# Presentation: 803782

## Direct Loans:Balancing the Books for 2003-2004and Beyond

- Isiah Dupree
- Wendy Jerreld

**Session 6**

## Direct Loan Monthly ReconciliationAnd Program Year Close Out

***Rapid Reconciliation***
*** ******and Program Close Out***

***Direct Loans:  Balancing the Books ***
***for 2002-2003 and Beyond***

***COD and Direct Loans:***
***Balancing the Books***

- Direct Loans:Balancing the Books for 2003-2004and Beyond

## Why is the Monthly Reconciliation Processand Program Year CloseoutSo Important?

## These are our ultimate Customers

## Picture of Student/Borrowerreceiving an incorrect billfrom The Direct Loan Payment Center

## Summary of the Various Areas that Affect Reconciliation

- Managing Cash
- Disbursements and Adjustments
- Booking a Loan
- Monitoring Your Process

## To understand monthly reconciliation, we must first understand the cash management life cycle and our own daily processing....

- Managing Cash

## Cash Management Life Cycle

**COD**

**Borrower**

**Treasury/FRB**

**GAPS**

**DLSC**

**Follow the Money**

***Reporting***

**School**

## Cash Management Life Cycle

**COD**

**GAPS**

- Request Funds

***Cash***** *****Receipts***

***Disbursements***

***Adjustments***

***Refund of Cash***

***Refund of Cash***

***Cash Trans***

- Cash Receipts
- Refunds of Cash

- Disbursements
- Adjustments

## Managing CashCash Receipts

**For more information, review 34 CFR, 668.161-163**

- Requesting Funds
- Advance Pay – https://e-grants.ed.gov/gapsweb/, or GAPS Hotline at 888-336-8930
- Pushed Cash – Based on actual disbursements
- Receiving Funds
- Direct deposit to school bank account

## Managing Cash – Timely Disbursement of Funds

- Disbursing Funds
- Substantially equal disbursements
- 30 day delay for 1st time borrowers
- Late Disbursements

**For more information, review 34 CFR, 668.164-165**

## Show Me the Money: How to Get and 

- Maintain Funding for Pell Grants,
- Campus-Based, and Direct Loans

**Session**

## Managing Cash – Timely Disbursement of Funds

- Funds must be disbursed to borrowers within 3 business days.

**For more information, review 34 CFR, 668.164-165**

## Refunds of Cash

- Reasons
- Received more funds than disbursed
- Disbursement Adjustment to Borrower’s Account
- Regulations – Returning or reusing funds
- Methods of Return
- Electronically through GAPS (http://e-grants.ed.gov/gapsweb/)
- Check – Mail to:	COD School Relations Center	Attn: Refunded Cash	P.O. Box 9001	Niagara Falls, NY 14302

**For more information, review 34 CFR, 668.166**

## Payment to Servicing

- Does not impact school’s cash balance
- May be made by school or by borrower
- Should be sent to:	U S Department of Education	Direct Loan Servicing Center	ATTN:  Payment Center	P.O. Box 530260	Atlanta, GA 30353-0260
- Note:  Please make sure you indicate clearly the student’s name and loan ID number and that this is a PAYMENT, not an adjustment, to the student’s loan.

## Reporting Disbursement& Adjustments

**Pushed Cash Schools**
- Submission and acceptance of disbursement
- 	records is critical for Pushed Cash Schools
- 	because NO Accepted Disbursement Records
- 	= NO FUNDS!!!
**	**

**For more information, review 34 CFR, 668.164-165**

## Disbursement Adjustments

- Reasons
- Eligibility Changes
- Return at Borrower’s Request
- Reporting Adjustments
- 30 days from date of Adjustment
- Returning or recycling funds

**For more information, review 34 CFR, 668.164-165**

## Reporting Disbursement& Adjustments

**Downward Adjustments to Borrower’s Accounts must be accompanied by:**
- Returning funds as a refund of cash
- Reusing/Recycling funds for another eligible borrower
**	**

## Booking a Loan

**Booked vs. Unbooked Disbursements**
- Award, MPN, Disbursement = Booked
- Disbursements must book to transfer liability to the Department

## Computing Your ECB: The Direct Loan Cash Equation

**+**

**-**

**=**

**-**

**-**

- * Downward Adjustments are negative; upward adjustments are positive.

## Computing Your ECB: The Direct Loan Cash Equation

**Ending**
**Cash**
**Balance**

**Unbooked**
**Disburse-**
**ments**

**-**

**Cash > **
**Accepted**
**& Posted**
**Disbs**

**=**

**Unbooked**
**Adjust-****ments***

**-**

- * Downward Adjustments are negative; upward adjustments are positive.

