1. Direct Loan Processing: Making COD Work for You
Session 19
Direct Loan Processing: Making COD Work for You
Chuck Hirman | Dec U.S. Department of Education 2014 FSA Training Conference for Financial Aid Professionals

2. Agenda COD Release 14.0 – new award year Funding Loan Origination Fees
PLUS Loans
Disbursements
Loan Period & Academic Year Reporting
SULA Fundamentals, Tips, Coming Soon
Rejects
Reports
Resources

3. COD Release 14.0 Implementation 3/27 – 3/29/2015
award year functionality added
Direct Loan Funding
~April: Initial authorization for advance funded schools with early disbursements
~June: 60% of anticipated funding needs for the year
~November: Remaining 40%
Daily processing: CFL increases when COD accepts actual disbursements
Need additional funds?
COD report settings
StudentLoans.gov preferences

4. G5 Award Numbers for
G5 award numbers are program and award year specific
Program
G5 Award Number
Award Year
Direct Loan
P268K16####
Trailing Year
TEACH Grant
P379T16####
Pell Grant
P063P15####
Leading Year
IASG
P408A15####
Campus-Based
FWS: P033A15####
SEOG: P007A15####
#### - Your school’s 4-digit G5 identification number

5. COD Report Settings for Award Year
’15-’16
Confirm COD reports for the new year will arrive in the format you want
Don’t forget to check the SAS too

6. StudentLoans.gov Preferences
Manage StudentLoans.gov in COD School Options
School/ School Information/ Options
Your choice whether to use any/all SLG functionality
Or, do those functions yourself on campus
Everything a borrower does in SLG is communicated
School responses
COD reports
COD website search functionality
SLG
COD

7. Non-Award Year Specific
COD Options for Managing StudentLoans.gov

8. Award Year Specific
COD Options for Managing StudentLoans.gov

9. Electronic Announcement posted 4/2/2013
Paper Refund Checks
We’re getting close (end of 2014) when they will no longer be accepted
Too often are mailed to the wrong place
Slower, more costly to process than electronic refunds
Treasury has ordered a complete discontinuation
If you haven’t done so yet – arrange to return funds to G5 electronically
Cash management regulations have long required refunds of $100,000 or more to be returned electronically
Electronic Announcement posted 4/2/2013

10. COD Cash Management Screens
COD website has a number of screens to help you track your funding and cash management
School Summary Information
Cash>NAPD
School Funding Information
CFL, Available Balance, NAPD
Net Draws, Cash>NAPD
School Summary Financial Information
Same info and format as SAS Cash Summary page
Cash Activity
Printer friendly button in right corner
Lists all drawdowns and refunds
COD.ED.GOV

11. Electronic Announcement posted 9/4/2014
Loan Origination Fees
Changes due to Sequestration
COD calculation/truncation rules are not changed
Electronic Announcement posted 9/4/2014
Earliest Disb Date
Sub/Unsub Orig Fee
PLUS Orig Fee
Before 7/1/2913
1.0%
4.0%
7/1/2013 – 11/30/2013
1.051%
4.204%
12/1/2013 – 9/30/2014
1.072%
4.288%
10/1/2014 – 9/30/2014
1.073%
4.292%

12. Electronic Announcement posted 9/4/2014
Origination Fees - New
New Reject-213
Actual Disbursement Submitted with EDD after an Established Date
The next “established date” we currently know of is 10/1/2015
We know the loan fees will be changing then but until we know what they will be we won’t accept the actual disbursements
CROF System-Generated Response
Once new fee percentages are known
COD will correct records having only anticipated disbursements
CROF15OP = award year
Electronic Announcement posted 9/4/2014

13. Final Regulations posted 10/23/2014
PLUS Loans - New
Adverse credit criteria to include if one/more debts have a total combined outstanding balance greater than $2085
90 days or more delinquent, or
Charged-off or placed in collections within past two years
Credit checks valid for 180 days
PLUS borrowers with adverse credit who appeal based on extenuating circumstances or obtain an endorser – must complete PLUS loan (credit) counseling
Final Regulations posted 10/23/2014

14. Disbursement Reporting Requirement
15-day reporting requirement
Federal Register posted 2/28/2013
Disbursements and adjustments made on/after 4/1/2013
Pell LEU and SULA all need prompt reporting to COD
For now COD edits are still looking at 30 days but the Regulations are tighter, 15 days
School Monitoring Report
30-Day Warning Report
Warning Edit 055
No. Edit Type Block Message
W Disbursement Disbursement Information Received 30 Days after Date of Disbursement

