150% Direct Subsidized Loan limit – Importance of Accurate Direct Loan and Enrollment Reporting to Prevent Loss of Subsidy

It is important that schools accurately report a borrower’s Direct Loan (Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans) information to the COD System and enrollment information to NSLDS to ensure that Subsidized Usage and interest subsidy status can be calculated correctly.

If accurate information is not reported (or corrections are not made when information changes), a borrower may incorrectly lose the interest subsidy on his or her Direct Subsidized Loans. In addition, schools may be subject to sanctions, including possible administrative action pursuant to 34 CFR 668, Subpart G – Fine, Limitation, Suspension, and Termination Proceedings.

Note: A school must be aware of its Direct Loan reporting even if its loan processing or enrollment reporting is handled by a third party servicer. It is the school’s responsibility to ensure that reporting is being completed timely and correctly.

Reporting Direct Loan Information to the COD System

If no additional Direct Loan disbursements will be paid to a borrower (current or former student), a school must ensure the following is reported to the COD System:

  • All pending Direct Loan disbursements were reduced to zero.
  • All loan amounts equal the total amounts disbursed.
  • The borrower’s correct enrollment status (at the time of each actual disbursement) was reported.
  • Loan period dates (<FinancialAwardBeginDate> and <FinancialAwardEndDate>) have been adjusted to include only those payment periods (terms) for which the borrower received and retained an actual disbursement.
  • Academic year dates (<AcademicYearBeginDate> and <AcademicYearEndDate>) reflect the defined length of a program’s academic year, and the dates were adjusted, when or if appropriate.

Example: If the student was attending a clock-hour program, the academic year end date may need to be adjusted to reflect the time needed to complete the remainder of the program.

Note: An academic year for a credit-hour or direct assessment program must include at least 30 weeks of instructional time (except in certain cases). An academic year for a clock-hour program must include at least 26 weeks of instructional time.

Additional information on Direct Loan academic years and payment periods can be found in the Federal Student Aid Handbook, Volume 3, Chapter 1 and Volume 3, Chapter 5.

  • The same Weeks-Programs-Academic-Year (<WeeksProgramsAcademicYear>) was reported to both the COD System and NSLDS, and the academic year dates reflect at least the number of weeks reported.
  • The same program length measurement (Weeks, Months, or Years) for the same program was reported to both the COD System and NSLDS.

Example: If a school reports the Published Program Length for a particular program in weeks to the COD System, it should also report the Published Program Length for that program in weeks to NSLDS.

As a reminder, schools must generally update reported loan periods and academic years, as with any other adjustment to an origination record, within 15 days of the date that the school became aware of the need to make an adjustment. For non-term or clock-hour programs, the school would not become aware of the need to make an adjustment until the student has finished with the loan period or academic year or withdrawn.

In addition, award-level tags, such as <PublishedProgramLengthYears>, <PublishedProgramLengthMonths>, <PublishedProgramLengthWeeks>, <ProgramCredentialLevel>, <SpecialProgramIndicator>, and <WeeksProgramsAcademicYear> must be accurate as of the date that the last disbursement was made on the loan. For example, if a student was enrolled in a 1-year certificate program (credential level “1”) when the first disbursement was made, but is in a 2-year associate degree program (credential level “2”) when the second disbursement is made, the school must update the appropriate award-level tags when reporting that the second disbursement has been made.

Enrollment Reporting to NSLDS

A school must ensure the following is reported to NSLDS:

  • The Published Program Length is reported in the correct format.

Example: A four-year bachelor’s degree program should be reported as “004000” (4 years) not “000400” (0.4 years). There is an implied decimal between the third and forth digit.

  • The Program Begin Date is reported as the date in which the student actually began enrollment in the program (generally, for term-based programs, this will be the first day in the term in which the student commenced attendance).
  • The student’s correct program-level enrollment status is reported (See DCL GEN-14-17).
  • If a change or correction is needed to the reported value of either the Published Program Length, Published Program Length Measurement (W-M-Y), or Weeks in Title IV Academic Year, the program is re-reported and the prior program with the incorrect length is inactivated by reporting with a program-level enrollment status of “X” (Never Attended).
  • If the program-level enrollment status effective date of the Graduation (“G”) status is later than the loan period end date of the student’s last SULA-eligible loan, a Withdrawal (“W”) status with an effective date no later than the last loan period end date should be reported.

Example: If the loan period end date is May 24, 2015 and the Graduation is effective July 31, 2015, a “W” should be reported effective no later than May 24, 2015.

Note: This example assumes that the student received a loan for the final period of attendance prior to the completion of the program. If the student did not receive a loan in the final period, the effective date of the W status should equal the student’s last date of attendance in the final term or payment period in which the student completes the program.

It is important that NSLDS receive a W status in these cases to prevent a loss of interest subsidy being applied to the student’s loan(s) incorrectly, based on assumed continuous enrollment up to the later effective date of the G status.

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