January 2004

DLB-04-03

Subject: Processing of Paper and Electronic Master Promissory Notes

Dear Partner:

In response to feedback we received from schools at the 2003 Electronic Access Conferences, we are providing some questions and answers about the processing of electronic and paper Master Promissory Notes (MPNs). We hope this information will help make MPN processing a more efficient practice.

All paper MPNs for COD are processed in Montgomery, AL. There are two separate mailing addresses, depending on how you choose to send the MPNs. Please use the correct address to ensure a timely receipt of the manifests by the processing center.

What happens to the MPNs upon receipt?
After you send your MPNs and they are received at the processing center, we start two processes: reviewing the shipping manifest and imaging the MPNs. All paper MPNs eligible for processing are scanned into our imaging system within three business days of receipt. Once the MPNs are successfully imaged, the manifest is separated from the MPNs, batched, imaged, verified, and returned to the school. During peak processing, reviewing the manifest can take up to ten business days.

What happens if an error is found?
We verify the data to ensure that the MPN was successfully imaged when it is transferred to COD. MPN processing takes priority over the manifest. Thus, if we find an error with an imaged MPN, such as a miskey or an error on the MPN itself, the manifest processing is put on hold until the problem is resolved. When an error is identified, we pull only the affected MPN from the batch and re-process it. The remainder of the batch is considered verified and is released.

What should be done to reduce the number of processing errors?
In order for a MPN to link to an award, data from the MPN must match the same data in the borrower record (SSN, the borrower's date of birth, and the first two characters of the borrower's first name). Both COD and schools can help make sure this data matches.

COD uses a double data entry and verification process to minimize data entry errors. The double data entry process allows us to validate the data from the MPN twice before the data is released for linking to an award. As a result, we have reduced the miskey error rate to .08% of all MPNs keyed.

In cases where any of this data is legally altered on the MPN, but the altered data does not match the borrower record, the MPN will not link to the award. You can prevent errors by ensuring that altered data on the MPN is researched and verified against the award data in COD prior to submitting the MPN for processing. Hand-written data on MPNs also increases error rates. To ensure that hand-written MPNs are processed correctly, please make certain that hand-written data on the MPN is legible.

If a paper MPN cannot be processed due to invalid alteration, it will be returned to you for correction or a new MPN. The shipping manifest is annotated to reflect the reason it was returned to you. Some reasons for return may include: no signature or missing shipping manifest. You will receive any returned notes before receiving the original shipping manifest.

How does MPN information get into COD?
During the imaging process of the paper MPNs, certain key data elements (SSN, Name, DOB) are gathered into an electronic data file. This file is transmitted along with e-MPN data to COD in a real-time method. COD uses the data elements to successfully link the MPN to an eligible award and sends a MPN acknowledgment to you via your SAIG mailbox.

When can I check the status of a MPN?
For paper notes, you do not have to wait until you receive the manifest back before you can check the status of a MPN in COD. Once a MPN is successfully imaged, the data is sent to COD. However, COD recommends that you allow sufficient time for paper MPNs to reach the processing center and an additional three days for the processing of the MPN before checking on the status of a paper MPN on the COD web site, www.cod.ed.gov.

Electronic MPN information is updated in COD throughout the day. When an applicant advises you that they successfully completed an e-MPN, you can verify that the application process was successful on the web site, www.lo-online.ed.gov. To do this, select "MPN Review" and enter the applicant's SSN and date of birth. If the e-MPN process was successful and you did not receive an acknowledgement, please contact COD School Relations Center for assistance.

What if I can't find a MPN?
When COD is notified that a MPN is misplaced, has not linked to an award, or that you did not receive a MPN acknowledgement, we initiate a review process to determine the root cause of the issue. A key step in this process is tracing the receipt and routing of the package via the container tracking number (if you ship paper MPNs via a courier service or registered receipt method, the shipping container number is linked to the package contents throughout the processing cycle of the MPNs). We also review the data in COD and Imaging systems. Finally, we conduct a physical search for the MPN in the storage vault. To assist in this search, we usually ask you to provide the shipping container tracking number, the date on which the container was signed, the weight of the container, and a copy of the shipping manifest.

If you have any questions regarding the MPN process, please contact the COD School Relations Center at 800/848-0978 or e-mail CODSupport@acs-inc.com. Thank you for your support of the COD System and your ongoing partnership in the Direct Loan Program.

Sincerely,

Jane Holman
Acting Director, Title IV Delivery
Schools Channel