| AwardYear: 1995-1996 ChapterNumber: ChapterTitle: Overview PageNumbers: 1-4 THE DIRECT LOAN SCHOOL GUIDE Overview This School Guide is both a desk reference and a management tool. As a desk reference, it provides you with simple and direct answers to your questions and tells you how to access the many additional resources available to you. Reference information is included on other Direct Loan Program participants so you can contact administrators at similar types of schools to gather information on your implementation strategies. As a management tool, the School Guide explains the Direct Loan Program so you can understand and maximize the many options you have. The School Guide is organized into chapters that address aspects of the Direct Loan Program affecting school functions. Some chapters deal with more than one function, as some tasks are interrelated. Chapter 1: Direct Loan Participation provides a description of general participation and origination criteria. Consortia, considerations for changing the percentage of participation and type of origination, and withdrawal procedures are also discussed. Chapter 2: Electronic Resources describes the electronic support the Department provides, including information on EDE, EDExpress, and the Direct Loan software. Reference telephone numbers are provided. Chapter 3: Information to Borrowers provides both general and specific Direct Loan information and guidance to assist you with disseminating information to Direct Loan borrowers and other students interested in attending your school. Chapter 4: Getting Started: Establishing Direct Loan Eligibility provides information on the student application process, determination of loan amounts, and loan monitoring. The Federal Direct PLUS Loan credit check process is also covered here. Chapter 5: Origination Records and Promissory Notes describes the process for creating these records and transmitting them to the Direct Loan Servicing Center (Servicing Center) for action. How the Direct Loan software can assist in this process and timing considerations are also discussed. Chapter 6: Requesting and Disbursing Funds addresses fund management and describes the procedure and timing for making Direct Loan fund requests for both originating schools and schools under alternative origination. Disbursing funds and reporting disbursements are also included. Chapter 7: Reconciliation provides information on the process of accounting for Direct Loan funds. School actions and Servicing Center responses are described. Chapter 8: Certifying Borrower Enrollment addresses verification of student deferment eligibility and the Student Status Confirmation Report (SSCR) process. Chapter 9: Servicing Center Response and Support covers issues related to originating and servicing activities and problem resolution. Chapter 10: Quality Assurance provides basic information about the Direct Loan Quality Assurance Program. Each chapter follows a similar format. It begins with a list of essential questions related to what is in that chapter. These are questions you and your colleagues may have asked about the Direct Loan Program. Answers to the questions are provided throughout the narrative. Each chapter concludes with implementation issues and/or management tips for the functions described in that chapter. Charts are included to help you visualize the process and to assist you in choosing the best option for creating a simple process and flexible system for your borrowers and school. Records management principles have been incorporated throughout the School Guide, where appropriate, rather than designating a specific chapter on this topic. - A body of reference information is incorporated as appendices at the end of the School Guide. This information includes a listing of Direct Loan regulatory citations and available Department publications. - A Year 2 school directory is being prepared and will be sent to you later. The School Guide also contains the following: - reference contact numbers for the Department including the Servicing Center, the Regional Direct Loan Account Manager staff, the Central Processor, and General Electronic Support - samples of school and borrower forms such as promissory notes, the rights and responsibilities information, and promissory note manifests - samples of Servicing Center communications to borrowers, and - the criteria for how a parent establishes Direct PLUS Loan credit Program Provisions Lets briefly review what the Direct Loan Program is and how it operates. Direct government lending includes the concepts of direct financing, direct delivery, and direct communications. The federal government, rather than financial institutions, provides the loan capital for Direct Loans. Participating schools, acting on behalf of the government, deliver loan funds to student and parent borrowers. Servicing loans and collecting Direct Loan repayments are not the schools responsibility. These activities are handled by the Direct Loan Servicing Center. School Functions. Participating schools perform a variety of functions under the Direct Loan Program. These schools will - determine borrower eligibility and loan amounts - create loan origination records - obtain promissory notes/disclosures - convey records and notes, including corrected loan record data, to the Direct Loan Servicing Center - request (originating schools only) and receive funds - provide entrance counseling - disburse funds - report actual disbursements - account for funds received and disbursed - reconcile funds and loan records, including returning excess cash and processing cancellations or adjustments - certify a borrowers enrollment status (for deferment and Student Status Confirmation Report purposes) As you can see, many of these tasks are required under the Title IV student financial aid programs (including the Federal Family Education Loan Programs), so they are not new to you. The School Guide includes practical information on these functions. |