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Summary: HERA Operational Implementation Guidance (CPS, COD System, and EDExpress Suite) -- Implementation of HERA-Related Additional COD System Functionality

Publication Date: July 18, 2006

Author: G. Kay Jacks, General Manager, Application, Operations and Delivery Services, Federal Student Aid

Summary: HERA Operational Implementation Guidance (CPS, COD System, and EDExpress Suite) -- Implementation of HERA-Related Additional COD System Functionality

Posted on 07-18-2006

As we have explained through a number of Electronic Announcements posted on the Information for Financial Aid Professionals (IFAP) Web site, we are implementing Common Origination and Disbursement (COD) System functionality required to implement the provisions of the Higher Education Reconciliation Act of 2005 (the HERA), Pub. L. 109-171, through a series of releases between July 1, 2006 and December 16, 2006. This announcement provides information about the second release.

During the period July 28-29, 2006, we will implement additional HERA-related COD System functionality that supports the processing of Initial Authorizations for the Academic Competitiveness Grant (ACG) and National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) programs. We will also implement William D. Ford Federal Direct Loan (Direct Loan) Program correspondence updates. We appreciate your patience and understanding as we complete this important activity.

In this announcement, we provide the following information related to the implementation:

•COD Batch Processing Suspension & Web Site Outage Information
•COD System Processing Function Enhancements and Modifications
•Contact Information

COD Batch Processing Suspension and Web Site Outage Information

In order to install the HERA-related system changes--

•We will suspend COD batch processing beginning at 8:00 P.M. (ET) on Friday, July 28, 2006. Records submitted after 8:00 P.M. (ET) will be held and processed after 8:00 A.M. (ET) on Saturday, July 29, 2006.

•The COD Web site will be unavailable from 8:00 P.M. (ET) on Friday, July 28, 2006 until 8:00 A.M. (ET) on Saturday, July 29, 2006.

Additionally, for Direct Loan participants--

•The Direct Loan Electronic Master Promissory Note (MPN) Web site will be unavailable from 8:00 P.M. (ET) on Friday, July 28, 2006 until 8:00 A.M. (ET) on Saturday, July 29, 2006.

Individuals starting the process by 7:00 P.M. (ET) on July 28th will be able to complete their MPNs before the Web site becomes unavailable. Individuals attempting to access the Web site after the cutoff time will see a Web site maintenance message and will not be able to start the process or retrieve an existing MPN.

•The Direct Loan Electronic MPN Web site is unavailable every Sunday morning from 5:00 A.M. until 11:00 A.M. (ET) while routine maintenance is performed. As such, the Direct Loan Electronic MPN Web site will again be unavailable from 5:00 A.M. until 11:00 A.M. (ET) on Sunday, July 30, 2006. As previously noted, individuals will not be able to complete or retrieve MPNs during this period.

COD System Processing Function Enhancements and Modifications

ACG and National SMART Grant Initial Authorizations

The Electronic Announcement posted on June 30, 2006 provided complete information about the new ACG and National SMART Grant programs. As explained in the announcement, during the period July 29-August 1, 2006, we will begin processing ACG and National SMART Grant Initial Authorizations for the 2006-2007 Award Year.

•The calculation of Initial Authorization, known in the COD System as Current Funding Level (CFL), amounts is based on the following four considerations:

o Number of 2005-2006 Federal Pell Grant (Pell Grant) accepted and posted disbursements

o Available funding from appropriations for ACG and National SMART Grant programs

o Whether or not a school has at least one 2- or 4-year degree program (School program length in the COD System is: 5, 6, 7, or 8 for ACG or 6, 7, or 8 for National SMART Grant)

o School funding method

Because ACG and National SMART Grant are new programs, we do not yet have information that would enable us to target funds to schools based on prior history of ACG/National SMART Grant recipients. For this reason, we have made calculations based on the proportional volume of 2005-2006 Pell Grant recipients at 2- and 4-year degree-granting schools and the limited amount of funds that have been appropriated for these programs. In some instances, this has resulted in amounts that are less than a full award in either ACG or National SMART Grant, and, therefore, these schools will not receive an Initial CFL. If a school does not initially receive funding but has identified eligible disbursements between the first week in August 2006 and December 16, 2006, a request for funding can be made as described below.

In addition to schools not qualifying for an Initial CFL based on projected low volume, schools on the Reimbursement funding method or the Cash Monitoring funding method under 34 CFR 668.162(e)(2), that is, Heightened Cash Monitoring 2 (HCM2), also will not receive an Initial CFL. In a separate communication, we will inform a school that is eligible to process ACG and/or National SMART Grant awards and that receives funds under the Reimbursement or HCM2 funding method how we will handle its funding.

•A school that meets the criteria will receive a separate 2006-2007 Initial CFL for each of the two grant programs. We anticipate that each Initial CFL will be sufficient for a school to disburse ACG or National SMART Grant funds until the school can submit disbursement records to the COD System beginning December 16, 2006.

•We will inform schools after we process the Initial CFLs via an Electronic Announcement on the IFAP Web site, the "COD Processing Update," and a COD Web Message.

