknowledgement).  Hopefully most records process through and you get back accepted records.

Of course, sometimes things aren’t perfect.  So we will also return rejected records with error codes that will help determine what is wrong.

For PLUS Loans, the response will provide the results of the credit check.
NOTE TO PRESENTER: IF not discussed earlier, take time to explain that the credit check process is a little different in DL in that schools participate in the management of the process and it is not all on the lender or parent.

For all loans, we will also include the status and expiration date of MPN, if one is on file.

## 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

**Notes:**
The eMPN web site is not the only web site that can assist you with Direct Loan processing. 

COD Web site can be used a number of ways.  
It can help you identify if a promissory note either paper or electronic has been completed and whether that promissory note is linked or unlinked with loan origination records. 
You can perform on line ‘instant’ credit checks (with the borrower’s written consent) or you can search to see the results of credit checks.
And last but not least you can view origination and disbursement data or create new awards and/or disbursements or edit existing ones.

The next section is going to go through some COD Web screens at high-level.  We encourage you to also try the COD Web hands-on session for a more in-depth look and of course, hands-on approach to try some of these functions. 

So, on to the MPN search.

## COD-Promissory Note Search

**Notes:**
This is a two click screen!!!!
SCREEN 1:  There are three types of searches that you can do. 
SSN or MPN ID you will be able to search for MPNs whether they are linked or unlinked because it returns that specific identifier. 
Last and first name will return search results only for linked notes (because we don’t link using last name)
DOB and first two letters of first name will display only unlinked notes. HINT enter the SSN for best results

SCREEN 2 shows results of a MPN ID search. Results pages may vary depending on what data is in the COD System.  But you will usually get a list of MPNs on file. Once you select the MPN you are looking for, you can then see detailed information about the MPN, including its status (accepted/pending, inactive, expired) and its expiration date.  It will also show linked awards if there are any.
I have one MPN on file and it has 4 awards. 
The M in the middle of the MPN id = Sub/Unsub 
The N indicates = PLUS note, either parent PLUS or a graduate PLUS

By the way, some of the screens have been slightly altered or have blocks of data covered in order to use real screens but also protecting privacy data.

## Credit Check Decision

**Credit Check Decision**

**Notes:**
Another search function is that of the credit check.  The COD web site stores whether your PLUS borrower’s credit has been accepted or declined. As a school you can see the decision and the decision date. 

IF NOT COVERED EARLIER: Your institution needs to have a written policy in place on how you will handle declined credit checks– will you allow borrowers the time to appeal, obtain an endorser, or will you proceed with an unsubsidized loan for your borrower. 

Ok we have seen how the COD web site can assist us with the MPN process in the DL cycle. Now let’s move on to look at specific direct loan origination data. 

## Direct Loan Information

- Person

**Direct Loan Information**

**Notes:**
One final piece about the COD Web site in relation to the Origination process is finding DL information for a borrower.

You can do this by completing a person search using the SSN or Name.

## 30

**Notes:**
Before we go further, I want to point out a few things about navigation. 
As with many web pages, you can get to the same place a couple different ways.  Whatever way is chosen, we use a concept called “bread crumbing” which will help you return to previous screens—these are the words in brown font at the top of the page to the right of “Return to:”  DO NOT USE THE BACK BUTTON IN COD AS IT WILL MESS YOU UP!
Once you enter or select a person from the search results, you will get their Person Detail page, which lists all that borrowers awards and amounts, by award year.  Then you can use the hyperlinks to drill further for the information you are looking for.

So if we click on one of the awards...

## Slide 29

**Notes:**
You will come to the Award Detail information page and see the award details.  It is also in these “lower level” pages that you would have the option to update or change information if you are assigned that user level and/or need to accomplish that task.

## Promissory Note

- Disburse
- (including funding)

- Reconcile

- Originate

**Notes:**
We have covered two of the four “process” parts, by getting the MPN completed and originating the Direct Loan award.  Now we are ready to disburse.

## Processing with the COD System

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

**Notes:**
Because some disbursement information is required with the origination record to have the award accept, part of the work involved with disbursement data is already done.  However, usually, at the time of origination, schools only have a “best guess” of the when money will actually be disbursed.

In the COD System, we use the Disbursement Release Indicator to indicate whether a disbursement is Anticipated (DRI=False) or Actual (DRI=True).  Anticipated disbursements can be submitted any time; actual disbursements are allowed 7 days in advance.

