Posted Date: June 20, 2013

Author:  Sue O'Flaherty, Service Director, Program Management, Federal Student Aid

Subject: 150% Direct Subsidized Loan Limit: Electronic Announcement #2 - Phase One of COD System Changes Scheduled for June 28-30, 2013

On July 6, 2012, the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Public Law 112-141) was enacted. MAP-21 added a new provision to the Direct Loan statutory requirements (see HEA section 455(q)) that limits a first-time borrower’s eligibility for Direct Subsidized Loans to a period not to exceed 150% of the length of the borrower’s educational program. Under certain conditions, the provision also causes first-time borrowers who have exceeded the 150% limit to lose the interest subsidy on their Direct Subsidized Loans.

As noted in 150% Direct Subsidized Loan Limit: Electronic Announcement #1, which was posted to the Information for Financial Aid Professionals (IFAP) Web site on May 16, 2013, we will be making system changes to the Common Origination and Disbursement (COD) System, the National Student Loan Data System (NSLDS), and the Central Processing System (CPS) to implement the 150% limit.  These changes will occur in multiple phases:

  • In phase one, we will make changes to the COD System and the NSLDS.

  • In phase two, we will make additional changes to the COD System and the NSLDS, and make changes to the CPS.

Prior to each system implementation, we will provide operational guidance and outage information in an Electronic Announcement posted to the IFAP Web site.  In this announcement, we provide information about phase one of the COD System changes planned for June 28-30, 2013.

Note: Other COD System changes that will also be part of the June 28-30, 2013 implementation will be covered in a forthcoming Electronic Announcement.

Phase One COD System Changes

During the period June 28-30, 2013, we will implement COD System changes related to the 150% Direct Subsidized Loan limit.  These changes will identify for schools first-time borrowers who are subject to the 150% limit.  This information will help schools provide those borrowers with the entrance counseling that is required under the interim final regulations (see 150% Direct Subsidized Loan Limit: Electronic Announcement #1 for information about entrance counseling requirements).

New System Field – We will add a new Subsidized Usage Limit Applies (SULA) field to the COD System.  The SULA field will allow schools to identify a first-time borrower who has no outstanding loan balance on Federal Family Education Loan (FFEL) Program or Direct Loan Program loans at the time he or she receives a Direct Subsidized Loan or Direct Unsubsidized Loan on or after July 1, 2013. 

Note: Although the receipt of a Direct PLUS Loan can also make a student or parent a first-time borrower, we will not identify the student or parent as a first-time borrower unless the student or parent receives a Direct Subsidized Loan or Direct Unsubsidized Loan. 

The SULA field will be populated with a date on the COD Web site’s View Person Information page. The SULA date will be the date when the first actual disbursement of a Direct Loan award for a first-time borrower is accepted by the COD System.  The SULA date cannot be changed by a school.

New Warning Edit – We will add a new COD Warning edit to notify schools of first-time borrowers who are subject to the 150% limit.  COD Warning Edit 200 will be returned at the person level on any award once the SULA field is populated.  COD Warning Edit 200 will be returned with the message “150% Subsidized Usage Limit Applies to borrower.”

New System Report – We will create a new report for schools.  The Web-only report will be automatically posted weekly to a school’s COD Reporting Newsbox in comma-separated-values (.csv) file format.  It will not be sent via the Student Aid Internet Gateway (SAIG) and will not be available for a school to request on an ad-hoc basis.

The report will list all borrowers who are subject to the 150% limit.  A borrower’s name will appear only once per school per Direct Loan processing year and will remain on the report for 45 days.  If there are no first-time borrowers identified during the reporting period, the school will not receive a report for that week.  A school will be able to view up to 26 previous versions of the report on the COD Reporting Web site.

Future Communications

Phase one changes to the NSLDS is planned for July 2013.  Information about these changes will be provided in forthcoming communications posted to the IFAP Web site.

Information about the second phase of system changes to the COD System, the NSLDS, and the CPS will be posted in future communications as we finalize the requirements for those changes.  We will also post information about these future changes in upcoming postings of the related system documentation and technical references.

Contact Information

If you have questions about the first phase of COD System changes related to the 150% limit, contact the COD School Relations Center at 800/848-0978.  You may also e-mail CODSupport@ed.gov.

   

End of Page