1 / 17

DL Gotchas

DL Gotchas. Direct Loan conversion tips you might not have considered. Entrance Counseling. You DO NOT need to have your students re-do Entrance Counseling You DO NOT have to use the entrance counseling at www.studentloans.gov

wyman
Download Presentation

DL Gotchas

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. DL Gotchas Direct Loan conversion tips you might not have considered

  2. Entrance Counseling • You DO NOT need to have your students re-do Entrance Counseling • You DO NOT have to use the entrance counseling at www.studentloans.gov • If you’re in a pinch, you can have the student fill out paper entrance counseling

  3. Promissory Notes (MPN) • You DO need to have your students re-do their promissory note • Although you may use a paper MPN, I advise against it: • You will need to prepare and mail the promissory note along with a paper manifest to COD • It can delay disbursement by up to two weeks • Paper promissory notes must be sent to COD and accepted before you are permitted to disburse • Reminders to complete an MPN must come fromyou; this is not something COD will take care of

  4. Expiring MPNs • A signed MPN is valid for 1 year • Once a Direct Loan Disbursement record has been accepted by COD, the MPN is valid for 10 years from the date it was signed • COD sends schools two reports: • MPNs about to expire (MPNPOP) • MPNs that have expired (MPNINAOP) • You may pay out a subsequent disbursement on an expired MPN if the MPN was valid at the time of the first disbursement

  5. Drawing down and Returning Funds • The process is identical to your drawdowns for Pell, ACG, SMART, and TEACH (G5) • Drawdowns are net, not student specific

  6. Planning between FA and Accounting • Sharing disbursement reports • Reconciliation information • Drawdown schedules • Include any relevant state agency (not critical in Ohio, but could be in other states)

  7. Reconciliation • Reports offered by DL Tools • Internal Cash Ending Balance Report • Cash Detail Comparison • Loan Detail Comparison – Loan Level • Disbursement Detail Comparison • Reports from your system • Often these integrate with the data from DL Tools • Monthly reconciliation is critical • Annual reconciliation is easy if you’ve kept up with it monthly

  8. Default Management • Current draft default rates (FY08)* • Overall Stafford: 7.2% • FFEL Stafford: 7.8% • Direct Stafford: 4.9% • Late Stage Delinquency Reports • *Source: Electronic Announcement 2010-5-02 (Loans)

  9. Expanded Loan Forgiveness • Income Contingent Repayment • In some cases, ICR is better than IBR • Public Service Loan Forgiveness • For borrowers employed in a valid public service job, after 120 payments have been made on an eligible Federal Direct Student loan, the remaining balance and interest are forgiven

  10. Focus on the benefits • No more lender lists • You control the process – not the lender • Increased efficiency • Expanded Pell (up to $2500 / year for many students) • No risk of lender leaving the program • No Direct Loans are sold • No risky loan terms • Lower PLUS loan interest rate (7.9%)

  11. Communication! • Student newspapers • Individual e-mails • Campus announcements • FAQ document on your site • Clear link to NSLDS • Don’t forget about PLUS! • Understand what comes from the DL Servicer (this will change depending on the servicer) • When to contact DL Servicer, when tocontact COD

  12. Update ALL university web sites • Admission • Bursar • School credit union • Partner lenders • Including any that might offer a co-branded private loan

  13. National Direct Student Loan Coalition • Mentoring Support • Can help you set up your system • Can share policies and procedures • Provide assistance in understanding and formulating your reconciliation processes • Instruct you in using DL Tools • Speak with your in-house accounting staff about G5 drawdowns and general ledger accounting information • http://www.directstudentloancoalition.org/

  14. National Direct Student Loan Coalition • Mentoring Support (continued) • Share best practices • Provide helpful hints on testing your system • Help you navigate any error messages in testing • Guide you through creating and reviewing special ad hoc reports • Provide vendor contacts if you encounter issues with your software system that the mentor cannot help you resolve • http://www.directstudentloancoalition.org/

  15. National Direct Student Loan Coalition • Strategies for Communication • Sample information for students • Sample letter to parents • Sample letters to campus colleagues • Sample Q&As • Training Materials • http://www.directstudentloancoalition.org/

  16. Final thought… • “DL is not FFEL; when in doubt, think about the Pell process.”  

More Related