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(COD System) Subject: Additional COD System Implementation for 2010-2011 Award Year

Posted Date:June 24, 2010

Author: William Leith, Service Director, Program Management, Federal Student Aid

Subject: Additional COD System Implementation for 2010-2011 Award Year

As explained in a March 2010 Electronic Announcement on the Information for Financial Aid Professionals (IFAP) Web site, we implemented Common Origination and Disbursement (COD) System functionality to support 2010-2011 Award Year processing. During the period June 25-26, 2010, we plan to implement additional COD System functionality for the 2010-2011 Award Year.

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

  • Future Guidance
  • COD Batch Processing Suspension and Web Site Outage Information
  • COD System Processing Function Enhancements and Modifications Effective June 26, 2010
  • Contact Information

We appreciate your patience and understanding as we complete this important activity.

Future Guidance

This implementation will not include functionality needed to support Iraq and Afghanistan Service Grants for children of deceased members of the military who are not Pell-eligible. Iraq and Afghanistan Service Grants are effective with the 2010-2011 Award Year. We plan to implement COD System functionality for these grants in October 2010.

We will communicate the details about future system implementations, as well as all necessary operational implementation guidance, through Electronic Announcements on the IFAP Web site.

COD Batch Processing Suspension and Web Site Outage Information

In order to install the additional COD System functionality—

  • We will suspend COD batch processing beginning at 2:00 P.M. (ET) on Friday, June 25, 2010. Records submitted after this time will be held and processed after 8:00 P.M. (ET) on Saturday, June 26, 2010.
    Note: All actual disbursements with a disbursement date from June 25, 2010 through June 26, 2010 must be received by the COD System no later than 9:00 AM (ET) on Friday, June 25, 2010, and subsequently accepted by the COD System, in order for them to be included in the drawdown prior to the outage. Disbursements submitted by the deadline but not subsequently accepted, disbursements submitted after the deadline, and disbursements with a disbursement date after June 26, 2010 will be processed and funded after the outage.
  • Users will not be able to submit or retrieve data via the COD Web site between 2:00 P.M. (ET) on Friday, June 25, 2010 and 8:00 P.M. (ET) on Saturday, June 26, 2010.
  • Users will not be able to access the COD Reports area of the COD Web site between 2:00 P.M. (ET) on Friday, June 25, 2010 and 8:00 P.M. (ET) on Saturday, June 26, 2010.
  • An individual will not be able to complete online Direct Loan Entrance Counseling, complete a new Master Promissory Note (MPN) electronically, complete a Direct PLUS Loan Request electronically, or endorse a Direct PLUS Loan electronically via the StudentLoans.gov Web site between 2:00 P.M. (ET) on Friday, June 25, 2010 and 8:00 P.M. (ET) on Saturday, June 26, 2010.
  • An individual will not be able to complete TEACH Grant Initial and Subsequent Counseling, complete a new TEACH Grant Agreement to Serve (ATS), or retrieve an existing ATS via the TEACH Grant Web site between 2:00 P.M. (ET) on Friday, June 25, 2010 and 8:00 P.M. (ET) on Saturday, June 26, 2010.

Note Regarding COD School Relations Center on June 25, 2010: The COD School Relations Center will be open from 8:00 A.M. until 8:00 P.M. (ET) on Friday, June 25, 2010. However, due to the COD System and Web site outages, customer service representatives will be limited in the assistance they will be able to provide on that day. We apologize for this inconvenience and appreciate your understanding.

Note: The COD System will undergo extended routine maintenance on Sunday, June 27, 2010 from 12:00 A.M. until 1:30 P.M. (ET). During this period, batch processing and Web site availability will again be impacted. Please refer to the "COD Processing Update" posted on the COD Web site for an explanation of this activity.

COD System Processing Function Enhancements and Modifications Effective June 26, 2010

The following changes will impact COD System processing of Direct Subsidized Loan, Direct Unsubsidized Loan, and Direct PLUS Loan awards. Additional information about these changes will be added to the 2010-2011 COD Technical Reference with the next scheduled update later this month.

Electronic Correspondence for Direct Loan Closeout

Beginning June 26, 2010, instead of mailing a paper letter, the Common Origination and Disbursement (COD) System will send a school the following Direct Loan Closeout correspondence electronically via e-mail:

  • Change in Zero Balance Letter
  • Notification Warning Letter
  • Program Year Closeout Letter
  • Negative Balance Warning Letter
  • Re-Open Extended Processing Letter
  • Re-Open Letter

The e-mail will be sent to the school’s Financial Aid Administrator and, in some cases, the school’s President. The body of the e-mail will include the full text of letter. In the case of the Program Year Closeout Letter, it will be attached to the e-mail as a PDF file. A school will also be able to access a copy of all of the letters via the COD Web site.

