1. Direct Lending PHEAA’s FAS Solution Presented by: Jan Napiltonia, AVP Financial Aid Services

2. 2 Agenda Stakeholders Key Concepts –Loan Processing –Creating Origination & Disbursements –Sending O & D on FAS –Adjusting a Disbursement on FAS –Loan Funding COD Options Reconciliation Reports

3. 3 Key Stakeholders School –Determines eligibility –Originates and Disburses Loans (Certifies) –Confirms Entrance counseling MPN completion Sends student notification of disbursement Exit counseling –Disclosure statements –Reports enrollment status –Default prevention

4. 4 Key Stakeholders USDE Funding –G5 Release of funds Return of funds Manages all aspects of loan processing –Approves/Denies –Reporting and reconciliation tools At the schools discretion provides facility for: –Electronic MPN –Entrance counseling –Disclosure Statements Electronic Paper –Exit counseling NSLDS

5. 5 Loan Processing Common Record –Student (Demographic) data –Award data –Disbursement data –XML Response files –A – Accepted/Approved –R – Rejected –May also contain data on MPNs Credit checks (Plus)

6. 6 Creating Award & Disbursement –Loan Origination (Certification) Award –Establishes Loan Award Disbursement –False – Pending (Doesn’t affect CFL) –True – Actual »Substantiates drawdown and can affect CFL »Can be sent within 7 days of the disbursement date –Two step process if pending disbursement sent first –Disbursement Number –Disbursement Sequence »Iterations/adjustments »Changes if award amount changes »Doesn’t change if only DRI being changed to ‘True’ –Award & Disbursements are sent together –Total Disbursements must equal the Award amount

7. 7 Creating O & D on FAS Profile Concept –Pre-populate Award & Disbursement data –Accessed from FACR – F3 –Set send indicator based on range of disbursement dates Disbursement date with in 7 days And Disbursement indicator = ‘True’ –Auto update the DRI to ‘True’ & send to COD, if with in 7 days –Calculate Award Amounts Based on annual limits –Unlimited number

8. 8 Creating O & D on FAS – Case Study Semester-based Academic Calendar Award=$3500 Disbursement Dates = 09/15/2010 & 01/16/2011 Disbursement Release Indicator (DRI) = False or Pending

9. 9 Creating O & D on FAS – Case Study DLIM

10. 10 Creating O & D on FAS – Case Study DLIM List

11. 11 Creating O & D on FAS – Case Study Award Detail

12. 12 Creating O & D on FAS – Case Study PDSB Menu

13. 13 Creating O & D on FAS – Case Study PDSB

14. 14 Creating O & D on FAS - Case Study Disbursement Detail

15. 15 Sending O & D on FAS Disbursements are created as ‘Pending’ awards. DRI=F Pending awards are not automatically sent to COD Transmit Indicator must be updated to send Pending disbursements. Options to send Pending awards –Update from the disbursement list, page by page –Set indicator on Master profile to ‘auto update DRI’. The system will update all Pending indicators to True (Actual) if it is within 7 days of the disbursement date and transmit them to COD –AWDC Mass update of Direct Loans –A mass update of the transmit indicator will be added to disbursement list

16. 16 Sending Actual Disbursements on FAS – Case Study When an accepted response is returned for ‘pending’ disbursements, FAS will automatically create new disbursements with DRI=‘F’ in anticipation of sending ‘actual’ disbursements Award = $3500 Initial Pending disbursement submission DRI set to ‘False’ on both Disbursements Disb # 1/Seq #1 $1750.00 Disb # 2/Seq #1 $1750.00 Actual First disbursement (with 7 days of disbursement date) Second submission DRI set to ‘True’, Disb # 1/Seq #1 $1750.00 DRI is still ‘False’, Disb # 2/Seq #1 $1750.00 Actual Second disbursement (with 7 days of disbursement date) Third submission DRI ‘True’, Disb # 1/Seq #1 $1750.00 DRI is set to ‘True’, Disb # 2/Seq #1 $1750.00 Sequence Number is not incremented when changing only the DRI

17. 17 Adjusting a Disbursement on FAS Pending Disbursement –Individual disbursements can be adjusted –Sequence number is incremented Actual Fully Disbursed –Adjust the most recent –Continue working backward until you reach the new amount –Sequence number is incremented

18. 18 Adjusting a Disbursement on FAS – Case Study Accepted Pending disbursement Initial submission Award = $3500 Disb # 1/Seq #1 $1750.00 Disb # 2/Seq #1 $1750.00 Adjustment Award = $2000 Go to the disbursement list and select Disb #1 Disb # 1/Seq # 1, change disbursement amount to $1000.00 Go to the disbursement list and select Disb #2 Disb # 2/Seq # 1 change disbursement amount to $1000.00 Sequence # must be incremented, since the disbursement amount is changing

19. 19 Adjusting a Disbursement on FAS – Case Study Actual fully disbursement Initial submission Award = $3500 Disb # 1/Seq #1 $1750.00 Disb # 2/Seq #1 $1750.00 Adjustment Award = $1000 Adjust the award record by pressing F11, from the award detail Status will be ‘not ready’ Go to the disbursement list and select Disb #2, press F11 to adjust Disb # 2/Seq # 2 $0 Go to the disbursement list and select Disb #1, press F11 to adjust Disb # 1/Seq # 2 $1000.00 Always adjust the most recent disbursement first

