1. Session #20 PLUS Processing A to Z
Wood Mason| Dec U.S. Department of Education 2014 FSA Training Conference for Financial Aid Professionals

2. PLUS Processing A to Z Agenda Basics Eligibility
Master Promissory Note
Credit Check
Entrance Counseling
Processing Direct PLUS Loan data
Repayment

3. PLUS Processing A to Z Direct PLUS Loan basics
Two categories of borrowers
Parents of a Dependent Student
Graduate and/or Professional Student
Can be used to cover expected family contribution (EFC)
Direct PLUS Loans are limited in amount to the Cost of Attendance (COA) less any estimated financial assistance (EFA)
All Direct PLUS Loan borrowers must undergo a credit check
Data is reported to credit bureaus regularly as any other debt or financial obligation

4. PLUS Processing A to Z
Federal Direct PLUS Loan - Program eligibility for schools
Same as for the Direct Subsidized/Unsubsidized Loan Program
Reflected as separate program PPA/eCAR
Option to participate or not participate
Non-participation is NOT grounds for offering or awarding additional unsubsidized funds to a dependent undergraduate student
You must first inform a graduate and/or professional student of his or her eligibility for a Direct Unsubsidized Loan before offering and awarding a Direct PLUS Loan

5. PLUS Processing A to Z
Federal Direct PLUS Loan - Eligibility for borrowers
The borrower MUST meet Title IV eligibility requirements found in 34 CFR 668 Subpart C
The student for whom a parent is borrowing must also meet eligibility requirements found in 34 CFR 668 Subpart C
School determines borrower eligibility and loan amount
A borrower cannot have an adverse credit history as defined in CFR

6. PLUS Processing A to Z
Federal Direct PLUS Loan – Eligibility for borrowers
Parent borrower must be the student’s biological or adoptive Mother or Father
A step-parent is considered a parent if married to a biological or adoptive parent and if the student counts in their household size
A legal guardian is not an eligible borrower
Not eligible if delinquent on a debt to the Federal Government or incarcerated

7. PLUS Processing A to Z
Federal Direct PLUS Loan – Eligibility for borrowers
A parent can borrow for multiple dependent students
Unique parent/dependent student “pair” for each PLUS loan
Unique PLUS Request via StudentLoans.gov website
Unique Master Promissory Note (MPN) for each parent/student “pair”
StudentLoans.gov will retain parent/student “pair” data for subsequent PLUS loans

8. PLUS Processing A to Z
Federal Direct PLUS Loan – Eligibility for borrowers
Graduate or professional student
Eligible award year and forward
School MUST determine eligibility for, and offer, Direct Unsubsidized Loan first
Graduate/Professional students no longer eligible for subsidized loans
Must meet Title IV eligibility requirements
Must be enrolled at least half-time in an eligible program at an eligible school

9. PLUS Processing A to Z
Federal Direct PLUS Loan – Master Promissory Note (MPN)
Unique MPN – NOT a subsidized/unsubsidized loan MPN
XXXXXXXXXN15GXXXXX001
Contains borrower and/or student data
PLUS MPN used for ALL PLUS loans
Links on the SSN, DOB, and first two characters of the first name of both borrower and student
Unique MPN for each parent/student “pair” if multiple dependent students
Expires 10 years from date of receipt in COD
12 months if there’s no disbursement on a linked loan

10. PLUS Processing A to Z Federal Direct PLUS Loan – MPN Single-Loan MPN
When an endorser is linked to the PLUS Loan MPN
Linked MPN reflects a status of “Inactive-Endorser”
Any future loan will need a new MPN

11. PLUS Processing A to Z Federal Direct PLUS Loan Basics - Credit
ALL Direct PLUS Loan Borrowers undergo a credit check
Initiated by the school or the borrower
The school via the loan origination record (LOR)
The school online via the COD website
The borrower via a Direct PLUS Request on the StudentLoans.gov website
If done online by the school or the PLUS borrower you should originate the PLUS loan if borrower is otherwise eligible

12. PLUS Processing A to Z Federal Direct PLUS Loan - Credit
Must have borrower authorization to conduct a credit check
Part of Federal Direct PLUS Loan MPN
Downloaded from COD website
Hand written/faxed signed authorization
SSN is the key identifier for a credit check and change will trigger a new credit history
Reflected as inquiry on applicant’s credit history

