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Title IV Loan Origination Fees Change on October 1st

On October 1st, Title IV loan origination fees will change to new percentages. Incorrect origination fees lead to errors with COD and a lot of extra work, so here are some tips to help you navigate the deadline successfully.

Populi calculates the correct origination fee for each award by checking the scheduled date of the award's first disbursement. It then uses the appropriate origination fee percentage depending on whether that date is before or after October 1st. The first disbursement date determines the origination fee for the rest of the disbursements of that award, whether or not they're scheduled after October 1st.

Provided you actually disburse the payment before October 1st, you will not have any problems syncing with COD. However, owing to some quirks in the COD system, you'll run into problems if you disburse such payments on or after October 1st—that's because COD cannot change origination fees for an originated award without zeroing it out first.

For example, let's say you've originated a Subsidized Direct Loan for Sally Student and have scheduled the first disbursement for September 30th. Populi will calculate the net amount of the award using the correct origination fee; as long as you disburse on September 30th, everything will work just fine.

Problems arise if you wait until October 1st (or afterwards) to disburse the award. That's because COD has already accepted the origination, and in so doing, "locked" the origination fee for that award. If you disburse in the new period, however, the award now has the wrong origination fee!

To fix such problems, you'd need to:

  1. Zero out Sally's award in Populi and sync that to COD.
  2. Wait 24 hours for COD to reset itself.
  3. Rebuild Sally's award in Populi with the new origination fee and sync to COD.

If you've disbursed the award and posted it to Sally's account in Populi, the net amount of the award may be off by a few dollars, at which point fixing the issue becomes much more complicated.

You can avoid a lot of extra work simply by following this rule: if you tell COD that you are going to disburse funds before October 1st, make sure you actually disburse before October 1st!

If you have any questions, please contact Populi customer support!

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