Setting Up Loan Fees
To set up loan fees, use the Loan Fee Setup component (LOAN_FEE_TABLE).
Set up loan fees in the Loan Fee Table to ensure that the correct loan fees are deducted from each loan financial aid item type at the time of awarding. Loan fees are origination and insurance fees that are deducted from the gross amount of the loan. When defining a loan financial aid item type, attach the appropriate loan fees on the FA Item Type 6 page. Remember to create loan fee information for all loan types at your institution.
This section discusses how to create loan fees.
|
Page Name |
Definition Name |
Navigation |
Usage |
|---|---|---|---|
|
Loan Fee Table |
LOAN_FEE_TABLE |
|
Create and maintain loan fees. |
Access the Loan Fee Table page ().
Image: Loan Fee Table page
This example illustrates the fields and controls on the Loan Fee Table page. You can find definitions for the fields and controls later on this page.
|
Field or Control |
Definition |
|---|---|
| Loan Fee Type |
Select the value that indicates the purpose of the loan fee. Be sure to select R—Rebate if the loan fee is an interest rebate, used for the Direct Loan interest rebate. Note: Any Direct Loan with a zero rebate, must still have a Loan Fee Type attribute defined on the Financial Aid Item Type setup. Once a Direct Loan record is created and based on the Financial Aid Item Type, the appropriate XML Interest Rebate tag is reported to COD. |
| Loan Fee Option |
Select the value that indicates how the amount of the loan fee is determined. Flat: The loan fee is a flat amount. If you select this value, you must select a Loan Fee Rule and enter the loan fee amount. Percentage: The amount of the loan fee is a percentage of the student's award amount. If you select this value, you must indicate the percentage in the Loan Fee Percent field. |
| Loan Fee Rule |
This field is available only if you select Flat in the Loan Fee Option field. The loan fee rule determines how the Packaging process distributes the loan fee amount among disbursements. All in 1st Disbursement: The entire loan fee amount is subtracted from the first disbursement. Weighted Across Disbursements: The loan fee amount is split among the disbursements according to the disbursement split code percentages. Loan fee options and loan fee rules are delivered with the system as translate values that cannot be modified in any way. The Packaging process bases certain calculations on these values and changing them would have unforeseen consequences. |
| Loan Fee Percent |
This field is available only if you select Percentage in the Loan Fee Option field. The loan fee amount is this percentage of the total award amount. |
| Loan Fee Amount |
This field is available only if you select Flat in the Loan Fee Option field. Enter the total loan fee amount. |
Processing Direct Loan Interest Rebate
The up-front Direct Loan interest rebate amount of 1.5 percent of the gross disbursement is calculated at the disbursement level for each Direct Subsidized, Direct Unsubsidized, and Direct PLUS loan. The rebate amount is added after the 3 percent loan fee is subtracted from the gross disbursement amount. For example, a student receives a Direct Loan of 1,000.00 USD for the fall 2004 term. The net disbursed amount is 985.00 USD because the 3 percent loan fee of 30.00 USD is deducted from the gross amount of the loan, and the 1.5 percent rebate of 15.00 USD is added back into the loan.
The Packaging process calculates loan fee amounts for each loan award in a student's financial aid package. These loan fee amounts are set up on the Loan Fee Table page and can be a flat fee or a percentage of the award amount. When setting up the loan fee for the interest rebate feature, you must establish the interest rebate with a loan fee type of R—Rebate. Each loan financial aid item type can have various loan fees associated with it.
The Packaging process evaluates the loan fee type. The interest rebate loan fee type is processed differently than other loan fee types. The system processes interest rebate loan fee types using the Department of Education's recommended formula. An interest rebate loan fee is processed after all other loan fees have been applied to the loan award.
The interest rebate amount, as calculated by the Packaging process, is written to a field on the various packaging and awarding tables. Each Direct Loan financial aid item type disbursement balance has an associated interest rebate amount and an associated loan fee amount.