15. Disbursement Date Reporting
The actual disbursement date is the date a school credits the student’s account or pays the student or parent directly
Actual disbursement date reported to COD must be accurate due to interest calculations and various timeframes, deadlines, and a number of regulatory triggers (i.e. loan fees, interest rates)
We are seeing schools merely flipping the DRI to True but not first updating the disbursement date
Warning edit 055, School Monitoring Report, other implications
Electronic Announcement posted 1/29/2014

16. Upward Disbursement Adjustments
Should only be made to correct an erroneously reported actual disbursement
Interest is calculated from the sequence 01 date
If you give additional funds make a new disbursement for that additional amount

17. Disbursements – 120-Day Rule
For any loan type (Sub, Unsub, PLUS) if the borrower returns funds asking the disbursement be reduced you may accept those funds up to 120 days from the disbursement date
Reduce disbursement and report to COD
Re-disburse or return the money to G5
Borrower gets a break on interest and loan fees of returned amount
You are not required to do this beyond the regulatory right to cancel timeframes. However, a lower debt burden is a default less likely
Does not apply to returns required for regulatory reasons
Those must be made no matter when they’re discovered

18. Loan Periods & Academic Years
Correct reporting crucial to accurate SULA calculations
& forward – all borrowers, all loan types
Loan periods should include only terms/payment periods in which the borrower received (and retained) funds
Loan Period: period of enrollment for which the loan is intended
Academic Year: period used to track annual loan limits
Updates required in many instances if circumstances change
Dear Colleague Letter GEN posted 5/10/2013

19. Why Updating the Loan Period Matters
Loan Period Reporting
Why Updating the Loan Period Matters
Example:
Fall: 9/10/2014 – 12/10/2014
Spring: 1/10/2015 – 5/10/2015
School originates fall-spring loan, full-time attendance
SAY, summer trailer, summer attendance not required
SUP: #days in LP/#days in AY = 242/242 = 1.0 Years
But borrower doesn’t return in the spring
School needs to update LP to fall-only
SUP: #days in LP/#days in AY = 91/242 = 0.4 Years

20. Academic Year Reporting
Your academic year is school-defined
Minimum of 30 weeks of instruction and 24 semester/ 36 quarter credit hours for a credit-hour based program
No hour minimum for a graduate level program
Minimum of 26 weeks and 900 clock hours of instruction for a program measured in clock hours
Why is this significant for SULA?
We’re seeing loans with AY’s that are too short, even some less than half that
Since SUP = LP/AY … calculations are too high
Plus, are these schools also awarding new annual loan limits too soon?

21. The Loan Period/Acad Year Fraction
Subsidized Usage Period (SUP) = # Days in the Loan Period ….. if too high SUP is too high # Days in the Academic Year ….. if too low SUP is too high

22. Updating LP & the Annual Loan Limit Exception
Annual Loan Limit Exception to SUP = LP/AY
Standard-term programs and non-standard-term programs that are substantially equal and each at least nine weeks in length
If borrower receives full annual loan limit for grade level
And loan period < academic year
A SUP of 1.0 Years will be calculated, regardless of the LP/AY calculation

23. Annual Loan Limit Exception - Continued
Example – loan originated with 2 anticipated disbs
Loan amount: $3500
LP = AY: 9/10/2014 – 5/10/ SUP = 1.0 Years
Fall disb made, student withdraws before spring disb
School correctly updates LP per GEN-13-13
LP = Fall, AY = Fall-Spring SUP = 1.0 Years still!
Why? The annual loan limit exception was triggered
Solution: zero out the unused second disbursement and reduce the loan amount

24. Updating Unused Loans
Example: Loan was originated and an actual disbursement was made but later backed out
COD processing rules:
An actual Subsidized Usage Period (SUP) will be calculated if the incoming record has any actual disbursements
When an award is inactivated the actual Subsidized Usage Period (SUP) is cancelled
What does this mean?
Once you’ve reported an actual disbursement on a loan the only way for the SUP to be fully removed is to inactivate the loan
Reduce all disbursements to zero
Reduce the loan amount to zero

25. 150% – Terms & Concepts SULA First-time borrower
Maximum Eligibility Period (MEP)
Subsidized Usage Period (SUP)
Remaining Eligibility Period (REP)
XML Schema
Tags
SULA Calculations
COD – system of record for loan records
NSLDS – system of record for enrollment reporting

26. SULA Fundamentals SULA: Subsidized Usage Limit Applies
First-time borrower: Any borrower who had no balance on a DL/FFEL on 7/1/2013 or afterwards at the time they obtain a loan
Maximum Eligibility Period (MEP): Set at 150% the published length of the program the borrower is enrolled in
Subsidized Usage Period (SUP): The loan’s subsidized usage, which is basically length of loan period divided by length of academic year
Remaining Eligibility Period (REP): The borrower’s remaining eligibility for subsidized loans:
MEP - ∑SUPs = REP