Disbursement date is EXTREMELY CRITICAL as it determines when interest is charged to the borrower, so this date MUST BE ACCURATE.  This is especially important with adjustments.  For example, a mistake was made and a borrower should have received $1000 instead of $800, but the $200 difference wasn’t made for another week, that $200 cannot be submitted as an upward adjustment because the money wasn’t given on the same day as the original disbursement.   It should be submitted as a new disbursement.

## Slide 32

**Notes:**
If using the web site and you continued to drill down from the award pages, you can reach the disbursement detail information.
You will notice that this disbursement is disbursed, but is at $0.  You will also see that the sequence number is 2.  So the latest action is an adjustment to $0.  To see what actions have happened on this disbursement you would click the the history menu selection on the left hand side to see other sequence actions for this disbursement number. 

## Slide 33

**Notes:**
Once on the Disbursement History Information screen you can see all the transactions related to that disbursement.

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

- When – Weekly
- Where – SAIG or COD Web
- Why – Identify disbursements to be used in funding calculations

**Pending Disbursement Listing**

**Notes:**
So MPN, origination and anticipated disbursement information is in.  You are ready to request money from FSA to make those disbursements...how much do you need?

The Pending Disbursement List can help determine the correct amount.  This report can be pulled to show all the disbursements that have the Disbursement Release Indicator of FALSE, but are within the next 7 days.  CHECK THIS!

The total at the bottom can be a great estimate of your immediate funding needs, so how do you get your money?

## 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

**Notes:**
Schools receive funds in two ways: Advanced Pay or Pushed Cash  
In either case, the G5 system is used to process the funding for schools.  Also, most schools are setup as Advanced Pay, though there are exceptions to this.  Schools can request a change to their funding method, but Department must approve any changes.
Advanced Pay: 
School initiates drawdown directly through G5
Must determine how much will need within next three days
Amount is based on need, but could be limited by available balance (which is viewable via COD Web site)  The “limits” are reasonability checks to ensure proper use of funds.
Pushed Cash:
Department pushes money based upon accepted actual disbursement records
May send disbursement records up to 7 days before disbursement date
Disbursements won’t be accepted without an MPN
Nets positive and negative disbursements when calculating payment.
Reduces the need to return money to the Department.
Automatically will receive Funded Disbursement List 
Which disbursements were funded
How payment amount was calculated
View Only Access to G5 - Recommended if school doesn’t initiate own draws.
Anyone needing G5 access should refer to the G5 Web site for details.

## Funded Disbursement Listing

- When – Daily, as needed
- Where – SAIG or COD Web
- Why – Identify disbursements used in funding calculation

**Funded Disbursement Listing**

**Notes:**
As noted earlier, Pushed Cash schools receive a Funded Disbursement Listing (FDL) when money is sent to them.  This report will show what disbursements are “funded” with the received drawdown.

NOTE TO PRESENTER: TOTAL NET DAILY AMOUNT MAY BE INCORRECT.  Because there is an adjustment, I think the next payment should be $2893 (4,187 – 1,294).

## Promissory Note

- Disburse
- (including funding)

- Reconcile

- Originate

**Notes:**
Ok, the key steps to get the loan processed and funded have taken place.  The final process is accounting for all the transactions and confirming the money in equals the money out.

## 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

**Notes:**
Often the reconciliation and closeout steps are seen as a difficult process and a burden.  This really isn’t the case; the key is taking the time to do it each month and making sure the appropriate offices are talking to each other.

Recon=monthly process of “balancing the checkbook”.  Errors should be corrected, but timing differences are ok.

Closeout=the final reconciliation.  At this point, all processing needs to be completed, all loans booked and Ending Cash Balance is $0.

## School Cash Activity

**Notes:**
The Cash Activity screen is a useful reconciliation tool to track your cash. The scroll bars at the far right side and bottom allow you to see all of your draw downs and whether or not the funds have been completely substantiated (accounted for) OR you can choose printer friendly right above that box and all of your cash drawdowns will be displayed vertically and you can print a similar report from GAPs and compare them side by side if you need to resolve cash discrepancies.

Use this to check if drawdowns have been made by your business office
This is updated as of the previous night processing, so schools need to consider timing differences and use a combination of this screen and funding info screen for a full picture.

Additional information if time permits to share – You can track your 30 day reporting requirement – notice the line item that shows “days left of on-time reporting” reflects 22.  In this case, the funds have been substantiated (in the accepted and posted disbursements applied box, it equals the drawdown amount), but if it wasn’t fully substantiated, you could see what was left to do and the time left to do it.)
Also may want to mention FIFO – first in first out accounting principle.   Disbursements substantiate the latest drawdown, so if $300,000 in disbursements come in, but last week’s drawdown wasn’t completely substantiated yet, whatever part of the $300,000 needed to do so will be applied to that draw first.

