Foreign Schools: Direct Loans and the COD System Session #54 Foreign Schools: Direct Loans and the COD System Wood Mason | Dec. 2014 U.S. Department of Education 2014 FSA Training Conference for Financial Aid Professionals

Agenda Originating Disbursing Batch Screens Reconciliation

Direct Loans & COD for Foreign Schools ALL schools originate and disburse Direct Subsidized, Unsubsidized, and PLUS Loan awards via COD Some schools use a resident software application and originate and disburse multiple awards for multiple students via the “batch” mode Some schools contract with a Third Party Servicer (TPS) to process their origination and disbursement data for them Some schools originate and disburse via the COD Reporting Website Direct Loan Origination Tool Legacy Origination Process Data resides on the COD database the same way either way

Direct Loans & COD for Foreign Schools An embedded utility that allows a school to build and submit a “quasi-batch” of Direct Loan origination and disbursement data for up to 100 students online via the COD reporting website It calculates award amounts based on published loan limits, cost of attendance, and individual student information taken from CPS data Expected Family Contribution (EFC) Grade Level Dependency Status For schools with less than 8,000 students

Direct Loans & COD for Foreign Schools First you must determine that your student/borrower is Title IV eligible 34 CFR 668 – Student Assistance General Provisions 668.31 – 668.40 Subpart C You MUST secure an “output” document before you originate an award Institutional Student Information Record – ISIR Student Aid Report – SAR You can view the student’s CPS data (Transactions) via the COD Reporting Website as well Person tab/Applicant Search

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools 00000000

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools Step 2 allows you to assign a Cost of Attendance (COA) Profile or create a new one for a particular student or group of students

Direct Loans & COD for Foreign Schools Step 3 allows you to assign an Award Profile you’ve created, or create a new one to assign, for a particular student or group of students

Direct Loans & COD for Foreign Schools Step 3 allows you to assign an Award Profile you’ve created, or create a new one to assign, for a particular student or group of students

Direct Loans & COD for Foreign Schools Reviewing the award detail prior to submission of the batch

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools Direct Loan awards can be created and submitted individually via a legacy origination and disbursement process on the COD Reporting Website Borrower/student must be created if not already on the COD website If already on the database some demographic data will be pre-filled ALL required award data are provided by the school user Award ID Amount Disbursements No automated application of award data

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools .

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools 00000000

Direct Loans & COD for Foreign Schools Disbursement

Direct Loans & COD for Foreign Schools Disbursement can be accomplished from the Award Disbursement Information screen OR the Action Queue ALL Pending disbursements are displayed on the Action Queue Batch tab then Action Queue link Multiple search functionality The Disbursement Release Indicator (DRI) on a Pending disbursement can be changed to = TRUE by checking the box next to it on either screen Either will transmit the actual disbursement data to COD Make sure the date of disbursement you are transmitting to COD is the ACTUAL date of disbursement

Direct Loans & COD for Foreign Schools Schools may use the disbursement screen on an individual award to process actual disbursement data when appropriate. Remember, actual disbursement data can be transmitted to COD up to 7 days ahead of the actual date of disbursement

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools Before you can disburse any award you must again confirm eligibility of the student and all tasks have been completed Required entrance counseling No COD edit First-year, first-time borrowers AND first-time GRAD/Professional Student PLUS Loan Secured an endorser, or successfully appealed, a denied credit check COD warning edit #036 on origination COD reject edit #080 on disbursement Completed and submitted a Master Promissory Note (MPN) COD reject edit #081

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools The Counseling Report is generated and posted weekly to your School NewsBox in CSV format

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools Credit Checks

Direct Loans & COD for Foreign Schools Federal Direct PLUS Loan borrowers require a credit check Credit check result can be Accepted Denied Pending PLUS loan with credit declination can be accepted and displayed on COD but with an unacceptable credit decision Can’t disburse unless and until credit denial is cured by a successful appeal via COD or by borrower securing an endorser

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools A denied credit check based on adverse credit history can be appealed Appeal on errant data on the credit report Appeal based on extenuating circumstances 34 CFR 685.200 Borrower submits specific documents requested by COD Reconsideration appeal Borrower was denied ONLY for Charge-Off Accounts and/or Collection Accounts and/or a 90-day delinquent account AND the total outstanding balance is equal to, or less than, $2,085 OR The borrower has at least one active accepted award on file with an EDD on or after 7/1/2010 and before 07/30/2013 with at least one funded disbursement and no endorser

Direct Loans & COD for Foreign Schools A Direct PLUS Loan borrower can secure an endorser CANNOT be the student for whom the loan is intended Endorser undergoes a credit history check Endorser CANNOT appeal denial due to an adverse credit history Endorser completes an Endorser Addendum Endorser promises to pay outstanding principal balance, accrued interest, and any penalties, AND any collection costs Paper or electronic via StudentLoans.gov An endorsed loan is reported to the credit bureau School receives a “CO” common record response coded “E” for endorser