13. PLUS Processing A to Z Federal Direct PLUS Loan Basics - Credit
An adverse credit history means that as of the date of the credit report, the applicant…
Is 90 or more days delinquent on any debt
During the five (5) years preceding the date of the credit report the applicant has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a debt under Title IV of the Higher Education Act
Absence of credit history is not considered adverse credit history

14. PLUS Processing A to Z
Adverse credit criteria will change with COD Release 14.0 in late March 2015
34 CFR will be amended to include the new criteria
Window for a credit check to “stand” on COD will be increased from 90-days to 180-days
Charge-off and collection accounts will now be included in the credit decision
Credit history is considered adverse with one or more debts with a combined outstanding balance > $2,085 that are 90 or more days delinquent as of the date of the credit report, or placed in collection/charged off within two years of the date of the credit report

15. PLUS Processing A to Z
Adverse credit criteria will change with COD Release 14.0 in late March 2015
Borrowers who successfully appeal an adverse credit history decision based on extenuating circumstances, or secure an endorser, MUST undergo PLUS Loan counseling
PLUS Loan counseling will be available on a voluntary basis for those who are not declined for adverse credit history

16. PLUS Processing A to Z Federal Direct PLUS Loan - Credit
Currently, a credit check result is valid for 90 days
If additional activity occurs that would otherwise trigger a credit check during that 90-day period COD will use the result on the database
If additional activity occurs that would otherwise trigger a credit check beyond the 90-day period COD will initiate a subsequent credit check
Credit result can be
Accepted (A)
Declined (D) – adverse credit history
Pending (P) – issue with the inquiry

17. PLUS Processing A to Z Federal Direct PLUS Loan - Credit
Denial of one parent is sufficient to offer additional unsubsidized loan funds to that dependent student
Other parent does NOT have to undergo PLUS loan process
A credit result of Declined is not school specific and can be used across schools on loans with the same academic year

18. PLUS Processing A to Z Federal Direct PLUS Loan - Credit
School can offer additional unsubsidized loan funds to a dependent student after determination of the inability of the parent to borrow due to exceptional circumstances
Forego the PLUS Request process altogether
34 CFR
DCL ID: GEN-11-07
Case-by-case
DOCUMENT reason for determination of ineligibility

19. PLUS Processing A to Z Federal Direct PLUS Loan - Credit
School can award the additional unsubsidized loan based on the parent’s inability to obtain a PLUS loan due to exceptional circumstances even if the parent has already applied for a Direct PLUS Loan and been approved based on their credit check results
COD does NOT look for a declined PLUS loan as validation against an incoming unsubsidized loan for a dependent student

20. PLUS Processing A to Z Federal Direct PLUS Loan - Credit
PLUS loan with credit declination can be accepted and displayed on COD
Common Record Response will carry COD Warning Edit #036
Can’t disburse unless and until credit denial is cured
Initial declined credit status remains on the COD website
COD Release 13.2 (Mid-December, 2014) will see enhanced Parent PLUS Loan identifier validation
ONLY on Parent PLUS Loans with a credit check result of “Pending” and an identifier (SSN/DOB combination) mismatch between COD and the credit bureau
A new award level COD reject edit #216 accompany this change

21. PLUS Processing A to Z Federal Direct PLUS Loan - Credit Appeal
Appeals…
Appeal on extenuating circumstances or errant data from the Credit Bureau
Appeal by submitting specific documents requested by COD
Can start appeal process on StudentLoans.gov - instructions on StudentLoans.gov screens
A successful appeal will result in a credit override response (Document Type CO) sent to the school
Reconsideration Eligibility

22. PLUS Processing A to Z Federal Direct PLUS Loan - Credit Appeal
Credit Check Reconsideration
Borrower was denied ONLY for Charge-Off Accounts and/or Collection Accounts and the borrower has at least one active accepted award on file with an EDD on or after 7/1/2010 and before 07/30/2013 with at least one funded disbursement and no endorser
Initiated by the COD Applicant Services
Contact with declined borrower via explains the process and offers a “second look” at their declined credit
NO ACTION IS TAKEN WITHOUT BORROWER CONTACT AND ACCEPTANCE OF RECONSIDERATION

