The Fiscal Year 2015 sequester requires increased origination fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans (for both parent and graduate student borrowers) with a first disbursement on or after October 1, 2014 and before October 1, 2015. Schools may begin to send to the COD System Direct Loan records where the first disbursement will be on or after October 1, 2014 using the origination fees noted in GEN-14-10 as soon as their systems allow.
Keep in mind –
- If a school has already submitted (and the COD System has accepted) Direct Loan records with a first disbursement date on or after October 1, 2014 that used the lower origination fees, those records will need to be corrected. For instructions on correcting the origination fees, see the attachment to the electronic announcement posted on May 9th – “Submitting Changes to Origination Fee Percentages and Disbursements.”
- If a school submits a Direct Loan record with an incorrect origination fee, it will be rejected with COD Reject Edit 140 (Incorrect Origination Fee Percent and/or Interest Rebate Percent on New Awards).
Note: The rounding and truncating rules for the COD System have not changed. The COD System will not accept or store penny amounts on Direct Loan awards. COD System business rules for disbursement calculations are found in Volume II, Section 1 of the 2014-2015 COD Technical Reference (beginning on page 99).