## COD Report Selection Screen

**COD Report Selection Screen**

**Notes:**
There are a number of reports available to schools to aid in your processing and aid in the reconciliation process.  And many of those reports have options that can be set based on your school’s needs.  We encourage you to learn more about the DL reports in the REPORTS SESSION.

This is the Report selection screen.   Your report options are year specific.  NOTE: When a new year begins, you must reset your options. 
For most reports, you have Preformatted, comma or pipe delimited (which can be imported into excel) formats.  A few reports allow the option of NOT receiving the report by selecting “do not distribute”.

Note that the School Account Statement (SAS) has additional options, which you can change by selecting “modify SAS options” hyperlink.

## SAS Options Screen

**SAS Options Screen**

**Notes:**
SAS is run once at the end of the month. If you change options they wlll apply to the next regularly scheduled run.

Report Format (Fixed Length*, Comma-Delimited, Comma-Delimited With Headers, Pipe-Delimited) – This determines which format will be used to generate the report for your school.  NOTE: If you plan to use DL Tools to format your report and/or run a comparison to school records, you must select Fixed Length.
Include Names of Borrowers (Yes/No*)–.  This option is available for all formats EXCEPT Fixed Length, Disbursement Detail (Monthly or YTD).
Report Activity Type (Monthly*, Year-to-Date, Both) – This option will determine whether your school receives Monthly, YTD, or both Monthly and YTD Cash Detail in your SAS Report(s).  It will also determine the level of detail you can choose to receive in the Disbursement and Loan Level Detail sections of the report (these options are set separately, since disbursement/loan detail is optional for schools to receive).  NOTE:  1) If you choose both, your school will receive at least two separate SAS reports each month – one with Monthly detail, and one with YTD detail.  2) If you wish to use the DL Tools software to compare the SAS to your internal school records each month, you must receive YTD detail on the SAS report.
Summary by Loan Type (Yes*/No) – This refers to the Disbursement Summary by Loan Type section of the SAS report.  Many schools find this information useful in determining loan volumes disbursed by each loan type (Sub, Unsub, PLUS, or Totals).
Disbursement Detail (Yes*/No for Monthly and/or YTD, based on the Report Activity Type chosen above.) - This section of the SAS provides transaction-level detail of all disbursements and adjustments accepted or booked during the reported period.  
Loan Level (optional) – (Yes*/No for YTD only.  If you choose Report Activity Type Monthly, you will not be able to receive Loan Level Detail and this field will display “N/A.”)  This section of the SAS provides total disbursed amounts for each loan that was accepted and/or booked on COD for the program year-to-date.  This section of the SAS is not available for a monthly period.

## SAS Report Example

**SAS Report Example**

**Notes:**
We are highlighting the SAS because it is such a critical report for reconciling and the Direct Loan process.  The SAS is the Department’s official record of your schools Direct loan processing.  If it does not reflect accurately with your school records then you need to find the problem and make adjustments accordingly.  

This is an example of the SAS Summary.  It can be printed out in both YTD and Monthly summary version – as long as the school is requesting both a monthly and YTD SAS.  This summary gives your overall picture and Ending cash balance.  It also may help you pinpoint whether you are out of sync with COD in the cash area or disbursement area and then you can concentrate on the detail.

Again, THE KEY is to reconcile on a monthly basis be able to account for all of your cash and disbursements and your SAS can assist you to do that.

## 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

**Notes:**
Can be use by any school.  Many think this is limited to EDExpress schools; this is not completely true.  All schools can use the compare program and cash management tools.  

One of the best tools is the compare program.  DL Tools can pull in your SAS report (must opt for fixed-length, YTD detail) and then you add in your internal records and DL Tools will compare the two and provide you differences.  It is a great way to find missing disbursements that may not have been sent to COD.

The rebuild function does have some limitations with other software, but it can work.  For example, Main Frame Schools can Rebuild an EDExpress database and the export the data to mainframe system.

Get a chance to try it out at one of the DL Tools Hands-on Sessions happening here at the conference or by visiting the PC Lab.

## Slide 44

**Notes:**
Once a schools has completed processing, you must complete the balance confirmation process.
This process is your way of confirming your net drawdowns and disbursements for Direct Loans for a particular award year and confirming close out for the year...you are basically certifying that your school’s internal cash balance is $0 for the year and your are done processing.
Once you confirmed closeout, you will no longer receive direct loan reports (including the School account statement) for that year and you will no longer be able to submit disbursement records for the award year.
If, as the result of an audit or some internal school review, you notice you need to “open” the year back up so you can report disbursements to COD, you can contact customer service who will work with Direct Loan Operations to reopen the year briefly while you submit those disbursements.