20. 20 Adjusting a Disbursement on FAS – Case Study To increase a Direct Loan an ‘actual’ fully disbursement Initial submission Award = $2000 Disb # 1/Seq #1 $1000.00 Disb # 2/Seq #1 $1000.00 Adjustment Award = $3500 Adjust the award record by pressing F11from award detail Status will be ‘not ready’ Create a new disbursement from the list or detail Disb # 1/Seq #1 $1000.00 Disb # 2/Seq #1 $1000.00 Disb # 3/Seq #1 $1500.00

21. 21 Loan Funding Advanced Funding –Initial Current Funding Level (CFL) Send ‘actual’ disbursements (substantiate) –No sooner than 7 days prior to disbursement date Schools drawdown funds from G5 Funds must be credited within 3 business days Funds may be drawndown before O & D sent to COD But must substantiate drawdowns with in 30 days Funds are not student specific May reallocate funds –CFL increased Actual disbursements greater than initial CFL

22. 22 Loan Funding Booked Loan –Completed, Signed MPN –At least one accepted, actual disbursement –Accepted Award Record –Also for PLUS – Accepted Credit Check –Loan added to the Servicing System as a collectable asset –Student: Legally obligated to repay loan –Impacts compliance with the ’30-day rule’

23. 23 COD Options COD defaults to Multi year Promissory note eMPN or paper? Do you want to require an Award/Origination record before a student can complete their eMPN? Do you want to include an electronic message to students when they complete their eMPN? If you need a paper MPN who will print them? –COD or school

24. 24 COD Options New for 2010-11 –Will school participate in electronic Parent PLUS Application? If yes, what date do you want to begin Remember credit checks are only good for 90 days. –How often do you want to get Parent PLUS Applications? Daily or On demand –Will school participate in electronic Grad PLUS Application? If yes, what date do you want to begin Remember credit checks are only good for 90 days. –How often do you want to get Grad PLUS Applications? Daily or On demand

25. 25 COD Options Entrance and Exit counseling reports –In transition –Moving from DL Servicing

26. 26 Reconciliation –Verify that funding requests are offset by disbursement requests Must be completed monthly Process must be documented School compares COD’s records to its records –Cash Activity –Disbursement Activity –Difference must be $0

27. 27 Reconciliation Year-end Closeout Final reconciliation for the award year Must be completed no later than published deadline Formal confirmation must be sent to/via COD Contact COD School Relations Center to arrange post-closeout processing (if necessary)

28. 28 Reconciliation Direct Loan Tools –Import School Account Statement (COD) –Import School data from SBS FAS will extract data for importing into DL Tools

29. 29 COD Reports School Account Statement (SAS) –Run Monthly-First full weekend of the month –Includes all data through the last day of the previous month Cash Summary Disbursement Summary by Loan Type Cash Detail Loan Detail, Loan level Loan Detail, Disbursement Activity Level –Used for Reconciliation

30. 30 COD Reports Pending Disbursement List –Weekly –DRI=False –Reported period is a 45 day window into the future from the date of the report or any date in the past (Disb date < or = to 45 days from the report date) –Used for: Determining future funding needs Identify pending disbursements that should be actual Identify awards or disbursements that need to be inactivated

31. 31 COD Reports 30 Day Warning Report –Monthly –Unbooked awards by type –MPNs not originated –90 days worth of data beginning 120 days prior to the report run date Award accepted 10/15/2010 not MPN or actual disbursement Will appear on report after 30 days have passed since the award was accepted –Used for: Identify missing pieces necessary for booking loan Identify MPNs awaiting awards Monitor compliance with 30 day reporting requirement

32. 32 COD Reports Inactive Report –Monthly –Award and disbursements have been adjusted to $0 for the reporting period –Used for: Confirming accurate inactive loans Identify awards that have dropped off the 30- day warning report

33. 33 COD Reports Duplicate Student Borrower Report –Monthly –Accepted multiple sub and/or unsub with overlapping academic years –Used for: Identifying potential over awards

34. 34 COD Reports SSN/Name/Date of Birth Change Report –Weekly –Identifier changes, 90 days prior to the report end date –Student associated with school during any of the 3 most recent award years –Used confirm identifier changes

35. 35 COD Reports Entrance Counseling Report –Daily, weekly, or monthly –Used to identify students who have completed entrance counseling –Subject to changes since Entrance counseling is moving from DL Servicing

36. 36 COD Reports Exit Counseling Report –Daily, weekly, or monthly –Used to identify students who have completed exit counseling –Subject to changes since Entrance counseling is moving from DL Servicing

37. 37 COD Reports Other reports –Delinquent borrowers –MPN Discharge –Expired MPNs –MPNs due to expire

38. 38 Reports COD Reports put to page center Customer reports made available from FAS

39. 39 Financial Aid Services Staff 1-800-443-0646 Option 4, 2 Jan Napiltonia - AVP (717-720-2077) Mike Byers – Manager, FAS Lisa Humphrey Cathy Machamer Development Lead Customer Support Lead John Aunkst Skip Hetrick Steve Angle Laura Holmes Janice Contino Andy Martin Pamela Easley Marie Pellish Kara Marshall Jodi Feagley – Agreements & Administrative Support Brad Fisher – SAS Support for FAS & ALS 61