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools Federal Direct PLUS Loan - Endorser Endorser data and endorsed amount displayed on the COD Award Detail Information screen Cannot disburse more than the lesser of the endorsed amount or loan amount approved Endorsed amount is displayed on response from StudentLoans.gov CANNOT increase a PLUS loan with an endorser Must create and originate a subsequent PLUS loan A new credit history on borrower and endorser if last credit check is older than 90 days* *180 days with COD Release 14.0

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools Federal Direct Subsidized, Unsubsidized, and Direct PLUS Loan Master Promissory Note (MPN) Foreign schools use single-year functionality of the MPN Your borrower MUST execute a new MPN for each academic year BOTH loan types can link to this MPN Loans link to the MPN with a match on the borrower’s SSN, DOB, first two characters of his or her first name AND your Direct Loan School Code The Direct Loan School Code on the MPN must match the Direct Loan School Code in the loan ID If multiple loans for one academic year are originated and disbursed they link to the same MPN with the above criteria AND the same academic year start/end dates

Direct Loans & COD for Foreign Schools Federal Direct Subsidized & Unsubsidized, PLUS Loan MPN Unique MPN for each loan type XXXXXXXXXN14GXXXXX001 - PLUS Loan MPN ID XXXXXXXXXM14GXXXXX001 – Sub/Unsub MPN ID Direct PLUS Loan MPN contains borrower and/or student data Parent Direct PLUS Loan links on the SSN, DOB, and first two characters of the first name of both borrower and student Unique MPN for each parent/student “pair” if multiple dependent students ALL MPNs Expire 10 years from date of receipt at COD 12 months if there’s no disbursement on a linked loan

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools Batch Screens

Direct Loans & COD for Foreign Schools 60-day search window

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools Reconciliation

Direct Loans & COD for Foreign Schools Reconciliation is the process by which Title IV aid (Direct Loans) recorded on Department of Education systems is reviewed and compared with your school’s internal records ALL Direct Loan schools MUST reconcile monthly Discrepancies are identified and resolved Reasons for remaining cash balances are documented Keep this in mind…ALL Foreign schools are “Records First” schools No CFL can be generated, and no available balance at G5 can be generated, until you submit, and COD accepts, actual disbursement data Unless you have reduced a Direct Loan amount and NOT returned the cash you should NOT have unsubstantiated cash

Direct Loans & COD for Foreign Schools Key Reconciliation Players Financial Aid Office Business Office Reconcile Internally Reconcile with COD Reconcile with COD G 5 COD Resource 62

Direct Loans & COD for Foreign Schools Internal reconciliation takes place regularly between the financial aid office and the business/bursar/comptroller office (money office) Dollars and dates on the financial aid system match EXACTLY dollars and dates on the money office system Reasons for remaining cash balances are documented Be mindful of cash management regulations Drawn funds MUST be disbursed within 3 days of receipt at your bank External reconciliation compares your school data to that found on Department of Education systems (COD & G5)

Direct Loans & COD for Foreign Schools Key Internal Reconciliation Players Financial Aid Office Business Office Reconcile Internally

Direct Loans & COD for Foreign Schools If you can receive and use the School Account Statement you need to reconcile to that document Provides the Department’s official monthly Ending Cash Balance (ECB) Generated the first FULL weekend of the month Data up to the end of the previous month Can be downloaded from EDConnect and imported into DL Tools software for display You MUST reconcile monthly to the balances reflected on the SAS and you MUST document that you have done so

Direct Loans & COD for Foreign Schools School Receives SAS NO Compare Cash Detail Compare Loan Detail NO Resolve Issues Resolved ? Match ? Compare Cash Summary YES YES DONE (Documentation) 66

Direct Loans & COD for Foreign Schools If you cannot receive and use the School Account Statement COD has reports and financial screens to assist you Pending Disbursement Listing Identifies pending disbursements that should be actual disbursements Or should be reduced to $0 Lists pending disbursements 45 days in the future and all in the past Direct Loan Actual Disbursement List Displays actual disbursements posted in COD for reported week (Saturday – Friday) Do actual disbursements and amounts posted to COD match EXACTLY what is posted to student accounts

Direct Loans & COD for Foreign Schools COD has reports and financial screens to help you 30-Day Warning Report Identifies Loan Origination Records (LORs) received at COD that do not have a linked MPN or actual disbursement Identifies MPNs received that are in a Pending status No LOR received that can link to the MPN

Direct Loans & COD for Foreign Schools Check this page often for all awards and award years to make sure there is no Cash>Accepted and Posted Disbursements. Check Prior award Years Too!!! Please keep contact information updated!

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools Mirrors the SAS Cash Summary Updated Daily This is a “dynamic” screen, meaning it changes whenever there has been financial activity Can’t receive the SAS? Well here’s an emulation of the Cash portion of the document

Direct Loans & COD for Foreign Schools

Direct Loans & COD for Foreign Schools At the end of the Program Year, you must “closeout” via the Balance Confirmation Screen on the COD website Becomes “live” after you receive your $0 Balance e-mail You can closeout after you receive your last SAS with a $0 ECB The screen displays net draws and net disbursements When your last SAS reflects a $0 ECB, and you are done processing for that award year, you should closeout! David is going to speak on the mechanics of monthly reconciliation in his session

QUESTIONS? Wood Mason wood.mason@ed.gov 770-383-9662