27. SULA Information - Responses
SULA usage communicated in two response types:
System-generated response: CRSU
Person, Award, or Disbursement level
1. Response File
2. System-Generated Response
Origination of awards
Maintenance on awards
Activity on another loan for a student at your school
Changes in enrollment status
Changes to Non-Credential Teacher Certification Program data
Discharge of a loan
Payment to Servicer

28. SULA Information - Web Pages
Two new SULA web pages have been added to the COD website:
Subsidized Eligibility Information page
Link on the Person Direct Loan Information page
Subsidized Usage Limit Applies Request page
Request the most recent SULA information via CRSU
Reachable via Batch tab, left navigation panel
NOTE: Privacy information shown in next pages is fake data from our test database

29. Subsidized Eligibility Information Page
COD website
Person Tab
Subsidized Eligibility Search
SULA
MEP
SUP
REP

30. SULA Request Page
COD website/ Batch Tab/ SULA Request COD will generate a CRSU and send to TG Mailbox

31. SULA Calculator – Coming Soon
Working on it now, implemented in Spring
On the COD website
Allows you to plug in subsidized loan values either for loans already on the system or new loans you are going to send
Won’t create/build/change any loans – it’s just a calculator to help you see if a loan can make it through when remaining eligibility is in question
Won’t need to keep sending the loan, getting it rejected
Optional

32. SULA Loss Dispute Process - Soon
Working on it now, implemented in Spring
On the COD website
Forward to FSA’s attention when SULA particulars need correcting on a loan and the former school can’t (won’t?) do so
Intended for closed-school loans
By far the most efficient means of getting former loans corrected is by a courtesy call directly from financial aid office to financial aid office

33. COD Technical Reference, Volume II, Section 4 - Edits
COD Rejects & Warnings
Rejects – record not built and will not be in Person/Award search on COD website
Warnings – record was processed, FYI concerning your processing/timing
Watch your rejects
Rejected disbursements = unsubstantiated funds
Use your software’s import edit report
Review batches on the COD website
COD Technical Reference, Volume II, Section 4 - Edits

34. Top Hits – Rejects & Warnings
Edit
Some of the Top Edits
# of Hits
W-54
Disbursement Date Within 7 Days or Passed, Disbursement Release Indicator Set To “False”
17,627,962
W-55
Disbursement Information Received 30 Days after Date of Disbursement
8,199,110
R-50
Disbursement Date Outside Allowable Window
917,828
R-140
Incorrect Origination Fee Percent and/or Interest Rebate Percent on New Awards
705,854
W-36
PLUS Credit Decision Status is not accepted for this PLUS award
595,949
COD Technical Reference, Volume II, Section 4

35. Resolving Your COD Rejects
Response
Work the Response when you import it
Query your system for rejects
Most systems will keep resending rejected records until they are accepted
COD website Batch Search functionality
Since rejected records were not “built” they will not be found in Person/Award Search
Batch Search will tell you what the rejects were

36. COD Batch Search Enter school ID and date range (up to 60 days)
Or, enter SSN and
choose specific award year or select all award years for complete history

37. Some SULA-Related Rejects
Reject Code
Trigger
Reject 050
Disbursement Date Outside Allowable Window
Reject 204*
Incorrect Program CIP Code Submitted
Reject 205*
Payment Period Start Date (PPSD) is outside the Loan Period
Reject 206*
Remaining Subsidized Eligibility is less than zero for this award
*Electronic Announcement posted 10/31/2014

38. Electronic Announcement posted 8/22/2014
Reject Edit 050
Disbursement Date Outside Allowable Window – Update
Disbursement must be no earlier than 10 days before the loan period start
Disbursement must be no later than 180 days after the loan period end
But schools were hitting this reject after zeroing out an actual disbursement and updating the loan period to remove term/payment period per DCL GEN-13-13
COD “off-cycle” change on 9/14/2014
Now COD will ignore actual disbursements reduced to $0
Electronic Announcement posted 8/22/2014

39. Electronic Announcement posted 8/22/2014
Reject Edit 205
Payment Period Start Date is Outside the Award Begin and End dates
Issue:
Per GEN schools are required to shorten the LP to exclude terms/payment periods where no disbursement is made (or one was made but later zeroed out)
But each term/payment period has its own PPSD and when the LP is shortened and “orphans” a PPSD – Edit-205 fires
Solution:
COD R14.0 will relax the edit as long as the disbursement = $0
Until then zero out the disbursement, change the PPSD to fall within the new LP dates, and then update the LP
Electronic Announcement posted 8/22/2014

