Direct Lending PHEAA’s FAS Solution Presented by: Jan Napiltonia, AVP Financial Aid Services

1. Direct Lending PHEAA’s FAS Solution Presented by: Jan Napiltonia, AVP Financial Aid Services

2. Agenda • Stakeholders • Key Concepts • Loan Processing • Creating Origination & Disbursements • Sending O & D on FAS • Adjusting a Disbursement on FAS • Loan Funding • COD Options • Reconciliation • Reports

3. Key Stakeholders School • Determines eligibility • Originates and Disburses Loans (Certifies) • Confirms • Entrance counseling • MPN completion • Sends student notification of disbursement • Exit counseling • Disclosure statements • Reports enrollment status • Default prevention

4. Key Stakeholders USDE • Funding • G5 • Release of funds • Return of funds • Manages all aspects of loan processing • Approves/Denies • Reporting and reconciliation tools • At the schools discretion provides facility for: • Electronic MPN • Entrance counseling • Disclosure Statements • Electronic • Paper • Exit counseling • NSLDS

5. Loan Processing • Common Record • Student (Demographic) data • Award data • Disbursement data • XML • Response files • A – Accepted/Approved • R – Rejected • May also contain data on • MPNs • Credit checks (Plus)

6. Creating Award & Disbursement • Loan Origination (Certification) • Award • Establishes Loan Award • Disbursement • False – Pending (Doesn’t affect CFL) • True – Actual • Substantiates drawdown and can affect CFL • Can be sent within 7 days of the disbursement date • Two step process if pending disbursement sent first • Disbursement Number • Disbursement Sequence • Iterations/adjustments • Changes if award amount changes • Doesn’t change if only DRI being changed to ‘True’ • Award & Disbursements are sent together • Total Disbursements must equal the Award amount

7. Creating O & D on FAS • Profile Concept • Pre-populate Award & Disbursement data • Accessed from FACR – F3 • Set send indicator based on range of disbursement dates • Disbursement date with in 7 days And • Disbursement indicator = ‘True’ • Auto update the DRI to ‘True’ & send to COD, if with in 7 days • Calculate Award Amounts Based on annual limits • Unlimited number

8. Creating O & D on FAS – Case Study Semester-based Academic Calendar Award=$3500 Disbursement Dates = 09/15/2010 & 01/16/2011 Disbursement Release Indicator (DRI) = False or Pending

9. Creating O & D on FAS – Case Study DLIM

10. Creating O & D on FAS – Case Study DLIM List

11. Creating O & D on FAS – Case Study Award Detail

12. Creating O & D on FAS – Case Study PDSB Menu

13. Creating O & D on FAS – Case Study PDSB

14. Creating O & D on FAS - Case Study Disbursement Detail

15. Sending O & D on FAS • Disbursements are created as ‘Pending’ awards. DRI=F • Pending awards are not automatically sent to COD • Transmit Indicator must be updated to send Pending disbursements. • Options to send Pending awards • Update from the disbursement list, page by page • Set indicator on Master profile to ‘auto update DRI’. The system will update all Pending indicators to True (Actual) if it is within 7 days of the disbursement date and transmit them to COD • AWDC Mass update of Direct Loans • A mass update of the transmit indicator will be added to disbursement list

16. Sending Actual Disbursements on FAS – Case Study • When an accepted response is returned for ‘pending’ disbursements, FAS will automatically create new disbursements with DRI=‘F’ in anticipation of sending ‘actual’ disbursements Award = $3500 Initial Pending disbursement submission DRI set to ‘False’ on both Disbursements Disb # 1/Seq #1 $1750.00 Disb # 2/Seq #1 $1750.00 Actual First disbursement (with 7 days of disbursement date) Second submission DRI set to ‘True’, Disb # 1/Seq #1 $1750.00 DRI is still ‘False’, Disb # 2/Seq #1 $1750.00 Actual Second disbursement (with 7 days of disbursement date) Third submission DRI ‘True’, Disb # 1/Seq #1 $1750.00 DRI is set to ‘True’, Disb # 2/Seq #1 $1750.00 Sequence Number is not incremented when changing only the DRI

17. Adjusting a Disbursement on FAS • Pending Disbursement • Individual disbursements can be adjusted • Sequence number is incremented • Actual Fully Disbursed • Adjust the most recent • Continue working backward until you reach the new amount • Sequence number is incremented

18. Adjusting a Disbursement on FAS – Case Study Accepted Pending disbursement Initial submission Award = $3500 Disb # 1/Seq #1 $1750.00 Disb # 2/Seq #1 $1750.00 Adjustment Award = $2000 • Go to the disbursement list and select Disb #1 Disb # 1/Seq # 1, change disbursement amount to $1000.00 • Go to the disbursement list and select Disb #2 Disb # 2/Seq # 1 change disbursement amount to $1000.00 Sequence # must be incremented, since the disbursement amount is changing

19. Adjusting a Disbursement on FAS – Case Study Actual fully disbursement Initial submission Award = $3500 Disb # 1/Seq #1 $1750.00 Disb # 2/Seq #1 $1750.00 Adjustment Award = $1000 • Adjust the award record by pressing F11, from the award detail • Status will be ‘not ready’ • Go to the disbursement list and select Disb #2, press F11 to adjust Disb # 2/Seq # 2 $0 • Go to the disbursement list and select Disb #1, press F11 to adjust Disb # 1/Seq # 2 $1000.00 Always adjust the most recent disbursement first