If no e-mail address is on file, the COD System will continue to mail a paper letter to the school.

30-Day Period for Continued Exemption from Multiple Disbursement Requirement After Increase in Cohort Default Rate

Under current regulations, a school with an official cohort default rate that is less than a specified percentage may disburse single-term loans in a single installment. If a school is notified that its official cohort default rate equals or exceeds the specified percentage, this exemption from the multiple disbursement requirement no longer applies to loans originated by the school beginning 30 days after the school receives notification of the increased default rate.

Previously, the COD System did not allow a school to continue disbursing loans in a single installment after the date the school is notified that it no longer qualifies for the exemption from the multiple disbursement requirement. Beginning June 26, 2010, the COD System will allow the school to remain exempt from the multiple disbursement requirement for loans that are originated within the 30-day period described above. COD Reject Edit 60 (Insufficient Number of Disbursements Based on School Type) will be modified to allow for this.

Citizenship Status Code Processing for Direct Subsidized Awards and Direct Unsubsidized Awards

Beginning June 26, 2010, the COD System will be updated to apply more consistent edit logic for the Citizenship Status Code for Direct Subsidized Loan awards and Direct Unsubsidized Loan awards. The Citizenship Status Code will be evaluated in the same manner as it is done for all the grant programs.

If the Citme manner as it is done for all the grant programs.

If the Cition records, the COD System will now evaluate the values from the Central Processing System (CPS) Abbreviated Applicant File (AAF). The COD System will evaluate the value in the Social Security Administration (SSA) Citizenship Flag field, and if necessary, the DHS Match Flag field and the Secondary DHS Match Flag field.

If the Citizenship Status Code field is not populated on the incoming origination record, but the citizenship status can be determined from the CPS AAF, the COD System will use it to accept and build the award. Note: If the citizenship status is determined by using the CPS AAF, it will be stored on the COD System, but will not be returned on the Common Record response.

If the Citizenship Status Code field is not populated on the incoming origination record, and the citizenship status cannot be determined from the CPS AAF, the COD System will reject the award.

Note: The Citizenship Status Code field is required for all Direct PLUS Loan awards. The Citizenship Status Code field is optional for all other awards as long as the citizenship status can be verified by the matches performed in the Central Processing System (CPS). If the Citizenship Status Code is not populated, and the student’s citizenship status cannot be verified as part of the Social Security Administration (SSA) match, or the DHS primary or secondary match (for example, they have a C-flag), the COD System will reject the award. However, if a school has documentation in its files to support the student’s eligible citizenship status, it must send the valid Citizenship Status Code field to the COD System for these students.

Direct Loan Award Processing for Foreign Schools

Schools located outside the United States (commonly referred to as foreign schools), which have been processing Federal Family Education Loan (FFEL) Program loans for eligible students and parents from the United States (U.S.) to date, will begin processing William D. Ford Federal Direct Loan (Direct Loan) Program loans for eligible U.S. students and parents on July 1, 2010.

Many foreign schools will use functionality within the COD System to process their Direct Loan awards. A series of high-level overviews about Direct Loan award processing for foreign schools is posted in the Foreign School Direct Loan Processing area of the Foreign School Information Web page.

MPN and Agreement to Serve Searches by Name and by Name and Date of Birth Removed

Note: This change impacts both the Direct Loan Program as well as the Teacher Education Assistance for College and Higher Education Grant (TEACH Grant) Program.

As part of our ongoing efforts to protect borrowers’ Personally Identifiable Information (PII) data from unauthorized access, we will enhance COD System security with changes to our search functionality. Beginning June 26, 2010, the COD Web site's Promissory Note/Agreement to Serve Search page will be modified. The Name search (for linked MPNs or TEACH Grant Agreements to Serve) and the Name and Date of Birth search (for unlinked MPNs or TEACH Grant Agreements to Serve) will be removed. A school can still search by SSN, MPN/ATS ID, or date range.

Contact Information

If you have questions about this announcement, contact the COD School Relations Center at 800/474-7268 for Grants or 800/848-0978 for Direct Loans. You may also e-mail CODSupport@acs-inc.com.