•We will generate and send an Electronic Statement of Account (ESOA) that lists the amount of a school's Initial CFL for each new grant program for the 2006-2007 Award Year.

o We will send the ESOA for the ACG Program to the school's SAIG mailbox in the message class AGAS07OP.

o We will send the ESOA for the National SMART Grant Program to the school's SAIG mailbox in the message class SGAS07OP.

•A school will be able to view its Initial CFLs on the Funding Information screen on the COD Web site.

•Beginning the first week of August 2006, a school will be able to draw down funds for ACG and/or National SMART Grant awards, as applicable, via the Grant Administration and Payment System (GAPS). The school must draw down and disburse ACG and National SMART Grant funds in accordance with the cash management regulations in 34 CFR 668 Subpart K.

o The GAPS Award Number for ACG will be P375A06xxxx

o The GAPS Award Number for National Smart Grant will be P376S06xxxx.

Note: The "xxxx" will be populated with a school's GAPS award sequence number that currently exists for the Pell Grant and Direct Loan programs.

•The earliest date on which a school may disburse an ACG or National SMART Grant for the 2006-2007 Award Year, either with Federal funds or its own funds, is July 1, 2006.

•As explained in the June 30th announcement, beginning December 16, 2006, the COD System will accept actual disbursements for 2006-2007 ACG and National SMART Grant awards that schools will submit using new COD XML Common Record blocks or via the Web. As noted above, the disbursement date must be July 1, 2006 or later.

Note: The 2006-2007 COD Technical Reference will reflect all ACG and National SMART Grant implementation information upon posting of the last installment of HERA-related technical reference updates in late July 2006. We will post the technical reference updates to the IFAP Web site and announce the availability of the updates in the "COD Processing Update" and via a COD Web Message.

•If a school needs additional ACG or National SMART Grant funding between the first week in August 2006 and December 16, 2006, it can request a funding increase via e-mail to the COD School Relations Center at CODSupport@acs-inc.com.

Note: A school that uses the Reimbursement or HCM2 funding method will not qualify for funding using this e-mail process.

o The school must include "ACG (SMART) Authorization Increase Request" in the subject line of the e-mail.

o The school must include the following information in the body of the e-mail:

1. School's name, contact person and telephone number, Pell ID, and GAPS award sequence number (if known)

2. Total amount of additional funding needed to fund disbursements for students who qualify for ACG and/or National SMART Grant awards

The COD School Relations Center will verify that the school is eligible and then submit the request to Federal Student Aid staff for action. If we approve the request, the school will receive a new ESOA that reflects the funding increase.

•In some cases, more than 30 days will elapse between the date a school disburses ACG or National SMART Grant funds and the date the school submits a record of that disbursement to the COD System.

We will consider the school to be in compliance with the 30-day disbursement-reporting requirement and suspend related e-mail notifications regarding ACG and National SMART Grant awards until January 17, 2007.

Note: During the period July 1, 2006 - January 17, 2007, we will continue to monitor disbursement-reporting compliance for Pell Grant and Direct Loan awards.

•In mid to late April 2007, we will reduce a school's ACG and/or National SMART Grant CFL for the 2006-2007 Award Year if it is greater than the school's NAPD for the applicable program. By this time, we expect that the majority of ACG and National SMART Grant funds for the 2006-2007 Award Year should have been disbursed to students and submitted to the COD System for processing. We will inform schools prior to performing this reduction through our standard communication vehicles.

Direct Loan Correspondence Updates

The Electronic Announcement posted on May 19, 2006 announced and provided addenda that are to be used with the Federal Direct Subsidized Loan/Unsubsidized Loan MPN (Subsidized/Unsubsidized MPN) and Federal Direct PLUS Loan Application and Master Promissory Note (PLUS MPN). As explained in the announcement, until we develop revised MPNs that incorporate the changes to loan terms and conditions made by the HERA, the applicable addendum must be used with the existing Subsidized/Unsubsidized MPN and PLUS MPN to inform borrowers of the changes. On July 1, 2006, we began including a paper addendum in paper Subsidized/Unsubsidized MPN packages and PLUS MPN packages for parent PLUS borrowers.

•Beginning July 29, 2006, we will include updated cover letters in paper MPN packages that we mail to borrowers or schools. The updated paper MPN package cover letters will refer to the applicable addendum included in the MPN package.

Note: We will mail paper PLUS MPN packages for Grad PLUS borrowers to borrowers or schools beginning August 12, 2006.

The Electronic Announcement posted on June 23, 2006 provided complete information about the new availability of Federal Direct PLUS Loans (Direct PLUS Loans) for eligible graduate or professional student PLUS borrowers (Grad PLUS borrowers).On July 1, 2006, we began PLUS MPN processing for Grad PLUS borrowers.

•Beginning July 29, 2006, we will generate and mail updated Direct PLUS Loan letters that are mailed alone or as a cover letter in a correspondence package. The updated Direct PLUS Loan letters will generically refer to Direct PLUS Loan borrowers that now include both parents and graduate and professional students.

Contact Information

If you have any questions about this announcement, contact the COD School Relations Center at 800/4PGRANT for ACG, National SMART Grant, and Pell Grant or 800/848-0978 for Direct Loan. You may also e-mail CODSupport@acs-inc.com.

Last Modified: 07/17/2006