20. Adjusting a Disbursement on FAS – Case Study • To increase a Direct Loan an ‘actual’ fully disbursement Initial submission Award = $2000 Disb # 1/Seq #1 $1000.00 Disb # 2/Seq #1 $1000.00 Adjustment Award = $3500 Adjust the award record by pressing F11from award detail Status will be ‘not ready’ Create a new disbursement from the list or detail Disb # 1/Seq #1 $1000.00 Disb # 2/Seq #1 $1000.00 Disb # 3/Seq #1 $1500.00

21. Loan Funding • Advanced Funding • Initial Current Funding Level (CFL) • Send ‘actual’ disbursements (substantiate) • No sooner than 7 days prior to disbursement date • Schools drawdown funds from G5 • Funds must be credited within 3 business days • Funds may be drawndown before O & D sent to COD • But must substantiate drawdowns with in 30 days • Funds are not student specific • May reallocate funds • CFL increased • Actual disbursements greater than initial CFL

22. LoanFunding • Booked Loan • Completed, Signed MPN • At least one accepted, actual disbursement • Accepted Award Record • Also for PLUS – Accepted Credit Check • Loan added to the Servicing System as a collectable asset • Student: Legally obligated to repay loan • Impacts compliance with the ’30-dayrule’

23. COD Options • COD defaults to Multi year Promissory note • eMPN or paper? • Do you want to require an Award/Origination record before a student can complete their eMPN? • Do you want to include an electronic message to students when they complete their eMPN? • If you need a paper MPN who will print them? • COD or school

24. COD Options • New for 2010-11 • Will school participate in electronic Parent PLUS Application? • If yes, what date do you want to begin • Remember credit checks are only good for 90 days. • How often do you want to get Parent PLUS Applications? • Daily or On demand • Will school participate in electronic Grad PLUS Application? • If yes, what date do you want to begin • Remember credit checks are only good for 90 days. • How often do you want to get Grad PLUS Applications? • Daily or On demand

25. COD Options • Entrance and Exit counseling reports • In transition • Moving from DL Servicing

26. Reconciliation • Reconciliation • Verify that funding requests are offset by disbursement requests • Must be completed monthly • Process must be documented • School compares COD’s records to its records • Cash Activity • Disbursement Activity • Difference must be $0

27. Reconciliation • Year-end Closeout • Final reconciliation for the award year • Must be completed no later than published deadline • Formal confirmation must be sent to/via COD • Contact COD School Relations Center to arrange post-closeout processing (if necessary)

28. Reconciliation • Direct Loan Tools • Import School Account Statement (COD) • Import School data from SBS • FAS will extract data for importing into DL Tools

29. COD Reports • School Account Statement (SAS) • Run Monthly-First full weekend of the month • Includes all data through the last day of the previous month • Cash Summary • Disbursement Summary by Loan Type • Cash Detail • Loan Detail, Loan level • Loan Detail, Disbursement Activity Level • Used for Reconciliation

30. COD Reports • Pending Disbursement List • Weekly • DRI=False • Reported period is a 45 day window into the future from the date of the report or any date in the past (Disb date < or = to 45 days from the report date) • Used for: • Determining future funding needs • Identify pending disbursements that should be actual • Identify awards or disbursements that need to be inactivated

31. COD Reports • 30 Day Warning Report • Monthly • Unbooked awards by type • MPNs not originated • 90 days worth of data beginning 120 days prior to the report run date • Award accepted 10/15/2010 not MPN or actual disbursement • Will appear on report after 30 days have passed since the award was accepted • Used for: • Identify missing pieces necessary for booking loan • Identify MPNs awaiting awards • Monitor compliance with 30 day reporting requirement

32. COD Reports • Inactive Report • Monthly • Award and disbursements have been adjusted to $0 for the reporting period • Used for: • Confirming accurate inactive loans • Identify awards that have dropped off the 30-day warning report

33. COD Reports • Duplicate Student Borrower Report • Monthly • Accepted multiple sub and/or unsub with overlapping academic years • Used for: • Identifying potential over awards

34. COD Reports • SSN/Name/Date of Birth Change Report • Weekly • Identifier changes, 90 days prior to the report end date • Student associated with school during any of the 3 most recent award years • Used confirm identifier changes

35. COD Reports • Entrance Counseling Report • Daily, weekly, or monthly • Used to identify students who have completed entrance counseling • Subject to changes since Entrance counseling is moving from DL Servicing

36. COD Reports • Exit Counseling Report • Daily, weekly, or monthly • Used to identify students who have completed exit counseling • Subject to changes since Entrance counseling is moving from DL Servicing

37. COD Reports • Other reports • Delinquent borrowers • MPN Discharge • Expired MPNs • MPNs due to expire

38. Reports • COD Reports put to page center • Customer reports made available from FAS

39. Financial Aid Services Staff1-800-443-0646 Option 4, 2 Jan Napiltonia - AVP (717-720-2077) Mike Byers – Manager, FAS Lisa Humphrey Cathy Machamer Development LeadCustomer Support Lead John Aunkst Skip Hetrick Steve Angle Laura Holmes Janice Contino Andy Martin Pamela Easley Marie Pellish Kara Marshall Jodi Feagley – Agreements & Administrative Support Brad Fisher – SAS Support for FAS & ALS 61