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“ Rational and Irrational Adventures in the Direct Loan Wonderland” Presented by Sherry Proper Director of Financial Aid & Enrollment Support Allegheny College. “Chapter 1 – Down the Uncertain Chasm”.

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Slide1 l.jpg

Rational andIrrational Adventures

in the Direct Loan Wonderland”

Presented by

Sherry Proper

Director of Financial Aid & Enrollment Support

Allegheny College


Chapter 1 down the uncertain chasm l.jpg
“Chapter 1 – Down the Uncertain Chasm”

  • Liquidity injected into FFELP by Government purchasing of loans in 2008-09 & 2009-10

    • Very unlikely to happen for 2010-11

  • July 1, 2010 not that far away

  • Will FFELP $$$ be available?

  • Will lenders remain in FFELP?

  • Is 100% DL participation inevitable?

  • What has your school done to prepare?


Chapter 1 down the uncertain chasm3 l.jpg
“Chapter 1 – Down the Uncertain Chasm”

  • Virtually all the same regulations

  • Use of MPN & entrance counseling

  • Same annual & aggregate loan limits

  • Similar borrower benefits & repayment options

  • Same interest rates except PLUS

    • FFELP PLUS 8.5%

    • DL PLUS 7.9%


Chapter 2 the puddle of tears l.jpg
“Chapter 2 – The Puddle of Tears”

  • It’s a different language in a Parallel World

    • DRI, booked loans, disb sequence numbers, etc.

    • Originate instead of certify

    • Make loans inactive instead of canceling

  • Single source (G5) instead of many sources

  • Required monthly reconciliation

    & year-end closeout

  • Technological changes

  • Processing & procedure changes


Chapter 3 the circle race l.jpg
“Chapter 3 – The Circle Race”

  • Does it feel like we are running in circles?

  • Preparation prior to converting

    • New DL school set up

    • DL implementation steps

    • Software issues

  • Also prepare for the follow-up work

    • How to handle PLUS borrower info

    • Response records, rejects & warnings

    • Reconciliation


Chapter 4 rabbit sends a little help l.jpg
“Chapter 4 – Rabbit Sends a Little Help”

  • Helpful DL Software Considerations

    • Send & receive DL/COD data

    • Determine if you have DL rejects

    • View details about response errors

    • View PLUS borrower information

    • View sequence numbers & COD responses

    • View entrance interview dates

    • Determine the Booked Loan amount

    • Reconciliation reports for DL

    • COD message classes


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“Chapter 5 – Advice from the Caterpillars”

  • Checklist for the Transition to Direct Loans

    • Participation & technology readiness

    • Communication

    • Awarding loans & revisions

    • Originating loans

    • Promissory notes

    • Entrance counseling

    • Disbursement process & delayed disbursements

    • COD reports

    • Obtaining funds


Chapter 6 booked loans pepper l.jpg
“Chapter 6 – Booked Loans & Pepper”

  • Linking MPNs

    • Loan award

    • Active MPN

    • Data elements needed to link loans

  • Booked Loans – COD must receive & accept:

    • Completed/signed MPN

    • Award record

    • Actual disbursement (DRI=true)

    • Key loan data elements

      • Person data

      • Award/disbursement data


Chapter 7 plus mpn mad tea party l.jpg
“Chapter 7 – PLUS MPN Mad Tea Party”

  • Institutional PLUS loan form

    • Advantages

    • Disadvantages

  • New PLUS application website

    • Advantages

    • Disadvantages

  • School-initiated credit check

    • Advantages

    • Disadvantages


Chapter 8 the queen s croquet court l.jpg
“Chapter 8 – The Queen’s Croquet Court”

  • PLUS approvals like chaotic croquet game

  • Approved if no adverse credit

  • Different from the more strict

    criteria in FFELP

  • PJ as an alternative to the credit check

    • SSI income

    • Welfare recipient

    • Active bankruptcy proceedings

    • Other ???


Chapter 9 mock turtle s cod story l.jpg
“Chapter 9 – Mock Turtle’s COD Story”

  • COD at the center of DL processing

  • Common record “data blocks”

    • Disbursement

    • Award

    • Person

    • Entity Information

    • Common Record

  • Batch search, summary, detail

  • MPN search & credit check info

  • Person information

    • Award detail, disbursement history


  • Chapter 10 lobster counseling quadrille l.jpg
    “Chapter 10 – Lobster Counseling Quadrille”

    • New online entrance counseling

    • New online exit counseling

    • Entrance & exit reports available

    • Combination FFELP & DL complications

      • One exit counseling session okay, but

        must provide additional info on other program


    Chapter 11 who stole the tartlets l.jpg
    “Chapter 11 – Who Stole the Tartlets?”

    • Reconcile monthly

      • Where is the money?

      • Internally FA & Business Office

      • Externally with COD

        • Cash, loan summary, loan detail

    • COD screens & reports

    • SAS from COD

    • Software system reports

    • DL Tools software

    • COD reconciliation specialists


    Chapter 12 alice s dl evidence l.jpg
    “Chapter 12 – Alice’s DL Evidence”

    • Evidence indicates things will be okay in the DL Wonderland

      • Solid servicing system

      • Successful school examples

      • Colleagues helping each other

    • DL Info exchange

      • What DL tip/advice can you offer?

      • What DL help do you need?


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