## COD Reports

**Notes:**
Many of your Direct Loan reports are available on the web as well as sent to you through the SAIG mailbox.  To get to them in COD, you select the Services option from the main menu bar.

Clicking the hyperlink in the middle of the screen will take you to your Reports Newsbox.  

Note: This is also the page where COD users can sign directly into the Direct Loan Servicing Web site to do research or review entrance or exit counseling reports.  To do so, you would select the direct loan servicing link on the left.

## Direct Loan Newsbox

**Direct Loan Newsbox**

**Notes:**
This takes us to the school’s newsbox. On the left hand side of the screen you can click on either PL for PELL or DL for Direct loan to access the newsbox for that program containing your school’s reports.
(the numbers before PL and DL are the school’s cod id) We have selected the DL newsbox.

Notice all of the reports by award year available to view or download. If you click on the name of the report you will be taken to the current version of that report. If you click on the word actions right below the report title you are taken to a screen that allows you to choose between current and previous versions as well as the way you want the report to appear (comma delimited, pdf, etc.)

NOTE: if you are having trouble getting to this screen you may have pop up blockers turned on. Turn them off  and you will be able to access reports. If you still cannot access please call customer service for assistance

## Agenda	

**Agenda****	**

- Roles and Responsibilities
- Direct Loan Basics
- Processing
- Recent Changes and Reminders
- What’s New for 2009-2010
- Tools and Resources

**Notes:**
So that covers some changes currently, now we will move to upcoming changes you will see in March 2009.
BEFORE MOVING TO NEXT TOPIC, SUGGEST WE BRIEFLY MENTION THE DL UNSUBSIDZED AWARD CHANGE.
As part of the HEOA, a new provision allows for an additional unsubsidized award amount to be awarded to dependent students whose parents refuse to sign the FAFSA or provide ANY financial support.  We can’t say much more about this as the policy folks work out all the details.  However, look for both policy guidance and operational guidance next week.

## What’s New for 2009-2010

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

**Notes:**
We have always taken borrower privacy very seriously, but the trend across the financial industry is moved to the next level.  We will begin masking a borrower’s SSN in all DL correspondence.  However, some documents (like the MPN) will still use the full SSN.

NOTE TO SPEAKER: if asked, changing the MPN ID or Award ID is a huge deal and would be part of other initiatives to move away from identifying borrowers by SSNs.  But at this time, SSN will remain in MPNs and awards.

## What’s 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%

**Notes:**
As we mentioned earlier, the origination fee for Subsidized and Unsubsidized loans have been reduced over the last few years.  In the past, borrowers also received an up-front interest rebate to reduce the fee, but 12 on-time payments had to be made or they lost that rebate.

As we reduce the fee, we must reduce the rebate.  Starting for disbursements on or after July 1, 2009, the fee becomes 1.5%.  Accordingly, the rebate amount for that same disbursement timeframe (on/after July 1, 2009) is 1.0%.

The COD edits currently in place for the fee amount (Edits 140, 141, 142, 143, and 144) will also be used to edit the rebate amount.  So next summer, as you plan your awards, you will need to be very mindful of when you originate and when you disburse.  We will also put out reminder guidance next summer to help.

As there is NO CHANGE to the PLUS fee (4%), there is NO CHANGE to the PLUS rebate...it remains at 1.5%

## What’s 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)

**Notes:**
ERROR CORRECTION: PRINTED PRESENTATION HAS INCORRECT IMPLEMENTATION DATE.  November 2008 date was moved to March 2009.

Recent legislation changed loan limits allowing a higher amount of unsubsidized loans.

The COD System has already been updated to accommodate the change, but additional changes will be added in March.

Edit 167 will edit at the Base Subsidized Award amount to ensure the Subsidized awards match the allowed limits.  This is new edit.
Edit 157 and Edit 39 will be modified slightly to clean up the editing logic to work with the new Edit 167.  Fortunately, since these are current edits, most of you won’t notice a change.

Of course, we always have to say that our edits aim to help schools, but does not remove the responsibility of the school to make sure the student is getting the correct amount they are allowed.

## Annual Loan Limits

**Graduate/ Professional Student**

- Up to $20,500 each academic year (maximum $8,500 subsidized)

**Notes:**
ERROR CORRECTION: PRINTED PRESENTATION HAS INCORRECT 3rd YEAR LOAN LIMIT IN INDEPENDENT COLUMN.  SHOULD BE 12,500 NOT 10, 500!

