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.
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.
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 have been adjusted to include only those payment periods (terms) for which the borrower received and retained an actual disbursement.
- Academic year dates and reflect the defined length of a program’s academic year, and the dates were adjusted, when or if appropriate.
- The same Weeks-Programs-Academic-Year 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 for the same program was reported to both the COD System and 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become aware of the need to make an adjustment until the student has finished with the loan period or academic year or withdrawn.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 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.