Reviewing One-Term DL Loan Functionality
This section provides an overview of one-term DL loan functionality and discusses how to:
Define a single-term loan.
Award a single-term loan after the midpoint.
Associate rules with one-term DL processing.
Review disbursement ID scenarios.
Federal regulations require that a single term loan be split into at least two disbursements. The one-term option is designed for schools using direct loan MPN processing. This functionality is also available for those non-DL item types that have the disbursement protection flag activated.
If the loan period consists of only one semester, the first half of the loan is disbursed at the beginning of the semester. The second half is disbursed at the calendar midpoint of the semester. For any loan period, if more than half of the loan period has elapsed before an initial disbursement has been made, a single disbursement of the entire loan may be made. After an initial disbursement is authorized and disbursed, you can repackage (increase or decrease) the award in the same manner as is currently in place for multi-item DL awards.
|
Page Name |
Definition Name |
Navigation |
Usage |
|---|---|---|---|
|
Disbursement Split Formula |
DISB_ID_SPLIT |
|
Define split code formulas or disbursement percentages for the split codes you created based on the disbursement split code descriptions. This setup provides the specific percentage distribution to each disbursement ID created within a disbursement plan. |
Access the Disbursement Split Formula page ().
Image: Disbursement Split Formula page
This example illustrates the fields and controls on the Disbursement Split Formula page. You can find definitions for the fields and controls later on this page.
Setup is defined for a single term and must contain two or more disbursement IDs, each containing a unique disbursement date. In addition, the disbursement date for the designated midpoint disbursement ID must be after the midpoint of the term.
|
Field or Control |
Definition |
|---|---|
| Even Split Option |
Select the value, "Even across disbs for One Term" to define the new split code for a single term loan. |
| Midpoint |
Select to identify the midpoint date. |
Note: All Direct Lending loan item types can support the concept of a disbursement plan and split code scheme that supports multiple disbursement IDs within a term. COD currently supports up to 20 total disbursements per loan application for both Stafford and PLUS loans. To facilitate increases and change processing for one term Direct Loan MPN Financial Aid Item Types, you should set up and define at least four disbursement IDs.
If a single term loan is awarded after the midpoint of the term, you have the option to disburse the entire award amount in a single installment. If you pay the student this way, you do not need to use the Even Across Disbursements for One Term disbursement plan option. You can create a disbursement plan with disbursement dates on or after the midpoint and use the existing Even Among First Disb for Term option that places the entire disbursement in the first disbursement ID of each term.
One-term DL loan processing treatment is identical to the one-term non-DL item type with disbursement protection invoked. If you decrease the loan and all disbursement IDs have been disbursed, the system decreases the award starting with the last disbursement ID and works its way up toward the first ID. Also, if you increase the loan and all of the disbursement IDs have been disbursed, then you must use a different item type to make the increased award.
To compare and illustrate the behavior of one-term DL loan processing versus a non-DL award with disbursement protection invoked versus a non-DL item type with disbursement protection turned, review the following examples.
Note: Although the following examples show a two disbursement plan for direct loan item types and disbursement plans, we are recommending that you create plans with a minimum of four disbursement IDs. This facilitates change increases made to the award after the first disbursement has been made.
Student with a DL Item Type
In the following example, a student is awarded a DL item type with a Disbursement Plan/Split Code (even split for single term) with two IDs.
Disbursement Plan/Split Code: OT2
ID 01 09/01/2005
ID 02 11/01/2005 Midpoint
Award the student 1 Disbursement Plan/Split Code: OT 2,000.00 USD on 08/01/2005
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
0.00
Disbursement 02
500.00 USD
0.00
Originate and disburse ID 01 for 500.00 USD on 09/05/2005
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
500.00 USD
0.00
Increase the student's award to 1,500.00 USD on 09/10/2005: Because Disbursement 01 is disbursed, the residual increase in the award amount goes toward the midpoint disbursement ID (Disbursement 02).
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
1,000.00 USD
0.00
Originate and disburse ID 02 for 1,000.00 USD on 10/20/2005.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
1,000.00
1,000.00 USD
Decrease the student's award to 900.00 USD on 10/25/2005. The system repackages and adjusts Disbursement 02 downward from 1,000.00 USD to 400.00 USD to total the 900.00 USD award.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
400.00 USD
1,000.00 USD
You must run DL origination as well as authorization/disbursement to reverse the 600.00 USD adjustment so that it reflects the revised Disbursement 02 ID amount of 400.00 USD.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
400.00 USD
400.00 USD
Increase the award to 1,100.00 USD on 11/10/2005. Because all of the split IDs have been fully disbursed, you should get an award message requesting that you use another item type for the increase.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
400.00 USD
400.00 USD
Decrease the award to 800.00 on 11/15/2005. The system repackages and adjusts Disbursement 02 ID downward from 400.00 USD to 300.00 USD to total the 800.00 USD award.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
300.00 USD
400.00 USD
You must run DL origination and authorization/disbursement to reverse the 100.00 USD adjustment so that it reflects the revised Disbursement 02 ID amount of 300.00 USD.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
300.00 USD
300.00 USD
Student with a Non-DL Item Type with Disbursement Protection Turned On
In the following example, a student is awarded a non-DL item type with disbursement protection turned on at the item type level and with a Disbursement Plan/Split code (Even Split for Single Term) with two IDs.
