The Hitchhikers Guide to Direct Loan Processing
description
Transcript of The Hitchhikers Guide to Direct Loan Processing
Brenda D. HicksRMASFAA Financial Aid Odyssey
October 2010
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The GuideI. TerminologyII. Scrubbing the DataIII. Handling RejectsIV. Report OverloadV. Denying the PLUSVI. Closing OutVII. Default
Management
TerminologyCertify (FFEL)
A loan is not a loan until it is “certified” by a lender. When schools sent electronic files to be processed, they were making a request to set up the loan.
Certify (v): To confirm formally as true, accurate or genuine.
OriginateA loan is a loan when
a school says it is a loan. When schools send electronic files to COD to be processed, they are reporting a loan that is already set up.
Originate (v): To bring into being; create.
Scrubbing the DataIs the ISIR transaction you use to report the origination accurate?
Enrollment (Fr, So, Jr)Program (Call a grad a grad)PLUS credit fields/additional unsub.
Rejectre ject (ree-jekt’)tr. v. rejected, rejecting, rejects1)To refuse to accept, submit, believe, or make use of.2)To refuse to consider or grant; deny.3)To refuse to recognize or give affection to (a person).4)To discard as defective or useless; throw away.5)To spit out or vomit.
Rejects: Research and ResolveMore efficient processingAvoid hitting duplicate rejectsBetter cash flowEasier reconciliation
Batch Search: Date Range
60 day range
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COD Technical Reference: Edit/Reject Codes
Timely Processing Set a daily or weekly
schedule for origination reporting and disbursement processing with COD.
Create a log of all file transmissions.
Investigate and resolve all rejected records and discrepancies.
Carefully choose reports to monitor and process.
Set a monthly schedule for reconciliation.
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Monthly Reconciliation Objective
CASH (DRAWDOWNS)
=TOTAL BOOKED DISBURSEMENTS
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Some suggestions….Many hands do NOT make light work for
reconciliation.Consider only reporting the origination of loans
for those students who have completed entrance interviews and MPNs.If not, place holds on accounts for students with
missing promissory notes, andPromptly cancel originated loans with no MPNs and
loan entrancesNotify students immediately when prom notes are
rejected by COD.
Each Day/Week/Month Evaluate:Timing IssuesDirect loan
disbursements/adjustments/rejectionsUnbooked loan recordsUnsent transactionsCash issues (transactions posted and refunds
of cash posted to the wrong academic year)
Drawing Funds from G51. Confirm accepted
records, disbursements and adjustments
2. Request funds that equal accepted and posted disbursements (or carry a negative balance)
3. Maintain a spreadsheet of all pertinent information.
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What Can FAA Do?Check COD screens and review booked
disbursementsCheck COD screens to ensure funds have
been drawn that match booked disbursements
Work SAS report and other reports as necessary.
Update your P&PHow and when are other offices (Accounting,
Business Office, etc.) notified of disbursements & change records?
Who is responsible for reviewing and processing the various reports you decide to use?
Who gets a copy of the monthly SAS report?
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PLUS LoansPracticing your P’s
PLUSPJ
POTENTIAL
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CANNOT Deny PLUS because:Parents are unwilling to borrow one.School has decided to not participate in
PLUS program.Personal belief that parent’s shouldn’t
borrow PLUS.Parent was denied PLUS in previous years.
CAN Deny PLUS because:Parent’s are not US Citizens.Parent is incarcerated.Parent’s whereabouts are unknown.Parent filed for bankruptcy and cannot incur
additional debt as part of agreement.Parent’s income is limited to public
assistance or disability.Parent’s likely inability to repay due to
existing debt burden or expected income-to-debt ratio.
Steps to Professional JudgmentBack up your percentages
Industry standard is 38% (College Board, 2007)
Accredited Credit Counseling AgenciesUse best practices
Online calculatorsConservative numbers
Document. Document. Document.Internal controls to guard against conflict of
interest.
Delinquency ManagementLate Stage Delinquency Assistance (LSDA) involves school personnel reaching out to seriously delinquent borrowers (240+ days), and facilitating the critical contact with the loan servicer to prevent loan default.
Direct Loan School Services: (888) 877-7658
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Direct Loan servicing reports
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DL Information on ifap.ed.govTools for Schools
COD CBTEDExpress WBTDirect Loan/COD Listserve
Direct Loan BulletinsPublications
COD technical referenceBlue Book
Laws and RegulationsCode of Federal Regulations (CFR 685)
LinksDirect Loan web site for ordering publications
Resources Department of Education DL Email List
• Send an e-mail request to David Hebrank ([email protected]) of the Direct Loan Operations team. Include your name and school, complete e-mail address, and a request to be
added to the listserv. Direct Loan Discussion Email List
• Send an e-mail request to [email protected] with the subject line and the body “subscribe dirloan2” (omit quotes)
Common Origination and Disbursement:
www.cod.ed.gov
Direct Loan Servicing:
www.dl.ed.gov
Direct Loan Software and Reference Material:
www.fsadownload.ed.gov
National Direct Student Loan Coalition
www.directstudentloancoalition.org
Questions?
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Brenda HicksDirector of Financial Aid
Southwestern College, [email protected]/620-229-6387