The Department of Education will implement several Common Origination and Disbursement (COD) System updates on June 28, 2026, affecting Direct Loans and Campus-Based Programs for the 2026–27 award year. These changes are designed to improve the administration of new federal loan limits and streamline reporting requirements for schools.
Enhanced Loan Limit Exception Processing
The most significant update involves the loan limit exception (grandfathering) for Direct PLUS Loans for parents and Direct Unsubsidized Loans for graduate and professional students. After receiving feedback from institutions, Federal Student Aid is refining the logic used to determine whether students qualify for an exception to the new loan limits that take effect July 1, 2026.
Under the updated process, COD will more accurately identify students who were enrolled in an eligible program before July 1, 2026, and who have prior qualifying loan history, reducing the need for manual exception requests.
New Enrollment Status Effective Date Requirement
To support the enhanced exception process, schools will be required to report a new Enrollment Status Effective Date field for all new Direct Loan disbursements beginning with the 2026–27 award year.
This date represents the most recent date a student was enrolled in a program at the institution and will become a key factor in determining eligibility for loan limit exceptions. While COD will initially suppress rejections for missing dates, schools are encouraged to begin reporting the field as soon as possible and no later than August 8, 2026.
New Enrollment Status Codes
Two new enrollment status values will be introduced for Direct Loan reporting:
- W – Withdrawn
- A – Leave of Absence Over 180 Days
Students reported with either status who were previously eligible for a loan limit exception will lose that eligibility and become subject to the new loan limits.
Simplified Transfer Student Processing
COD will no longer use the Program Attendance Begin Date to identify undergraduate students transferring associate degree credits into bachelor’s degree programs under articulation agreements. Schools may continue submitting the field, but it will no longer impact processing.
Report Updates
Several COD reports will be updated for 2026–27 and future award years, including:
- Direct Loan Rebuild Disbursement Detail Record
- Discrepant Loan Data Report
The new Enrollment Status Effective Date field will be added where applicable, and enrollment status values will be updated to reflect the new codes.
Campus-Based Program Enhancements
In addition to Direct Loan changes, COD will:
- Launch the 2027–28 Campus-Based application cycle beginning August 1, 2026.
- Continue accepting Federal Work-Study XML records using the 1.0b schema, expanded to include the 2025 calendar year and 2025–26 award year reporting.
What Schools Should Do Now
Financial aid offices should review their systems and business processes to ensure they can capture and report the new Enrollment Status Effective Date field and accommodate the new enrollment status codes. Early preparation will help institutions avoid reporting issues as the new loan limit exception rules take effect.
FSA will suspend COD batch processing from midnight until 11 a.m. Eastern time (ET) on Sunday, June 28, 2026, to implement the COD System functionality. During the outage, FSA will hold any records that schools submit and process them when the outage is over.
In addition, during the outage, users will not be able to
- submit or retrieve data via the COD website, and
- access the “COD Reports” area of the COD website.
FSA released an attachment titled, “COD System Changes for 2026–27 (June 2026) in PDF Format,” that highlights the system changes they will be implemented on June 28, 2026.
SOURCE: (COD-26-05) Additional COD System Implementation for 2026–27 Award Year (June 2026)