23. PLUS Processing A to Z Federal Direct PLUS Loan - Credit Appeal
Credit Check Reconsideration
Borrowers who pursue the reconsideration can be approved during the telephone call
If credit declination is overridden it will impact any already awarded/disbursed unsubsidized award
COD immediately updates the borrower in the website and generates/transmits an override (CO) acknowledgement to the school

24. PLUS Processing A to Z Federal Direct PLUS Loan - Credit Appeal
“Credit Check Reconsideration Eligibility” report
Generated weekly and posted to the school NewsBox on the COD website in CSV format
Identifies borrowers at their school whose most recent credit check is eligible for reconsideration
A borrower’s credit check will be displayed on the report for 180 days from the record’s Credit Check Date
If the borrower appeal is accepted, he or she will not display on the following week’s report

25. PLUS Processing A to Z Federal Direct PLUS Loan - Endorser
CANNOT be the student for whom the loan is intended
Endorser undergoes a credit history check
Endorser CANNOT appeal denial due to an adverse credit history
Endorser completes an Endorser Addendum
Endorser promises to pay outstanding principal balance, accrued interest, and any penalties, AND any collection costs
Paper or electronic via StudentLoans.gov
An endorsed loan is reported to the credit bureau
Endorser search function on the COD Reporting website

26. PLUS Processing A to Z Federal Direct PLUS Loan - Endorser
Endorser will need to provide the new Direct PLUS Loan Endorser Code AND the borrower’s last name, OR the Direct PLUS Loan ID AND the borrower’s last name to endorse a Direct PLUS Loan*
The Endorser authenticates using their FSA PIN
A borrower will receive the Direct PLUS Endorser Code via their confirmation
Also viewable on the completed Direct Loan PLUS Request on the StudentLoans.gov website AND the Direct PLUS Application Detail screen
*The loan reference number is no longer used

27. PLUS Processing A to Z Federal Direct PLUS Loan - Endorser
If the endorser completes a paper Endorser Addendum
A Master Promissory Note for the endorser
The borrower can print a paper addendum for the endorser for submission off of the StudentLoans.gov website
If no PLUS loan LOR on the system, no response from COD until PLUS loan LOR is submitted
PLUS loan LOR will link to endorser addendum and COD will generate a “CO” response and send to school

28. PLUS Processing A to Z Federal Direct PLUS Loan - Endorser
Endorser data and endorsed amount displayed on the COD loan information screen
Cannot disburse more than the lesser of the endorsed amount or loan amount approved
Endorsed amount is displayed on response from StudentLoans.gov
CANNOT increase a PLUS loan with an endorser
Must create and originate a subsequent PLUS loan
A new credit history on borrower and endorser if last credit check is older than 90 days*
*180 days with COD Release 14.0

29. PLUS Processing A to Z Federal Direct PLUS Loan – Entrance Counseling
First-time graduate & professional student PLUS borrower MUST complete PLUS entrance counseling prior to disbursement
Not the same as undergraduate entrance counseling
Offered at StudentLoans.gov
COD sends a Counseling Response to the school
You are NOT REQUIRED to use FSA online counseling

30. PLUS Processing A to Z
Federal Direct PLUS Loan – Processing Award Date
School is responsible for determining eligibility for, and amount of, the PLUS award
Anticipated and/or actual disbursements = loan amount
Up to 20 actual disbursements
Report ACTUAL date of disbursements
Origination fee assessed on each actual disbursement
4.292% on loans with an EDD on or after October 1, 2014 and before October 1, 2015

31. PLUS Processing A to Z
Federal Direct PLUS Loan – Processing Award Data
Via “batch” by submission of a Common Record (CR)
CR response returned reflecting status of award, credit, actual disbursement (if applicable), and MPN
Individually online at COD website
Immediate editing of submitted data
Manually create an award from the “Person Information” screen and “submit”
Automatically create an award from the “SP” acknowledgement from StudentLoans.gov
Creates a “skeleton” award to complete and submit

32. PLUS Processing A to Z
Federal Direct PLUS Loan – Processing Award Data
CAVEAT - a school can decline to originate, or originate a lesser loan amount than requested, on a case-by-case basis
You MUST document the reason
You cannot do so on an across-the-board basis
34 CFR