## Monitoring Your Process

**Organize – Finish What You Start**** **

**Monitor Your Cash Flow**

**Use Your Reports**

**Perform Internal Reconciliation**

## Organize

**Finish What You Start**
- Map your process and procedures
- Monitor your process
- Ensure all records have been sent to and accepted at COD
- Consider managing timing issues to finish what you start within the month

## Monitor Your Cash Flow

- Ensure cash receipts are posted to the correct year
- Verify requested funds have been received
- Comply with cash management timelines
- Ensure that all funds received are either disbursed or returned
- Verify correct addresses are used when returning funds

## Use Your Reports

- 30 Day Warning Report (COD)
- Booked Status Report (EDExpress     or custom)

## Use Your Reports

- Pending Disbursement List
- (EDExpress: List - Edit-Only Disbursements)
- Funded Disbursement List
- (EDExpress: List - Actual Disbursements)

## Use Your Reports

- Actual Disbursements – Booked and Unbooked Report (DL Tools)
- Cash Summary Report (DL Tools – optional)
- Ledgers, Bank Statements, Cancelled Checks
- Other Internal School Reports

## Perform Internal Reconciliation

- Compare Business Office/Financial records to Direct Loan System
- Develop procedures/schedule for internal reconciliation and assign responsibilities
- Compare based on overall cash/disbursement totals and/or student detail
- Troubleshoot discrepancies

## Monthly Reconciliation

- School Account Statement (SAS)
- Contains the Department’s official ending cash balance for your school
- Meets regulatory requirements for monthly reconciliation file.
- Generated the first weekend of the month, with data through end of previous month
- The SAS comes out with a number of options already selected by default but schools can customize many of those.

## Monthly Reconciliation

- The School Account Statement and how schools should use this report is covered in Session 7, Direct Loans: Reconciliation, Putting the Pieces Together - A Case Study

## Program Year Closeout

- New Automated Process for Program Year Closeout
- Balance Confirmation Screen
- School Correspondence Screen
- Funding Information Screen
- School General Screen

## Balance Confirmation Screen		

## Balance Confirmation Screen

## Balance Confirmation Screen

- Current Year Program Closeout Data
- Provides the school’s current financial details
- This is updated every evening during the systems daily processing.
- Balance Confirmation Form
- Provides school contact information
- Provides COD’s ending cash balance
- Allows users to agree or disagree to the balance

## Balance Confirmation Screen		

- When to use the screen
- Use it throughout the year during monthly reconciliation
- Use it to confirm closeout
- Must have received a Zero Balance Letter
- For 02/03—If school has not been granted extended processing.
- Print the screen and indicate at the bottom you agree to the balance and fax to Customer Service.
- 1-877-623-5082  attn: Reconcilation

## School Correspondence Screen

## School Correspondence Screen

## School Correspondence	

## School Correspondence

- Closeout Correspondence
- Remaining Balance Letter
- Email sent to Financial Aid Administrator
- Zero Balance Letter
- Email sent to Financial Aid Administrator
- Notification Warning letter
- Paper Letter sent to the President and Financial Aid Administrator
- Program Year Closeout Letter
- Paper Letter sent to the President and Financial Aid Administrator

## School Correspondence	

- Other Closeout Letters that schools may receive
- Negative Balance Letter
- Generated for schools who have not confirmed closeout and the award year is closed and the school has a negative balance.
- Change to Zero Balance Letter
- Generated when the school make an invalid attempt to confirm closeout or the school’s ending cash balance has changed after they confirm closeout

## Funding Information Screen

## Funding Information Screen

- Two new fields for Program Year Closeout
- Date School Confirmed Program Year Closeout
- Date Department of Ed Confirmed Program Year Closeout
- For 02/03
- Only the Date Department of Ed Confirmed Program Year Closeout will be populated due to current manual process

## School General Screen

## School General Screen

- Extended Processing
- View the begin and end dates of the extended processing that has been granted by FSA.
- View the reason the school asked for extended processing.
- Schools with COD system issues have a reason of Other.

## What Happens After 

- School is Closed?

- Closeout Letter is Generated
- Reports are shut off
- CFL will be reduced to Net Drawdowns/Payments

## The web will no longer allow a user to create/update information. 

- The web will no longer allow a user to create/update information.

- What Happens After
- School is Closed?

## Program Year 2002/2003Close Out 

- Number of Schools Closed – 730
- Number of Schools Not Closed – 475
- Number of School on Extended Processing - 37

## Additional Information

- Session 7, Direct Loans: Reconciliation, Putting the Pieces Together - A Case Study
- Day 2, 10:45 am -12:00 Noon
- Day 3, 1:45 pm – 3:00 pm
- Day 4, 1:15 pm – 2:30 pm
- PC Lab
- COD Customer Service
- Direct Loan Operations

## Questions ????