Posted Date:October 25, 2013
| Author: | Sue O'Flaherty, Service Director, Program Management, Federal Student Aid |
Subject: Operational Updates and COD System Readiness for Direct Loan Origination Fee Percent Increases
As explained in Dear Colleague Letter (DCL) GEN-13-22 posted on the Information for Financial Aid Professionals (IFAP) Web site, the origination fee for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans (for both parent and graduate student borrowers) will increase as of December 1, 2013. In this announcement we provide some operational updates and information about COD System readiness for processing Direct Loans with the new origination fees.
In DCL GEN-13-22, we included an attachment that provided information about sequestration changes to the Title IV Student Assistance Programs, including the new origination fee percentages and corresponding first disbursement date periods. On October 25, 2013, we corrected the attachment to update some of the end dates of those disbursement date periods.
As of October 18, 2013, the COD System will accept Direct Loan records with the increased origination fee percentages as follows:
For any loan disbursement for a loan where the first disbursement is/will be… | The origination fee percentage for Direct Subsidized and Direct Unsubsidized Loans is… | The origination fee percentage for Direct PLUS Loans is… |
Before 7/1/2013 | 1.0% | 4.0% |
On or after 7/1/2013 and before 12/1/2013 | 1.051% | 4.204% |
On or after 12/1/2013 and before 10/1/2014 | 1.072% | 4.288% |
Loans submitted with a lower origination fee percentage and a first disbursement date on or after December 1, 2013 must be corrected. For instructions on correcting the origination fee percentage, see the attachment titled "Submitting Changes to Origination Fee Percentages and Disbursements."
Loans submitted with the lower origination fee percentages and the appropriate corresponding first disbursement date do not need to be corrected.
Contact Information
If you have questions about this announcement or its attachment, 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@ed.gov.