Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Contents

AwardYear: 1998-1999
ChapterNumber:
ChapterTitle: Contents
PageNumbers: 1-5

of Contents-1
DIRECT LOAN SCHOOL GUIDE
Contents


OVERVIEW……………………………………………………………. Overview-1

CHAPTER 1: DIRECT LOAN PARTICIPATION …………………………. 1-1
Eligibility Criteria………………………………………………………… 1-1
Payment for Origination Services………………………………………… 1-2
Origination Options …………………………………………………… 1-2
Additional Criteria for Requesting Loans
Under Options 1 and 2 …………………………………………… 1-2
School Origination Options (Chart) ……………………………………… 1-3
Deciding on the Type of Participation……………………………………. 1-3
100 Percent Participation vs. Partial Participation ………….……………. 1-4
Changing Origination Options ……………………………………..……. 1-4
Consortia…………………………………………………………….…… 1-5
Points to Consider in Managing Direct Loans ……………………..…… 1-6
Withdrawal Procedures …………………………………………………. 1-6

CHAPTER 2: ELECTRONIC RESOURCES FOR ORIGINATION
AND RECONCILIATION……………………..……………………………… 2-1
Participation Through Electronic Data Exchange……………………….. 2-1
Implementation………………………………………………………….. 2-2
Technical References and Support………………………….…………… 2-3
Minimum Hardware and Software Requirements……………………….. 2-4

CHAPTER 3: EDUCATION DEPARTMENT RESOURCES
FOR SCHOOLS AND STUDENTS ON THE WORLD WIDE WEB………. 3-1
Information Available to Schools and Students
Via the Web……..………………………………………………………… 3-1
For Students……………………………………………………….. 3-1
For Schools ……………………………………………………….. 3-2

CHAPTER 4: INFORMATION AND COUNSELING FOR …………………………
BORROWERS…………………………………………………………………...…4-1Explaining the Direct Loan Program to Borrowers ……………………… 4-1
Explaining New Terms……………………………………………………. 4-2
Department Publications …………………………………………………. 4-2
Direct Loan Servicing Center Communications………………………….. 4-3
Repayment Plan Information……………………………………………... 4-3
Direct Loan Program Repayment Plans (chart) ………………………….. 4-4
Repayment Periods for Extended or Graduated Plans (chart)……………. 4-5
Entrance and Exit Counseling……………………………………………. 4-5
Entrance Counseling……………………………………………… 4-5
Exit Counseling…………………………………………………… 4-6
Counseling Materials……………………………………………………… 4-6
Exit Counseling Support……………………………………………….. 4-7

CHAPTER 5: ESTABLISHING STUDENT ELIGIBILITY…………………. 5-1
Some Provisions Common to the FFEL Program ………………………… 5-1
Student Eligibility ………………………………………………………… 5-1
Direct Loan Program: Annual Loan Limits (chart)……………………….. 5-3
Annual Loan Limits for Graduate Students………………………………. 5-4
Aggregate Loan Limits………………………………………………….… 5-4
PLUS Eligibility and Loan Limits………………………………………… 5-4
Application Process……………………………………………….. 5-4
Credit Issues………………………………………………………. 5-5
Parent Notification ……………………………………………….. 5-6
School Notification……………………………………………….. 5-6
Applicants with Adverse Credit Histories……………………… 5-7

CHAPTER 6: LOAN ORIGINATION RECORDS AND
PROMISSORY NOTES ………. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ………. 6-1
Essential Records ………….……………………………………………. 6-2
Loan Origination Records…..…………………………………………… 6-2
Creating Loan Origination Records ..…………………………………… 6-3
Required Data Items…………..…………………………………. 6-3
Loan Origination Record Data Items (Chart)....…………6-3
Direct Loan Record Data Items (Chart)………………….6-4
Loan ID …………………………………………………………. 6-5
Sending Loan Records to the Loan Origination Center…………………. 6-5
Loan Origination Center Responses and Actions……………………….. 6-5
Rejected Loan Origination Records ……………………………………. 6-6
Promissory Notes……………………………………………………….. 6-6
Printing Promissory Notes ……………………………………………… 6-6
Promissory Note Address Considerations………………………………. 6-7
Borrower Completion and Return………………………………………. 6-8
Sending Promissory Notes to the Loan Origination Center…………….. 6-8
Loan Origination Center Responses and Actions……………………….. 6-9
Rejected Promissory Notes ……………………………………………… 6-10
Loan Amount Changes (Chart) …………………………………………. 6-11
When to Begin the Loan Process (Option 1 and Option 2 Schools)…….. 6-12
Time Frame Comparison for Promissory Note and Loan Record
Creation………………..………………………………………………… 6-13

