October 6, 2010

Direct PLUS Endorser Processing

The Department of Education (ED) released a Sept. 23 electronic announcement that supplements information from the April 23 DL PLUS loan processing announcement. The recent announcement provides guidance on the information sent to schools by the Common Origination and Disbursement (COD) system when there is an approved endorser for a PLUS loan.

Before March 17, 2010, when an endorser was approved for a PLUS loan award, the COD sent a credit override response file to the school with a code of “E” for endorser regardless of whether the endorsed amount was less than or equal to the original loan amount. COD would then accept disbursement records up to the endorsed amount.

After March 17, 2010, when an endorser is approved for a PLUS loan award, the COD returns different information depending on several factors. ED provided a supplemental attachment PDF to explain the information and how the loans would be processed.

ED is developing changes to improve the endorser process and intends to offer a solution by early 2011 to eliminate the dual meaning of “D” in the credit override code tag.

This guidance may not apply to every situation at every school, because individual schools may have:

• Their own procedures for processing PLUS loans.
• Their own procedures for working with endorsers.
• Differences in the third-party software products used to process DL awards.

If you have questions about this announcement, contact COD at 800.848.0978 or codsupport@acs-inc.com.