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(Direct Loans) Subject: Supplemental Information about Direct PLUS Loan Endorser Processing

Posted Date:September 23, 2010

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

Subject: Supplemental Information about Direct PLUS Loan Endorser Processing

In an April 23, 2010 Electronic Announcement posted on the Information for Financial Aid Professionals (IFAP) Web site, we provided operational guidance about Direct PLUS Loan award processing, including cases when the Direct PLUS Loan award has an endorser. This announcement supplements the April guidance with additional information related to processing Direct PLUS Loan awards with an approved endorser.

Note: This announcement provides general guidance on the information that is sent to schools by the Common Origination and Disbursement (COD) System when there is an approved endorser for a Direct PLUS Loan. However, this guidance may not apply to every situation at every school, since individual schools may have their own procedures for processing Direct PLUS Loan awards and working with endorsers, and there are also differences in the third-party software products used by some schools to process Direct Loan awards.

Changes to Endorser Processing

Prior to March 27, 2010, when an endorser was approved for a Direct PLUS Loan award, the COD System sent a Credit Override (CO) response file to a school with a credit override code of "E" for endorser regardless of whether the endorsed amount was less than or equal to the original loan amount (it could not be greater than the original loan amount). The COD System would then accept disbursement records up to the endorsed amount.

Since March 27, 2010, when an endorser is approved for a Direct PLUS Loan award, the COD System returns different information depending on a number of factors. In an attachment to this announcement, we provide several general endorser scenarios and explain how they would be processed.

We hope this announcement and its attachment help to clarify current endorser processing. We are developing a number of changes to improve the endorser process in the near future, including a solution planned for February 2011 to eliminate the dual meaning of "D" in the credit override code tag. We will provide information about any future changes in forthcoming communications posted on the IFAP Web site.

Contact Information

If you have questions about this announcement and its attachment, contact the COD School Relations Center at 800/848-0978. You may also e-mail CODSupport@acs-inc.com.

Attachments/Enclosures:

Last Modified: 09/22/2010