minneapolis, mn october 18-21 masfaa: time to refocus understanding ffelp process flows will...
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MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
Understanding FFELP Process Flows
Will Shaffner Keith BroadusDirector-Business Development Technical ConsultantMOHELA USA Funds Services
MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
The Master Promissory NoteThe Master Promissory NoteThe school, the lender, or ED must provide the borrower a copy of the completed Master Promissory Note (MPN) and repayment information with the first disbursement of loan funds. Other notifications such as notification of disbursement of funds and the right to cancel.
The MPN is a contract for a student loan between a borrower (a student or a parent) and a lender (the federal government for Direct Loans, or participating lenders for FFELs). It can serve as a multi-year note at all domestic schools, unless notified otherwise.
MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
The Master Promissory NoteThe Master Promissory Note
The school needs to know the following information:• which lender the student has chosen• whether the lender participates in electronic
processing or uses paper processing • For electronic processing, the school must know where
to transmit the loan eligibility certification – to the lender or to a guaranty agency that will process the loan on behalf of the lender.
• For paper processing, the school must know where to mail the Federal Stafford Loan School Certification.
• Central Disbursing Agent (CDA) or lender must have a signed MPN and a notice of guarantee prior to disbursement
MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
CommonLineCommonLine• The “language”/backbone of FFELP processing• Implemented in 1995 by the NCHELP Electronic
Standards Committee as a way to promote common file layouts for FFELP processing throughout the industry
• CommonLine 4 is most used file type• CommonLine 5 and CommonRecord:CommonLine (XML)
• Most commonly-used CommonLine file layouts • Application Send
• Application Receive
• Disbursement Roster
• Change Send/Response
• CommonLine M (Modification) Record-sometimes used in lieu of change files
• Certification Request (used by lenders)
• Can also support electronic Alternative Loan processing
MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
Process Evaluation: What’s best for my Process Evaluation: What’s best for my school?school?
• What is your school’s overall student service philosophy?• High-touch, personalized service
• Student-enabled: allow students to serve themselves via web and VPN-like applications
• Does my loan process emulate my school’s overall student service philosophy?• If not, where do we miss the mark?
• How efficient is my loan process?• Is it as streamlined as I think it is?
• How do I look for inefficiencies?
• How do I remedy those inefficiencies?
• Where/how does default prevention and financial literacy fit in to our process?
MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
Process Evaluation: What’s best for my Process Evaluation: What’s best for my school?school?
• Staffing• Will staffing needs change as a result of this evaluation?
• How do I manage these changes?
• Technical Support• How much support will I have from my IT/Web Master/FAMS
vendor if system and web-based changes need to be made?
• Where does my office fit in the campus pecking order for IT resources?
• What’s my timeframe for getting these changes implemented?
• FFELP partners• How accommodating will they be to my changes?
• Am I evaluating my process due to changes mandated by them?
• Other evaluation criteria?
MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
School-Initiated ProcessSchool-Initiated Process
Student & Parents
School Guarantor
Lender
1. Notify student of eligibility.
2. Certify loan on FAM system
3. Loan certification sent to guarantor
4. Notification sent to borrower to complete MPN via Internet.
Response file
Response file 5. EFT and disbursement information sent to school.
MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
Borrower-Initiated ProcessBorrower-Initiated Process
School
1. Notify student of eligibility.
Student & Parents
Guarantor
2. Student completes MPN via Internet or paper.
3. Notification of signed MPN sent to school.
4. Loan certification information sent to Guarantor.
Lender
5. Response file sent to school and lender.
6. EFT and disbursement information sent to school.
MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
Guarantor Flow ProcessGuarantor Flow Process
School
Student & Parents
1. Notify student of eligibility.
Guarantor
Lender
2. Loan certification information sent to Guarantor.
4. Notification sent to borrower to complete MPN via Internet or paper.
3. Response file sent to school and lender.
5. EFT and disbursement information sent to school.
MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
Lender Flow ProcessLender Flow Process
School
Student & Parents
Lender
Guarantor
1. Notify student of eligibility.
4. Loan certification information sent to Lender.
2. Student completes MPN via Internet or paper.
3. Notification of signed MPN sent to school.
5. Loan certification information sent to Guarantor for guarantee. Response file sent to Lender and school.
Response file
6. EFT and disbursement information sent to school.
MINNEAPOLIS, MN OCTOBER 18-21
MASFAA: TIME TO REFOCUS
Midwest Association of Midwest Association of Student Student Financial Aid AdministratorsFinancial Aid Administrators
Questions?