In our recent flash survey on Trends in FFELP vs. Direct Lending, we garnered advice from those who are currently participating in the DL program. Since a Financial Aid administrator indicated today that this information was helpful, I thought that I would publish it on the blog.
Here is what they had to say (all responses came directly verbatim from the survey):
Allow for sufficient
time to implement
- Allow
plenty of time to test
- Do
your research--this should not be a quick switch-be sure to publicize to
ALL affected parties (not just students)-we recommend an 18 month
transition period.
Rely on your peers
who have made the transition..software platform matters
- Call other schools in your area for advice.
- Talk to an established school already in Direct Lending (the Direct Loan Coalition has a list of school volunteers) to talk to them about the program and ask questions. I have talked to a number of schools about DL and cannot believe the number of misconceptions there are floating around. It really is true that if you can process Pell Grants, you can process Direct Loans.
- Use the expertise of other Direct Lending schools. Find friends who use Direct Lending well to understand best practices before you implement. Secure good technical support up front. Less will be needed later.
- Use the resources of the National Direct Student Loan Coalition to facilitate your transition to the best loan delivery system available.
- Make sure you have institutional resources to support the conversion activities, especially in the technical area.
- Talk with your colleagues who use the same software.
Understand how Direct
Lending will impact your existing IS platform and ensure you have adequate
resources
- Make
sure you have institutional resources to support the conversion
activities, especially in the technical area.
- Direct
Loans are processed just like Pell through COD - consider it a Pell with a
prom note - that is how easy it is to administer.
- Find out how Direct Lending needs to be integrated into your institutional computing system before making the switch.
- Get good information and advice about using your current mainframe system with the Direct Loan Program or use the Dept. of Ed's software and interface it with your mainframe. Have good working relationship with your IT people. At first you will depend on each other alot to learn the DL processing.
- If you do Pell, DL will be a very familiar process and should fold right into what you presently do
- If your MIS supports the DL program, we highly recommend this delivery system. It's streamlined our administrative operations and provides financial advantages to student and parent borrowers that we're seeing less and less of from FFEL lenders
- Processing loans in Direct Lending is very easy now that schools are already processing ACG, SMART and TEACH in the same system as Direct Lending.
- DL offers more options than in the past. They will mail a prom note to a borrower, we don't have to. Most of our students complete the eMPN, but the mailing serves as a reminder for those who missed this step. In addition, loans cannot be disbursed unless a MPN is on file. This makes reconciliation easier and many school data-management systems now offer many electronic options to run reports and monitor for errors.
Reconciliation
- It isn't as difficult to set-up, run and reconcile as people make it out to be.
- Keep up with all reconciliation reports. Makes end of year reconciliation easy
- This is our first semester being DL so we are still learning how to do the reconciliation.
Miscellaneous
- Don't underestimate the work involved, but it is *so* worth it in the end...
- Customer service to students and schools could be improved. I understand that they are aware of these issues and are working on them.
- GO FOR IT. MUCH LESS WORK, MONEY TO STUDENTS MUCH FASTER.
- Hurry
- It will save on administrative cost to the school.
- It is extremely easy to convert. Also, the school controls the entire process which makes everything much more predictable.
- It's liberating.
- No lender list monitoring...
- One lender
- Only switch if there is a compelling reasons, otherwise, you will wind up roughly where you started.
- Plan
well
- Since we have been using it a short time, I am not sure if the issues we have are due to Global FAS as our processer or direct lending, or both.
- The program is easy to manage.
- We started in Direct Loans in 1995 and have never looked back. It was tough to stay when the lenders had better incentives, but the functionality and ease of Direct Lending was not worth the pain of balancing all the multiple FFELP lenders, servicers, etc.
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