Posted Date:May 9, 2014
|Author:||Sue O'Flaherty, Service Director, Program Management, Federal Student Aid|
Subject: COD System Operational Notice - COD System Readiness for Direct Loan Origination Fee Percentages Changes
On May 2, 2014, we published Dear Colleague Letter (GEN-14-10) that explains the Fiscal Year 2015 sequester required changes to the Title IV federal student aid programs. GEN-14-10 notes increased origination fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans (for both parent and graduate student borrowers) with a first disbursement on or after October 1, 2014 and before October 1, 2015. In this announcement, we provide operational updates and information about Common Origination and Disbursement (COD) System readiness for processing Direct Loans with the new origination fees.
We have made the necessary COD System changes to be able to process loans with the new origination fees. Schools may begin to send to the COD System Direct Loan records where the first disbursement will be on or after October 1, 2014 using the origination fees noted in GEN-14-10 as soon as their systems allow. With the COD System update –
If a school submits a Direct Loan record with an incorrect origination fee, it will be rejected with COD Reject Edit 140 (Incorrect Origination Fee Percent and/or Interest Rebate Percent on New Awards).
If a school has already submitted (and the COD System has accepted) Direct Loan records with a first disbursement date on or after October 1, 2014 that used the lower origination fees, those records will need to be corrected. For instructions on correcting the origination fees, see the attachment to this electronic announcement titled “Submitting Changes to Origination Fee Percentages and Disbursements.”
Note: The rounding and truncating rules for the COD System have not changed. The COD System will not accept or store penny amounts on Direct Loan awards. COD System business rules for disbursement calculations are found in Volume II, Section 1 of the 2014-2015 COD Technical Reference (beginning on page 99).
If you have questions about this announcement, contact the COD School Relations Center at 800/848-0978 for Direct Loans. You may also e-mailCODSupport@ed.gov.