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(COD System) Subject: 150% Direct Subsidized Loan Limit: Electronic Announcement #15 - Processing Tips for COD System Edits 204, 205, and 206

Posted Date:October 31, 2014

Author: Sue O'Flaherty, Service Director, Program Management, Federal Student Aid

Subject: 150% Direct Subsidized Loan Limit: Electronic Announcement #15 - Processing Tips for COD System Edits 204, 205, and 206

In the past several weeks, we have identified an increased number of Common Origination and Disbursement (COD) System edits triggered for Direct Loan awards, specifically COD Reject Edits 204, 205, and 206. In this announcement, we provide processing tips and reminders to assist schools in researching and resolving these edits for each impacted award.

COD Reject Edit 204 (Incorrect Program CIP Code Submitted)

Schools should ensure they are reporting valid CIP Codes as found in the National Center for Education Statistics (NCES) 2010 CIP Code list; the full list can be found at http://nces.ed.gov/ipeds/cipcode/Default.aspx?y=55. More information about submitting CIP Codes can be found in Volume II, Section 1 of the COD Technical Reference.

Notes for reporting CIP Codes:

  1. In some cases, the CIP Code a school uses to report to its state organization(s) may not be the same as the CIP Code that must be submitted to the COD System.

  2. Students who have undeclared majors must still have CIP Codes reported to the COD System. CIP Code 24.0102 (General Studies) is an appropriate CIP Code for such a student.

  3. The COD System requires that CIP Code values reported contain the decimal point between the first two digits and the last four digits of the CIP Code, while the National Student Loan Data System (NSLDS) requires that schools report all six digits of the CIP Code without a decimal point.

This edit applies to Direct Loan and TEACH Grant awards only.

COD Reject Edit 205 (Payment Period Start Date is outside the Award Begin and End dates)

Schools should continue to adjust Direct Loan academic year and loan period dates as necessary, and as described in . However, as explained in an August 22, 2014 Electronic Announcement, we are aware that this edit will prevent some adjustments from being accepted. As noted in the announcement, we will modify the edit with the COD System implementation in spring 2015. In the meantime, schools will need to use the workaround processes provided in the announcement.

This edit applies to Direct Loan awards only.

COD Reject Edit 206 (The Remaining Subsidized Eligibility Period is less than zero for this award)

There are a number of factors that could cause this reject to be returned to a school. This reject does not mean that the borrower is ineligible for any Direct Subsidized Loans; rather, it means that the borrower is not eligible for the Direct Subsidized Loan that the school submitted to the COD System. Schools will need to evaluate each award separately, determine if the borrower is still eligible for any Direct Subsidized Loan funds, and then submit a correction if appropriate. As a reminder, the Subsidized Usage Period is generally calculated as the days in the loan period divided by the days in the academic year, but the loan amount and enrollment status also play a role. Schools should follow guidance in for the correct reporting of loan period and academic year dates and then update and resend the rejected award, if necessary. Schools can view a borrower’s Subsidized Usage Period on the Direct Subsidized Loan Usage page on the COD Web site.

Notes for borrowers who have a Remainingte.

Notes for borrowers who have a Remaining

  • If it is permissible for a school to award a loan for less than an academic year, the school can try adjusting the loan period to cover fewer terms/payment periods.

  • Note for schools with programs that use clock hours, do not use terms, or use non-standard terms where each term is not at least nine weeks of instructional time and substantially equal to every other term: Under 34 CFR 685.301(a)(10)(i), a school can only originate a loan for a loan period of less than an academic year in cases where the program or the remaining portion of the program is less than an academic year in length. For such programs, schools may not be able to shorten the loan period to cover a period of less than an academic year for borrowers facing Reject Edit 206 because minimum loan period requirements continue to apply when awarding a Direct Subsidized Loan to a first-time borrower under the 150% limit.

  • The annual loan limit exception creates a Subsidized Usage Period of one year in cases where the borrower receives a Direct Subsidized Loan in the amount of the annual loan limit for a period of less than an academic year. Borrowers who have a Remaining Eligibility Period of less than one year cannot receive a loan in the amount of the annual loan limit, even if the borrower’s need/costs support receiving a loan in this amount for a period of less than an academic year. A school may need to reduce the loan amount if the annual loan limit exception is keeping the borrower from receiving subsidized loan funds for which they are eligible.

  • We recognize that, in some cases, a school may receive this edit due to other Direct Loan award data that is outside the school’s control. As examples:

    1. Another school’s Direct Loan award data may be incorrect. In such cases, the school receiving Reject Edit 206 should contact the prior school and have the prior school correct the award information.

    2. Note: There are cases where this may not be possible, such as a school that is closed. We are reviewing these situations on a case-by-case basis.

    3. Updated prior-year enrollment information is not included in the current subsidized usage calculation, as described in 150% Direct Subsidized Loan Limit Electronic Announcement #3. In some cases, due to timing issues between NSLDS and the COD System, prior-year enrollment information may not be included in the subsidized usage calculation. We are actively working on correcting the data and expect to have corrections completed in December 2014.

  • In some cases, schools are encountering Reject Edit 206 based on Direct Loan award data submitted by another school, but that data may have changed after the initial reject was received. When working to resolve the reject, if a school has an accepted Direct Subsidized Loan for that borrower, the school can review its system-generated responses (particularly the SULA response, CRSU) to determine if an action of another school has changed the borrower’s Subsidized Usage Period on another Direct Subsidized Loan. If a school does not have an accepted Direct Subsidized Loan for that borrower, the school can monitor changes to a borrower’s Subsidized Usage Period on the Direct Subsidized Loan Usage page on the COD Web site.

  • This edit applies to Direct Subsidized Loan awards only.

    Contact Information

    For posted guidance and resources and other frequently asked questions related to 150%, refer to the 150 Percent Direct Subsidized Loan Limit Information page on the Information for Financial Aid Professionals (IFAP) Web site. If you have 150%-related questions, submit them to 150Peubmit them to 150Pen the subject line.

    If you have questions about the COD System edits, contact the COD School Relations Center at 800/848-0978 for Direct Loans. You may also e-mail CODSupport@ed.gov.

    Last Modified: 10/30/2014