Direct Stafford Loan Types and Management in CLASS

Loan Type Classifications and Program Codes

Loan type codes, also referred to as program codes, are essential identifiers that determine how an account is processed in the CLASS system. These codes must be reviewed on every account handled.

• D1: Direct Subsidized Stafford Loan.

• D2: Direct Unsubsidized Stafford Loan.

• D3: Direct Grad PLUS Loan.

• D4: Direct Parent PLUS Loan.

• D5, D6: Direct Consolidation Loan.

• D7: Direct PLUS Consolidation Loan.

CLASS System Screen Navigation

The CLASS system utilizes three-digit screen codes for navigation. Key screens include:

• 111 (Account Balance, Amount Due, School Data): Provides a comprehensive overview of the account including borrower demographics, total balance, 10-day payoff amounts, and school information.

• 113 (Loan Disbursement Data): Displays details regarding when and how funds were disbursed.

• 115 (Loan Directory): Lists all individual loans on an account with their respective statuses, interest rates, and balances.

• 116 (Cosigner/Reference Demographics): Contains contact information for domestic references, cosigners, and co-makers.

• 117 (Foreign Cosigner/Reference Demographics): Parallel to screen 116 but optimized for foreign addresses.

• 121 (Billing Summary): Used to manage billing groups and change payment due days.

• 122 (Payment Schedule Screen): Displays current repayment schedules for non-IDR/Term-based plans.

• 123 (General Demographics): Primary screen for updating borrower contact information and managing the foreign address indicator.

• 125 (Grant Deferment and/or Forbearance): Used to view, add, edit, or delete deferments and forbearances.

• 12T (Direct Lending IDR Payment Schedule): View current schedules for Direct Lending IDR plans.

• 135 (Effective Status History): Provides a chronological history of all statuses applied to the account.

• 137 (Payment Terms History): Tracks the history of payment disclosures and actual payments received.

• 13P (LSDSI Finance View): Used to verify current schedule begin dates for IDR plans, particularly when timestamps are required.

• 12N (Income Driven Repayment Application): Used to process and track the status of IDR applications.

• 151 (Borrower Correspondence History): A centralized log for all call notes, system-generated letters, and account changes.

• 181 (IDR Data Correction): Displays IDR eligibility flags, forced IDR indicators, and grade level data.

• 186 (IDR Repayment Calculator): Used to model and calculate payments under various IDR plans.

• 413 (Send Letters): The interface for manually generating and sending forms or letters to borrowers.

• 652 (ACH Billing Group Directory): Displays information regarding borrowers enrolled in Autopay (ACH).

Function Key (PF Key) Utility

Function Keys (PF Keys) allow for rapid navigation within CLASS. Options vary by screen but follow general rules:

• F1: Opens the Help Screen.

• F3: Returns to the previous screen.

• F5 (on screen 115): OPRIN/INT view.

• F6 (on screen 115): Accesses Dates view, showing separation dates and repayment plan codes (SCHD).

• F7 (on screen 115): Displays Delinquency information.

• F8 (on screen 115): Shows Amount Out information.

• F9 (on screen 115): Other Interest info.

• F10: Accesses Branch/Fee Assessment or the Loan Directory (LDIR).

• F13: Opens the Email information box for viewing/updating email addresses.

• F14: Opens the Person Phone Information box.

• Shift + Function Key: Adds 12 to the key number (e.g., $Shift+F3$ Shift+F6

Borrower Demographics and Address Validation

Account verification is critical to protecting Personally Identifiable Information (PII).

• Address Management: Updating an address is performed by typing over fields on screen 111 or 123.

• Address Indicators:

  • D: Domestic (USA) address.

  • F: Foreign address.

• Valid Address Indicator: A "Y" in the "Valid Addr" field indicates a verified address. An invalid indicator suggests lost contact or "Return to Sender" status from the post office. Invalid indicators stop activities like monthly statement issuance.

• Phone Number Updates: Pressing F14 on screen 111 opens the phone box.

  • PCON: Call consent status (Y for yes, N for revoke).

  • TCON: Text consent status.

  • STATUS: Options include Good, Bad, or Disconnected.

Co-Maker and Reference Management

• Co-makers: Two borrowers who consolidated loans together and share equal liability. These loans are consistently found on suffix $9$.

• Identification Codes (ID CD): Used on screen 116 to categorize third parties:

  • R: References.

  • I: Authorized 3rd Parties.

  • C: Cosigner/Endorser.

  • J: Co-maker.

Status and Repayment Plan Codes

Status codes define the current activity on a loan and must be reviewed to ensure correct task processing.

• RPMT: Repayment status.

• GRCE: Grace period.

• SCHL: In-school status.

• DSCH: In-School Deferment.

• DSTU: PLUS In-school Deferment.

