| AwardYear: 1997-1998 ChapterNumber: ChapterTitle: Overview PageNumbers: 1-4 This School Guide gives you simple answers to your questions about how to administer the William D. Ford Federal Direct Loan Program (Direct Loans) and describes how to access the additional resources available to you. It 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 describes general participation and origination criteria. Consortia, considerations for determining the percentage of participation, 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 and Counseling for Borrowers provides information and guidance to assist you in 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. Chapter 5: Origination Records and Promissory Notes explains the process for creating these records and documents and transmitting them to the Direct Loan Origination Center (LOC) for action. The timing for submitting these items and the assistance the Direct Loan software can provide are also discussed. Chapter 6: Receiving and Disbursing Funds describes the procedures and timing for making Direct Loan fund requests for Option 1, Option 2, and Standard Origination schools. Disbursing funds and reporting disbursements are also included. Chapter 7: Cash Management and Data Matching (Reconciliation) covers the process of accounting for Direct Loan funds. School actions and Loan Origination Center responses are described. Chapter 8: Certifying Borrower Enrollment briefly discusses the Student Status Confirmation Report (SSCR) process. Specifically, school requirements, scheduling SSCR cycles and the various stages of the SSCR processing cycle are included. Chapter 9: Direct Loan Servicing Center Response and Support covers issues related to servicing activities and problem resolution. Chapter 10: Quality Assurance provides basic information about the Direct Loan Quality Assurance Program. Each chapter begins with a list of essential questions related to the chapters contents. These are questions you and your colleagues may have asked about the Direct Loan Program. Answers to the questions are provided throughout the narrative. Charts are included to help you visualize procedures and choose the best option for creating a simple process and a 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 sample list of Direct Loan regulatory citations and available Department publications. The School Guide also contains the following: - reference contact numbers for the Department and its contractors including the Direct Loan Task Force, the Regional Direct Loan Client Account Management staffs, the Direct Loan Servicing Centers, the Direct Loan Origination Center, the Central Processing System, and Title IV Wide Area Network - samples of school and borrower forms such as promissory notes, borrowers rights and information, and promissory note manifests - samples of Servicing Center communications to borrowers - samples of Loan Origination Center communications to schools Program Provisions Direct 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. Schools do not service or collect Direct Loan repayments; the Direct Loan Servicing Center handles these functions. School Functions Participating schools perform a variety of functions under the Direct Loan Program: -determine borrower eligibility and loan amounts - create loan origination records -provide required entrance to first-time borrowers - obtain signed promissory notes from borrowers (Option 1 and 2 schools only) - send loan origination records to the Loan Origination Center - send signed promissory notes to the Loan Origination Center (Option 1 and 2 schools only) - request Direct Loan funds (Option 2 schools only) - receive Direct Loan funds from ED - certify borrowers enrollment status - disburse loans to eligible borrowers - report disbursements to the Loan Origination Center -reconcile both loan funds and loan records - return excess cash - provide required exit counseling to borrowers - implement a quality assurance system, as established by ED Many of these tasks should be familiar to you because they are required under the Title IV student financial aid programs (including the Federal Family Education Loan [FFEL] Program). The School Guide includes practical information on handling these functions. |