CHAPTER 7: RECEIVING AND DISBURSING FUNDS……..…………… 7-1
Maintaining Your Federal Account………………………………...……. 7-2
Loan Fees ………………………………………………………………… 7-2
Requesting Funds: Option 2 Schools ……………………………………. 7-3
Calculating Funding Needs ……………………………………… 7-3
Timing the Requests for Direct Loan Funds …………………….. 7-3
Timeline for Requesting/Receiving Funds (Chart)……….……… 7-4
Requesting Direct Loan Funds (Option 2 School)………………. 7-4
Issues to Consider in Requesting Funds
(Option 2 schools only) ..………………………………………… 7-5
Requesting Funds: Option 1 and Standard Origination Schools ………… 7-7
Funding and Disbursement Timeline (Chart) ……………………. 7-9
Disbursing Funds to Borrowers …………………………………….……. 7-9
The Disbursement Date ………………………………………….. 7-11
Special Direct PLUS Loan Considerations ………………………. 7-11
Options …………………………………………………………… 7-12
Informing Students About Disbursements……………………………….. 7-12
Reporting Disbursements ………………………………………………… 7-13
Borrowers’ Requests for Cancellation or Adjustment……………………. 7-13
Cancellations, Adjustments and Payments ………………………………. 7-14
Cancellation, Adjustment and Payment Provisions (Chart) ……………... 7-15
Excess Cash ……………………………………………………………… 7-16
Excess Cash vs. Payment ………………………………………………... 7-16
Addresses for Returning Funds to the Department …………… 7-17
Loan Origination Center Response and Actions…………………………. 7-17

CHAPTER 8: THE RECONCILIATION PROCESS..……………………… 8-1Reconciliation……………………………………………………………. 8-1
The Direct Loan School Account Statement (DLSAS)………….. 8-1
Cash Summary…………………………………………………… 8-2
The Cash Detail Record………………………………………….. 8-3
The Loan Detail Record…………………………………………. 8-3

CHAPTER 9: CERTIFYING BORROWER ENROLLMENT
STATUS ……………………………….……………………………………….. 9-1
General Information …………………………………………………….. 9-1
School Requirements ……………………………………………….…… 9-1
Scheduling SSCR Cycles………………………………………………… 9-2
Guidelines………………………………………………………… 9-2
Recommendations ……………………………………………….. 9-2
Recommended SSCR Cycle Dates (Chart)……………………….. 9-3
Processing Cycle…………………………………………………………. 9-3
The SSCR User’s Guide and Customer Support………………………… 9-5

The Remainder of this chapter does not apply to schools
using EDESSCR Roster File………………………………………………………… 9-6
Matching Student Data…….…………………………………………….. 9-6
Reading and Updating the SSCR File…………………………………… 9-7
Student Identifiers ………………………………………………………. 9-7
Enrollment Status Review……………………………………………….. 9-7
Address Update…………………………………………………………… 9-7
Adding Students…………………….……………………………………. 9-8
Sending the SSCR Submittal File…..……………………………………. 9-8
Error Notification and Correction ………………………………………... 9-8

CHAPTER 10: DIRECT LOAN SERVICING CENTER
RESPONSE AND SUPPORT…….…………………………………………….. 10-1General Information………………………………………………………. 10-1
Loan Servicing Center Activities…………………………………………. 10-1
Borrower Service Features ……………………………………………….. 10-2
Addresses and Toll-Free Number………………………………….10-3
Standard Communications ……………………………………………….. 10-3
Loan Issuance Notification……………………………………………….. 10-3
Deferment and Forbearance Assistance………………………………….. 10-4
Deferments……………………………………………………….. 10-5
Forbearance………………………………………………………. 10-5
Account Servicing Statements…………………………………………… 10-6
Quarterly Interest Statements…….………………………………. 10-6
Annual Statements ………………………………………………. 10-6
Billing Statements………………………………………………... 10-7
School Services ………………………………………………………….. 10-7
Problem Resolution………………………………………………… ……. 10-7

CHAPTER 11: QUALITY ASSURANCE…………………………………….. 11-1
General Information ……………………………………………………… 11-1
Management Worksheets…………………………………………………. 11-3
Progress Reports………………………………………………………….. 11-4
Points to Consider in Managing Direct Loans …………………………… 11-4

APPENDICES…………………………………………………………… Appendix ADirect PLUS Loan Application and Promissory Note………… Appendix A
Direct PLUS Loan Endorser Application…………………………. Appendix B
Direct Stafford/Ford Loan Promissory Note and
Disclosure …..……………………………………………………. Appendix C
Account Statement………………………………………………… Appendix D
Billing Communications………………………………………….. Appendix E
Quarterly Unsubsidized Interest Statement……………………….Appendix F
Welcome Letters………………………………………………….. Appendix G
Forbearance Letters……………………………………………….. Appendix H
Deferment Letters…………………………………………………. Appendix I
Death/Total and Permanent Disability Letters……………………Appendix J
Electronic Debit Account Letters…………………………………. Appendix K
Returned Check Letters…………………………………………… Appendix L
Income Contingent Repayment Plan Letters…………………… Appendix M
Clearing Bad Credit Letters ………………………………………. Appendix N
Promissory Note Fraud Letters …………………………………… Appendix O
Bankruptcy Letters………………………………………………… Appendix P
Interest Letters. ……………………………………………………. Appendix Q
Repayment Plan Letters……………………………………………. Appendix R
Payment History Letters…………………………………………… Appendix S
Payment Due Date Letters…………………………………………. Appendix T
Payment Discrepancy Letters…………………………………… Appendix U
Miscellaneous Letters……………………………………….…….. Appendix V
Help Listing……………………………………………….………. Appendix W
Direct Loan Program Regulations Listing………………….…….. Appendix X
Direct Loan Core Publications…………………………………….. Appendix Y
Direct Loan Quality Assurance Guide…………………………….. Appendix Z