• DGRC: Post-enrollment Deferment.

• FORC: National Emergency Forbearance.

• PIFB: Paid in full.

• PCNX: Canceled.

• PTRN: Transferred.

Repayment Plan Codes (SCHD):

• L: Standard Repayment.

• G: Graduated Repayment.

• H: Income-Based Repayment (IBR).

• LT: Tiered Standard.

• HA: Repayment Assistance Plan (RAP) - Active.

• JA: Repayment Assistance Plan (RAP) - Expired.

Income-Driven Repayment (IDR) Eligibility and Plans

• Eligible Loan Types: Direct Stafford ($D1$, $D2$), Direct Grad PLUS ($D3$), and certain Direct Consolidation loans ($D5$, $D6$) depending on underlying loans.

• Ineligible Loan Types: Parent PLUS ($D4$), Consolidated Parent PLUS ($D7$), and loans currently in an In-School or Grace status (unless Grace ends within $90$ days).

• Specific IDR Plan Details:

  • ICR (Income-Contingent Repayment): Introduced in $1994$. Balances forgiven after $25$ years. Payment caps based on standard/permanent-standard rates.

  • IBR (Income-Based Repayment): Introduced in $2009$. Forgiveness after $20$ years (new borrowers after $7/1/2014$) or $25$ years (borrowers prior to $7/1/2014$).

  • PAYE (Pay As You Earn): Introduced in $2012$. Forgiveness after $20$ years. Requires no federal balance as of $10/1/07$ and a disbursement after $10/1/11$.

  • SAVE/RAP: Introduced in $2024$. Forgiveness after $30$ years (for RAP). Payment is calculated on a sliding scale from $1\%$ to $10\%$ of adjusted gross income.

IDR Application Processing and Validity Rules

• Document Validity: The IDR Plan Request Form does not expire, but specific timing rules apply:

  • Application: Valid for $90\,\text{days}$ from receipt date.

  • Signatures: Must be dated within $90\,\text{days}$ of the application receipt date (before or after, but not future-dated).

  • ADOI (Alternative Documentation of Income): Must be dated within $90\,\text{days}$ of the application signature date.

• Signature Compliance: Written and electronic signatures are accepted. A mark is acceptable if a valid date is present. Dates may be in $MM/DD/YY$ or military $DD/MM/YY$ format.

• Borrower Intent Categories:

  • New Plan: Switching from term-based to IDR or between IDR plans.

  • Renewal (Recertification): Use screen 12W to check anniversary dates. Processing within $95\,\text{days}$ of anniversary date (or $120\,\text{days}$ with intent) sets the start date to the Permanent-Standard date.

  • Recalculation: Adjusting payments due to income changes. Can happen at any time.

Repayment Plan Start Date Logic

• Decreasing Payment: Plan starts ASAP. If the current month's due day has not passed, it starts that month; otherwise, it starts the next month.

• Increasing Payment: Plan starts $30\,\text{days}$ out (one full billing cycle later). CLASS may pend these requests with the code "19115 NEW RPMT PLAN MPA INCREASES".

• Loans in Grace:

  • Within $45\,\text{days}$ of grace ending: Start date is the first payment due date.

  • Within $45-90\,\text{days}$: Add a pending status code; start date is the first payment due date.

  • More than $90\,\text{days}$: Application must be denied.

Forbearance Types and Processing Rules

Forbearances are used to manage account status during transitions and delinquencies.

• FRPY: Covers prior delinquency when changing repayment plans.

• FRAX: Allows time for billing (starts on processing date, ends on next payment due date). Applied for $2\,\text{days}$ if processing on the due date.

• FTLQ: Applied to accounts more than $270\,\text{days}$ delinquent (starts on delinquency date, ends on day $270$).

• FAWN: Applied during application review (starts on processing date, ends in $60\,\text{days}$).

• FBLQ: Covers delinquency prior to a FAWN (starts on delinquency date, ends day before processing).

• FORN/FAST (SAVE Stay Forbearance): Applied effective $8/1/24$ during IDR processing pauses. It features $0\%$ interest until $7/31/25$ and currently extends until $2028$, though it may end $90\,\text{days}$ after a SAVE notice is received. It does not count toward PSLF or IDR forgiveness.

Procedures for Adjusting or Cutting Forbearances

Cutting durations allows borrowers to start making payments immediately if requested (Question $4$ on the IDR app).

• Same-Day Process: If due date equals processing date, end forbearance on the processing date.

• Immediate-Term Process: If begin date equals processing date, end forbearance the day after processing.

• Delinquency Buffer: If processing within $3\,\text{days}$ after the due date, end forbearance the day before processing.

• Billing Time Buffer: If processing $3$ or more days after the due date, end forbearance on the next due date to allow time for billing cycles.