33. PLUS Processing A to Z Federal Direct PLUS Loan – Disbursements
Assure eligibility of the dependent student
Unless otherwise directed, any credit balance is given to the parent
Generate and deliver the required school notifications
Disburse via batch or online via the Award Disbursements Information screen
Also disburse from the Action Queue

34. PLUS Processing A to Z Federal Direct PLUS Loan – Disbursements
The disbursement data MUST be reported to COD within 15 days of the actual date of disbursement
You must report the ACTUAL DISBURSEMENT DATE
The date award funds are credited to the student’s account or otherwise made available to the student/borrower
Can be reported seven days prior to the actual disbursement date
Make sure you are sending the ACTUAL date of disbursement and not mistakenly re-sending the anticipated disbursement date

35. PLUS Processing A to Z Federal Direct PLUS Loan – Disbursements
You may increase a PLUS loan already established on the COD database
Change record if software allows
New PLUS loan for the difference requested
But you cannot increase an established PLUS loan if in receipt of a subsequent adverse credit decision
If the established PLUS loan is NOT fully disbursed you can fully disburse it
Alternatively, reduce remaining disbursements to $0 and offer student unsubsidized funds up to their eligibility for grade level and need

36. PLUS Processing A to Z Federal Direct PLUS Loan – Disbursements
If the established PLUS loan has been fully disbursed…
Offer the dependent student an additional unsubsidized loan up to their eligibility appropriate to their grade level and remaining need

37. PLUS Processing A to Z Federal Direct PLUS Loan – Disbursements
Once COD has received an accepted LOR with an acceptable credit decision, a linked MPN, and an actual disbursement the PLUS loan is “booked”
Liability for funds transfer from the school to FSA
Generally, disbursement #1, sequence #1 books the loan
Each subsequent disbursement books as well
When the loan is booked it is assigned to a Servicer

38. PLUS Processing A to Z Servicers
MOHELA
Granite State
GSMR
Navient
Great Lakes
FedLoan Svcg
Aspire Resources Inc.
CornerStone
ESA Edfinancial
NelNet
OSLA Servicing
VSAC Federal Loans
LDE : The Loan Distribution Engine is the interface that assigns a booked loan to a federal loan servicer

39. PLUS Processing A to Z Federal Direct PLUS Loan – Repayment
Deferment and Forbearance options available
Parent can request to defer repayment while dependent student, or parent is enrolled at an eligible school more than half-time
Student does NOT need to request in-school deferment
Parent can request to defer repayment for an additional six months from the date the dependent student ceases to be enrolled on at least a half-time basis

40. PLUS Processing A to Z Federal Direct PLUS Loan – Repayment
Repayment options much like subsidized/unsubsidized loan borrowers
Standard
Graduated
Extended
Minimum outstanding loan balance > $30,000
Income dependent repayment plans are NOT available for parent PLUS loan
Income-contingent repayment plan available for Direct Consolidation Loan that includes an underlying Parent PLUS Loan

41. PLUS Processing A to Z Resources… COD Technical Reference
Volume II, Section I, “Implementation Guide”
Code of Federal Regulations
34 CFR 685
34 CFR 668 (General Student Assistance Provisions)
Your Federal Loan School Support Team Point of Contact

42. PLUS Processing A to Z Resources… COD School Relations Center
(Student Loan Support Center)
(Direct Loan Program)
(Foreign Schools)

43. QUESTIONS?

44. U.S. Department of Education
PLUS Processing A to Z
Wood Mason
U.S. Department of Education
Federal Student Aid
Atlanta, GA

45. Direct PLUS Loan Master Promissory Note
PLUS Processing A to Z
Appendix A
Direct PLUS Loan Master Promissory Note

46. PLUS Processing A to Z

47. Instant Online Credit Check
PLUS Processing A to Z
Appendix B
Instant Online Credit Check

48. PLUS Processing A to Z

49. PLUS Processing A to Z

50. PLUS Processing A to Z

51. Endorser Search and return
PLUS Processing A to Z
Appendix C
Endorser Search and return

52. PLUS Processing A to Z

53. PLUS Processing A to Z
Daffina Duck
3/12/1994

54. PLUS Processing A to Z
Appendix D
Endorser Addendum

55. PLUS Processing A to Z