Bulletin ID
DLB - 93 - 3
| PublicationDate: 9/1/93 BulletinID: DLB - 93 - 3 Direct Loan Bulletin # 3 September 1993 Dear Colleague: This Bulletin presents an overview of the current anticipated functions performed by a school participating electronically as a loan originator in the Federal Direct Student Loan Program (Direct Loan Program). Because many schools will choose to participate by using personal computers or mainframe systems, we want to share information that explains the current developmentof flexible, "user-friendly" software designed specifically to meet their management needs. We will address in more detail the needs of schools using mainframe systems and those not using electronic processing in future bulletins. If you have comments about our proposed development efforts, please let us know. Subsequent Bulletins will also include more detailed information on all aspects of the Direct Loan Program, for example: the Direct Loan PLUS Program; the alternate loan origination process; and the many training and technical assistance activities planned for the program's future. We have been, and will continue to seek input from institutions and other representatives of the higher education community. Your comments are both crucial and appreciated. David A. Longanecker Assistant Secretary for Postsecondary Education FEDERAL DIRECT STUDENT LOAN PROGRAM SCHOOLS AS ORIGINATORS -- AN OVERVIEW A school may participate in the Federal Direct Student Loan Program (Direct Loan Program) by originating loans itself, by participating through a consortium arrangement, or by using an alternate loan originator selected by the Secretary. Schools that originate loans generally must communicate with the loan servicer and the Department's Payment Management System (EDPMS) through electronic media (using mainframes, personal computers or both). This Bulletin provides information on how schools that originate Direct Loans will manage and communicate electronically with the Department of Education's loan servicer and EDPMS. Direct Loan School that is a loan originator: 1. Decides whether a student qualifies to receive a loan 2. Determines the amount of the loan 3. Creates a loan origination record 4. Generates and obtains a signed promissory/ disclosure note from the borrower 5. Requests funds from EDPMS 6. Disburses the loan proceeds to the student 7. Sends the loan origination record and signed promissory note/ disclosure form to the loan servicer 8. Reconciles the school's records with those of the EDPMS and loan servicer EDEXPRESS IS BEING MODIFIED TO SUPPORT SCHOOLS THAT PARTICIPATE IN THE DIRECT LOAN PROGRAM The existing General Electronic Support (GES) network and the EDExpress software are being modified to support the management and communication requirements of the Direct Loan Program. Schools can use all or certain EDExpress software modules to perform Direct Loan functions. Almost all of the software changes involve EDExpress, although the software's structure, standards, and interfaces remain the same. Because we are modifying and expanding an existing product, we are able to develop the software relatively quickly, and will have the first phase of development ready for distribution in January 1994. Software, technical assistance, training, and data transmissions to and from the GES network will be provided free to all participating Direct Loan schools. FEDERAL DIRECT STUDENT LOAN PROGRAM SCHOOLS AS ORIGINATORS -- AN OVERVIEW OF THE ELECTRONIC SUPPORT SOFTWARE In order to perform all of the management and operational functions required of schools participating in the Direct Loan Program, the software will be designed to create a loan origination record and a supporting data base. The software is being designed so that schools may choose to use some or all of its functions. It will allow schools to import files into a personal computer from external sources, such as the school's business office, EDPMS, and loan servicer. In addition, it will allow schools to import internal files from other modules of EDExpress, such as ESARs and data from the newly-developed packaging module. EDExpress will also create files for transmission through the GES to the loan servicer and EDPMS, and will provide an export file format for use by other institutional systems. This software design provides maximum flexibility and allows the school to choose a variety of management reports. Phase 1 of Software Distribution The first distribution of the Direct Loan software modules of EDExpress will allow schools to: - Import data to create a loan record from: - Electronic Student Aid Report (ESAR) and packaging data bases - Other institutional data bases - Data entry from Student Aid Report (SAR) and other sources - Maintain data base (add, modify, delete data) - Create loan record - Print promissory notes - Track promissory notes and loan cancellations - Generate manifests of signed notes to send to servicer - Generate reports and lists - Calculate anticipated disbursements Distribution of this phase will begin by January 15, 1994. Phase 2 of Software Distribution The second distribution includes software that will allow schools to: - Edit and create batches for transmission through GES to the EDPMS and loan servicer (including original loan records, updated loan records, disbursement records, promissory note print requests, and Direct Loan PLUS credit check requests) - Calculate payment drawdown needs - Receive records from the payment system and loan servicer that confirm transmissions or list errors - Reconcile school records with loan servicer records - Maintain historical data base of drawdowns, disbursements, and reconciliations - Accept manual and electronic input of changes to the loan record or transmission to the loan servicer - Export records for external interfaces; import student status and disbursement data - Process and track loan refunds and cancellations - Print reports to track loan history, disbursement information, etc. This phase of the software will be available in early April 1994. Phase 3 of Software Distribution Phase 3 distribution will include all activities related to responding to Student Status Confirmation Reports (SSCR) and will be available for distribution in early July 1994. This software will enable schools to automate much of the SSCR process. It will allow schools to receive SSCRs, store information from the SSCR, and create SSCR records to transmit to the loan servicer. It will also provide for the import and export of data from and to other institutional data bases. THE EDEXPRESS PACKAGING MODULE For the first time, the Department will offer a module that will allow schools to use EDExpress to determine a financial aid package for a student. This module was designed primarily for a school that does not already use an automated packaging system. The software will perform the following functions: - Funds maintenance: establish and maintain a record of information for each fund source offered by the school - Award packaging: allocate funds from a variety of sources to meet all or part of a student's need, based upon student information and an institution specified award methodology - Document tracking: maintain information about documents in students' files, including when the document was requested and when it was received - Reporting: print award letters, document request letters, reports listing packaged students, and two management reports to use when preparing the FISAP - Export: export student information to an ASCII file - Import: import ESAR data from the ESAR data base for use in packaging - Utilities: backup, restore, archive, recover, reorganize, clear, verify, and delete data used in the packaging process In addition, those schools currently using mainframe packaging systems, will be able to export information from their existing packaging systems into the Direct Loan modules and vice versa. This module will be ready for distribution by January 15, 1994 with the first phase of the Direct Loan software. SCHOOLS USING MAINFRAMES TO SUPPORT ALL OR PART OF THEIR DIRECT LOAN ACTIVITIES Participating schools have the option to use their existing mainframe computers to support some or all Direct Loan activities. The Department will provide specifications to those schools that will use a mainframe as soon as they are developed and before they are fully tested. The Department will forward updates as changes are made to these specifications. Hardware/Software Requirements To use EDExpress, schools need an IBM PC or 100 percent IBM compatible PC, with a hard disk and diskette drive. The participating school will also need a local (non-LAN) modem (Hayes-compatible, capable of transmitting at 1200 baud or faster) for transmitting the data through the GES network, and a LAN or local printer for printing promissory notes and/ or management reports. The following are estimates of minimum and maximum hardware and software needs. These estimates were based on a 1,000 record data base. The software can be run on the minimum-specified hardware, although at a slower speed. Larger data bases will need proportionately more disk space and memory. The software will offer a feature so that data may be archived. MINIMUM RECOMMENDED Processor 80386 80486 Expanded memory 4 MB 4 MB Hard disk space 80 MB 80 MB Available conventional memory 512K 512K DOS version 3.3 5.0 or higher |