Disbursement Plan/Split Code: OT2
ID 01 09/01/2005
ID 02 11/01/2005 Midpoint
Award the student 1,000.00 USD on 08/01/2005.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
0.00
Disbursement 02
500.00 USD
0.00
Originate and disburse ID 01 for 500.00 USD on 09/05/2005.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
500.00 USD
0.00
Increase the student's award to 1,500.00 USD on 09/10/2005: Because Disbursement 01 is disbursed, the residual increase in the award amount goes toward the midpoint disbursement ID (Disbursement 02).
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
1,000.00 USD
0.00
Disburse ID 02 for 1,000.00 USD on 10/20/2005.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
1,000.00 USD
1,000.00 USD
Decrease the student's award to 900.00 USD on 10/25/2005. The system repackages and adjusts Disbursement 02 downward from 1,000.00 USD to 400.00 USD to total the 900.00 USD award.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
400.00 USD
1,000.00 USD
You must run authorization/disbursement to reverse the 600.00 USD adjustment so that it reflects the revised Disbursement 02 ID amount of 400.00 USD.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
400.00 USD
400.00 USD
Increase the award to 1,100.00 USD on 11/10/2005. Because all of the split IDs have been fully disbursed, you should get an award message requesting that you use another item type for the increase.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
400.00 USD
400.00 USD
Decrease the award to 800.00 on 11/15/2005. The system repackages and adjusts Disbursement 02 ID downward from 400.00 USD to 300.00 USD to total the 800.00 USD award.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
300.00 USD
400.00 USD
You must run authorization/disbursement to reverse the 100.00 USD adjustment so that it reflects the revised Disbursement 02 ID amount of 300.00 USD.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
300.00 USD
300.00 USD
Student with a Non-DL Item Type with Disbursement Protection Turned Off
In the following example, a student is awarded a non-DL item type with disbursement protection turned off at the item type level and with a Disbursement Plan Split Code (Even Split for Single Term) with two IDs.
Disbursement Plan/Split Code: OT2
ID 01 09/01/2005
ID 02 11/01/2005 Midpoint
Award the student 1,000.00 USD on 08/01/2005.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
0.00
Disbursement 02
500.00 USD
0.00
Disburse ID 01 for 500.00 USD on 09/05/2005.
Split
Awarded
Disbursed
Disbursement 01
500.00 USD
500.00 USD
Disbursement 02
500.00 USD
0.00
Increase the student's award to 1,500.00 USD on 09/10/2005: Because disbursement protection is off, the system recasts the award across all of the disbursement IDs, both disbursed and undisbursed.
Split
Awarded
Disbursed
Disbursement 01
750.00 USD
500.00 USD
Disbursement 02
750.00 USD
0.00
Re-disburse Disbursement ID 01 for the residual 250.00 USD and disburse Disbursement ID 02 for 750.00 USD on 10/20/2005.
Split
Awarded
Disbursed
Disbursement 01
750.00 USD
750.00 USD
Disbursement 02
750.00 USD
750.00 USD
Decrease the student's award to 900.00 USD on 10/25/2005. Because disbursement protection is off, the system recasts the award across both disbursement IDs that are disbursed, thereby adjusting Disbursement 01 ID downward from 750.00 USD to 450.00 USD and adjusting Disbursement 02 ID downward from 750.00 USD to 450.00 USD to total the 900.00 USD award.
Split
Awarded
Disbursed
Disbursement 01
450.00 USD
750.00 USD
Disbursement 02
450.00 USD
750.00 USD
You must run authorization/disbursement to reverse the 300.00 USD adjustments each from Disbursement ID 01 and Disbursement ID 02 (totaling the 600.00 USD decrease) so that it reflects the revised Disbursement 01 ID amount of 450.00 USD and Disbursement 02 ID amount of 450.00 USD.
Split
Awarded
Disbursed
Disbursement 01
450.00 USD
450.00 USD
Disbursement 02
450.00 USD
450.00 USD
Increase the award to 1,100.00 USD on 11/10/2005. Because disbursement protection is off, the system recasts the award across both disbursement IDs that are disbursed, thereby adjusting Disbursement 01 ID upward from 450.00 USD to 550.00 USD and adjusting Disbursement 02 ID upward from 450.00 USD to 550.00 to total the 1,100.00 award.
Split
Awarded
Disbursed
Disbursement 01
550.00 USD
450.00 USD
Disbursement 02
550.00 USD
450.00 USD
Re-disburse Disbursement ID 01 for the residual 100.00 USD and Disbursement ID 02 for 100.00 USD, totaling 550.00 USD each (or 1,100.00 USD total disbursements) on 11/15/2005.
Split
Awarded
Disbursed
Disbursement 01
550.00 USD
550.00 USD
Disbursement 02
550.00 USD
550.00 USD
Decrease the award to 800.00 USD on 11/15/2005. Because disbursement protection is off, the system recasts the award across both disbursement IDs that are disbursed, thereby adjusting Disbursement 01 ID downward from 550.00 USD to 400.00 USD and adjusting Disbursement 02 ID downward from 550.00 USD to 400.00 to total the 800.00 USD award.
Split
Awarded
Disbursed
Disbursement 01
400.00 USD
550.00 USD
Disbursement 02
400.00 USD
550.00 USD
You must run authorization/disbursements to reverse the 300.00 USD adjustment so that it reflects the revised Disbursement 01 ID amount of 400.00 USD and the revised Disbursement 02 ID amount of 400.00 USD.
Split
Awarded
Disbursed
Disbursement 01
400.00 USD
400.00 USD
Disbursement 02
400.00 USD
400.00 USD