40. Reject Edit 206
Remaining Subsidized Eligibility is less than zero for this award
You’ve sent a Subsidized loan to COD and it came back rejected with Edit 206
Of course, everything could be reported optimally and the borrower simply has insufficient SULA eligibility so … award unsubsidized
Check the reporting of this rejected loan and make updates if necessary
Confirm that prior loans already on the COD system were reported and updated correctly

41. Reject Edit 206 - Continued
Has this loan been reported so the borrower can receive the maximum amount of subsidized funds for which they are eligible?
Maximum Eligibility - ∑SUPs = Remaining Eligibility
Subsidized Usage Period = LP/AY
Academic Year – at least the 26 or 30 week minimum?
Loan Period – includes only terms/payment periods where the borrower receives loan funds?
Enrollment Status – will the borrower be attending half-time or three-quarters-time?
Loan Amount – is the annual loan limit exception being triggered?

42. Reject Edit 206 - Continued
Have previous loans been reported and updated correctly?
Although outside your control you can still be instrumental in getting those loans updated by contacting the former school
So, as a professional courtesy, if you are that former school please update the loan promptly
If the previous loan is from a now closed school – we’re working on it

43. COD Reports – Can Help You Manage:
Loan Origination Process
Duplicate Student Borrower report
Completed PLUS Application report*
Counseling report*
Subsidized Loan Usage Change report
Master Promissory Notes
Completed MPN report*
Expired MPN report
MPNs Due to Expire report
MPN Discharge report
Disbursement Process
Actual Disbursement list
Pending Disbursement list
COD Action Queue
30-Day Warning report
Inactive Loans report
*From activity completed on StudentLoans.gov

44. COD Reports – COD Technical Reference
FSADownload.ed.gov
What the report can be used for
Business Rules
Formats
Message classes
When it’s generated
Record Layouts
What data is included
Mock-up Samples

45. COD Reports – Format & Delivery

46. COD Website - Newsbox

47. COD Website - Newsbox

48. COD School Monitoring Report
Produced weekly if any of the following conditions occur:
Pell POP
30-day reporting missed (should be 15 days anyhow!)
Unsubstantiated cash > 30 days
Posted to your COD Newsbox (DL and Pell)
Also sent to your SAIG Mailbox (SCHMONOP)
We check for those conditions weekly so schools should check for that report that often too

49. Direct Subsidized Loan Usage Change Report
Displays Subsidized loans for a borrower when there is a change to SULA calculated values
Generated weekly on borrowers have changes to:
Maximum Subsidized Eligibility Period
Actual (or Anticipated) Subsidized Usage Period
Actual (or Anticipated) Non-Credential Teacher Certification Subsidized Usage Period
COD Newsbox
CSV format
COD Technical Reference, Volume 6, Section 8

50. Electronic Announcement posted 1/28/2014
Report Readers
Simplified way of importing some COD files into Excel
SAS Disbursement Detail on Demand
Pell Grant Reconciliation File
Pell Grant YTD File
Readers & instructions
COD website “COD Resources”
Request “fixed-length” files
Electronic Announcement posted 1/28/2014

51. 1314 Direct Loan Program Year Closeout
Deadline 7/31/2015
Closeout completed on the COD website by submitting the Balance Confirmation Form
Made available when the School Account Statement (SAS) reflects $0 ending cash balance
If you miss the deadline and haven’t requested Extended Processing a Final Demand Letter will be issued
After that a Receivable is produced – billing the school the remaining balance plus interest

52. Resources: New COD Communications Page
COD website
“File Share & Messages”
File share
FSA campaigns with student-specific information
Customized reports
will alert schools to file availability
Broadcast messages
Log into COD/ School tab/ School Summary Info page
File Share/Messages link on left side of page
Also, “Today’s Update” renamed “COD Resources”
Electronic Announcement dated 6/20/2014

53. SULA Resources Reporting of Loan Periods & Academic Years
Federal Loan School Support Team
Dear Colleague Letter GEN-13-13
Electronic Announcements & Webinar recording
150%/SULA Regulations & Processing
Federal Registers, Electronic Announcements, Webinar recordings, NSLDS Newsletters, COD Technical Reference

54. COD Computer-Based Training
Some CBT’s have been updated with SULA
Locating Direct Loan Information
Updating and Creating Records
Working the Action Queue
IFAP/ Tools for Schools/ COD Computer-Based Training
Electronic Announcement posted 10/3/2014

55. School Contact Information at COD
Contact information is too often outdated and inaccurate
We don’t know who to contact when we see a problem developing
COD outreach
FSA efforts to be proactive
Financial Aid Administrator, CFO, President
Update E-App in eligcert.ed.gov
Direct Loan and Pell contacts
Update directly on the COD website

56. Contact Information
Chuck Hirman Federal Student Aid Seattle, WA

57. QUESTIONS?