transitioning to direct loans. pending legislation student aid and fiscal responsibility act – hr...
TRANSCRIPT
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Transitioning to Direct Loans
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Pending Legislation
Student Aid and Fiscal Responsibility Act – HR 3221 Passed the House of Representatives 9/17/2009
Mandatory Pell Grant funding100% Direct Loans July 1, 2009 and forward
Expand/modify Perkins Loan Program
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Where are we now…
Transition Planning and ActivitiesDeveloped Customer Support plan
for the transition that includes support for all phases of transitioning
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Where are we now…
COD System capacity enhancements for 100% FFELP volume in progress, on time and on taget
FSA Customer Service Centers Increased and trained staffMonitor incoming volumeCOD has dedicated OnBoarding Team to
assist setup completion requests and “starts”
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Where are we now…
Other FSA systems gearing upmyDirectLoan eMPN websiteNSLDSG5
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Where are we now…
Teams designed for targeted support Graduate/ProfessionalSmall schoolsCareer CollegesCommunity CollegesHBCU, HSI, and Tribally controlled collegesForeign schoolsPacific Island Schools
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Where are we now…
Selected 4 additional Servicers Great Lakes Educational Loan
ServicesNelNetSallie MaeAES PHEAA
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Where are we now…
TrainingSpring and Summer “new school” DL
trainingDirect Loan processing with EdExpressBusiness OfficersForeign SchoolsExtensive new suite of DL training
Up to 4x per month after January
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Where YOU Are Now…
FSA made benign changes to most school profiles
FSA made benign changes to most TG mailboxes
Does NOT obligate school to process Direct Loans
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Where YOU Are Now…
What do you do next to be preparedwww.direct.ed.gov/participating.html
Complete setup [email protected]
Request completion of FSA setup800/848-0978
[email protected] Transition Team
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…to make you comfortable and hopefully not blue…
Something old, something new…
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The sameVirtually all of the regulations
Origination/Certification
Loan type and interest*
MPN
Counseling
*FFELP PLUS 8.5%, D/L PLUS 7.9%
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Differences
Disbursement
Origination Fee/Upfront rebate
Reconciliation
Monthly
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Differences
Cash
Direct Loan schools calculate and draw immediate need
Single source – G5
Direct Loan Code
Main Campus/Additional Location
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What’s New?Beginning in March 2010, the eMPN
website will become the myDirectLoan website.
The myDirectLoan website will continue to allow users to:
Complete an electronic promissory noteView and print electronic disclosure statements
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What’s New?
Beginning in March 2010, the myDirectLoan website will be enhanced to:
Allow Parents and Graduate Students to complete a PLUS Application
Allow Direct Loan borrowers to complete Entrance Counseling
Allow endorsers to endorse a PLUS Loan electronically
Allow borrowers to electronically appeal credit check decisions during the application process
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Voila!
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myDirectLoan log in
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PLUS Process- New Features
Save all Parent/Student relationships to reduce re-entry in subsequent Award Years
Parents are able to submit multiple students and schools during a single application process
Allow Parents to resubmit applications for subsequent Award Years
Send electronic notifications to all schools included in a completed PLUS loan application
Streamline the Application/Promissory Note Process
Parent/Student Identifier and School information submitted in the PLUS loan application will be pre-populated on all applicable promissory notes
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6 New DL School Options
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• Default values will be populated in the School Options fields• The new options are not award year specific• Default values for the one time update are listed below:
Field Name Valid Values Displayed on the Web
One Time Update Entries:
Participate in Electronic Parent PLUS Application Yes or No Yes
Participate in Electronic Parent PLUS Application Begin Date
MM/DD/YYYY 05/01/2010
Parent PLUS Application Response Option Daily or On Demand Daily
Participate in Electronic Grad PLUS Application Yes or No Yes
Grad PLUS Application Response Option MM/DD/YYYY 05/01/2010
Participate in Electronic Grad PLUS Application Begin Date
Daily or On Demand Daily
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Entrance Counseling
The “What You Need” section of the myDirectLoan homepage provides users a guide for Entrance Counseling
Information on Entrance Counseling and a link to the PIN site is provided
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Direct Loan Processing Cycle
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Originate
Similar to Grants/FFELPConfirm eligibilityDetermine award/loan amountCreate award
School transmits award/loan origination data to CODVia Common Record and same
transmission as Pell Grant data
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OriginatePLUS loan requires credit check
Systemic check via Loan Origination submission
School check via COD websiteOr after March 27, 2010… borrower
initiateDenial Packet
Explanation for denial/appeal processPre-filled endorser formMaterials to submit endorser form
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Direct Loan Processing Cycle
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Disbursements
Advanced Funded SchoolsCalculate immediate needDraw funds from same source as other
Title IV award funds - G5Flexibility to avoid excess cash
Remember Cash Management RulesMust submit data within 30 days of eventActual Disbursement Data substantiates drawn
fundsALWAYS submit actual date
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Master Promissory Note
One lender, one MPNNo linked MPN no disbursement Paper or electronicAll MPNs 10-year active
Provides borrower mobilitySchool selected options
COD School Options screenCOD prints paper note options
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Booked loan
A “Booked” Loan is a GOOD thing…Accepted Origination record, MPN
and 1st actual disbursementIs now a binding obligation between
borrower and ED30-Day Warning Report
ID’s unbooked loans for school
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Reconciliation
Monthly basisSchool reconciles internally
Financial aid office/business officeSchool reconciles externally
COD/G5School Account Statement (SAS)Know where the money isCOD Reconciliation Specialists
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Direct Loan Processing Cycle
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School Services Online
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School Services
Slide 33
Default/Delinquency ManagementPre-Repayment Counseling
Calls begin two months prior to repayment
Emails to assist with repayment optionsDelinquency Counseling
Calls begin at 31 days (22 calls) Letters begin at 7 days delinquent (12)
Call campaigns ($80k plus)Late Stage Delinquency
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DL.ed.gov (current servicer)
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Borrower ServicesRepayment options tailored to individual need
Standard, Graduated, & Extended
Income Based Repayment Plan
Income Contingent Repayment Plan*
Alternative Repayment Plan*
Public Service Loan Forgiveness*
*Unique to Direct Loan Program
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Borrower Services
Date due flexibility for all repayment plans
Electronic billing/payments EDA and on-line payment optionsSelf-Service tools for borrowers
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Borrower Services
Repayment incentivesOnline form submission with electronic signatureForbearance/Deferment
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Some Things To Consider…
ITStaffStaff
Staff
FSA Support
StaffStaffIT
IT
Reconciliation
Resources
Tools
Tools
Tools
IT
ITStaff
Staff
Resources
Resources
FSA Support
FSA Support
Reconciliation
Reconciliation
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Some Things To Consider…Commonality with Grants
Same person
Same origination process
Same disbursement process
Same transmission vehicle
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Some things to consider…
Resources/StaffCommonality of awardsSame system (COD)Same institution solution
Work with your software provider to understand the DL process and fields
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Some things to consider…
COD staff resources for assistanceCOD Customer Service
RepresentativesCOD Issue Resolution SpecialistsCOD Reconciliation Specialists
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Questions and Comments
E-mail contact for more information...
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Questions and Comments