This chart reflects the current loan limits.  Beginning in March, the loan limits will be known as “Base Annual Loan Limit” and “Combined Annual Loan Limit”

## What’s 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

**Notes:**
Earlier we discussed the electronic MPN Web site and how a school can use it to set up its options and research eMPN data.

Right now, all those functions require a separate password and are housed on the eMPN Web site.  In March, as an effort to improve and to streamline services, we are moving all of the school functions to the COD Web site.

As a result, schools will NOT need to maintain a separate login ID and password and access will be available to research through the Web site you currently use most!

NO IMPACT TO STUDENTS and PARENTS!

## Agenda	

**Agenda****	**

- Roles and Responsibilities
- Direct Loan Basics
- Processing
- Recent Changes and Reminders
- What’s New for 2009-2010
- Tools and Resources

**Notes:**
In an effort to maximize time for questions, we will not cover the next 10 slides in detail.  Their purpose is better used as a summary of resources for when you are back at your offices.

Slides 64-68 provide school references including web sites, call centers, and publications/guides.

Slides 69-71 provide student references including web sites, call centers, and publications/guides.

ONE CORRECTION on page 64: DL web address is now www.direct.ed.gov

## Other Direct Loan Sessions

| Session #DL-02 | Direct Loan Servicing Fundamentals |
| --- | --- |
| Session #DL-03 | Direct Loan Tools (Hands On) |
| Session #DL-04 | Title IV Funding from COD to G5 (for Direct Loan Schools |
| Session #DL-05 | Unlocking the Potential of Direct Loan Reports |
| Session #DL-06 | COD Web Hands-On for Direct Loans |

**Notes:**
Other sessions offered here in Dallas that may also be beneficial.

## Tools & Resources-School Web Sites

**Tools & Resources-School Web Sites**

**COD Web site**
** **_**[http://cod.ed.gov](http://cod.ed.gov/)**_
**Direct Loan Information**
- _[http://](http://www.direct.ed.gov/)__[www.direct.ed.gov](http://www.direct.ed.gov/)_
**Federal Student Aid Information**
- _[http://](http://www.ifap.ed.gov/)__[www.ifap.ed.gov](http://www.ifap.ed.gov/)_

## Tools & Resources-School Call Centers

**COD School Relations Center**
- (800) 848-0978
**Direct Loan Servicing-School Services**
- (888) 877-7658
**Direct Loan Consolidation Center**
- (800) 557-7392

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

- Code of Federal Regulations
- Federal Student Aid Handbook
- COD Technical Reference
- Implementation Guide
- Blue Book
- NSLDS Enrollment Reporting Guide

**Tools & Resources-School Publications**

**Notes:**
New Direct Loan School Guide (revised in 2008) on IFAP or DL Web site
Code of Federal Regulations – on IFAP
Federal Student Aid Handbook - Financial Aid basics - IFAP
Tech Ref good basic processing information – www.fsadownload.ed.gov
Blue Book – financial – order or IFAP
NSLDS Enrollment Reporting Guide - Schools required to report enrollment status on regular basis – IFAP

## 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

## 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

## Tools & Resources-Borrower Web sites

**Federal Student Aid Information**
- _[http://](http://www.studentaid.ed.gov/)__[www.studentaid.ed.gov](http://www.studentaid.ed.gov/)_
**Direct Loan Servicing Center – Borrower Services**
- _[http://www.dl.ed.gov](http://www.dl.ed.gov/)_
**Direct Loan Consolidation Center**
- _[http://www.loanconsolidation.ed.gov](http://www.loanconsolidation.ed.gov/)_
**Federal Student Aid Ombudsman**
- _[http://www.ombudsman.ed.gov](http://www.ombudsman.ed.gov/)_

## Tools & Resources-Borrower Call Centers

**Federal Student Aid Information**
- (800) 433-7327
**COD School Relations-Applicant Services**
- (800) 557-7394
**Direct Loan Servicing Center – Borrower Services**
- (800)848-0979
**Direct Loan Consolidation Center**
- (800) 557-7392
**Federal Student Aid Ombudsman**
- (877) 557-2575

## 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)

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

**Tools & Resources-Borrower Publications**

**Notes:**
Many of these are available in Spanish as well as English. 
Can be found on the DL Web site or ordered from FSAPubs

## Contact Information

**Contact Information**

- We appreciate your feedback and comments.  We can be reached at:
-  _[david.hebrank@ed.gov](mailto:david.hebrank@ed.gov)_
-  _[wood.mason@ed.gov](mailto:wood.mason@ed.gov)_