# Presentation: 308532

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## Session 41

***Direct Loan Reconciliation/Closeout Best Practices***

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## What is Reconciliation?	

- Payoff for conscientiously applied program of data hygiene and regular professional care (but more often than every 6-months!)
- Monthly balancing of school’s Direct Loan books
- Cosmic state of balance between the school’s and LOC’s database

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## What Is Closeout?

- Successful conclusion to brilliant handling of everyday DL affairs.
- Everything I got, I either gave out or gave back.
- An Ending Cash Balance (ECB) of Zero.

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## Session 41

***Presenter:  Kim Jordan***
***State University of West Georgia***
***Carrollton, Georgia***

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## Institutional Profile

- State University of West Georgia
- Undergraduate and Graduate
- Year 2 school
- Banner System
- $13,000,000

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## Processing

- Daily
- Origination
- Promissory Notes
- Change Records

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## Processing

- Weekly
- Disburse to student accounts
- Drawdowns
- Notify students of disbursements
- Check P-Notes not acknowledged
- Sent disbursement records to LOC
- Disbursement reject reports
- Run various “Clean Up” reports

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## Processing

- Monthly
- 30-Day warning report
- Balance Banner to CUFA
- Compare internal cash drawdowns to DLSAS
- Compare loan detail from DLSAS to loan disbursement reports

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## Processing

- Special Reports
- Fund list for all Direct Loans – Compare Originated amount to disbursed
- Report of all loans not showing an accepted status
- Report of all loans needing a P-Note of entrance session

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## Processing

- Special Reports
- Report of students who have received disbursements greater than origination amounts
- Overaward report

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## Helpful Hints

- Make sure to reduce amount on GAPS as funds are recovered
- Document very carefully!
- Keep all reports for audit purposes
- Keep in close contact with your CAM
- Keep in close contact with LOC CSR

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## Session 41

***Presenter:  Lisa McCleary***
***University of Georgia***
***Athens, Georgia***

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## Institutional Profile

- The University of Georgia
- Undergraduate, Graduate, Law, Veterinarian Science, and Pharmacy programs
- Enrollment 30,000

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## Direct Loan Profile

- Year 2 school (95/96)
- Level 1/Option 2
- $71,000,000+ disbursed annually
- Mainframe school Yr2-Yr6
- COMBO school Yr7->

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## Processing

- Daily
- Origination
- P-Notes
- Change Records
- Weekly
- Disbursements
- Drawdowns

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## Processing

- Monthly
- Reconciliation to Accounting
- 30-Day warning report
- 732 data match
- DLSAS

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## Helpful Hints

- Follow up on disbursement errors immediately
- Internal records must be reconciled in a timely manner

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## Session 41

***Presenter:  Nellie Snyder***
***Piedmont College***
***Demorest, Georgia***

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## Institutional Profile

- Piedmont College
- Demorest, Georgia
- Private College
- Bachelors and Masters Degree
- Enrollment: 1,700 (degree)

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## Direct Loan Profile

- 100% Direct Loan participation
- First year: Year 2 (95/96)
- 1,100+ loans disbursed annually
- $5,000,000+ disbursed annually

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## Administrative Profile

- 1 Financial Aid Director
- 1 Assistant Financial Aid Director
-  2 Financial Aid Coordinators
-  5 Student Workers (Work Study)

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## Daily/Weekly  Processing

- Daily Processing
- P-Notes
- Originations
- Change Records
- Weekly Processing
- Disbursements
- Drawdowns

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## Monthly Processing

-  30-Day Warning Report
** **Compare EDE Actual Disbursements to DB Actual Disbursements

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## Monthly Processing

- 3 Spreadsheets include:
- DB-LOC Match (loan balance gross/fee/net comparison)
- DB- Loan Detail (gross/fee/net/ date by disbursement)
- Unbooked loans

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## Other Tools	

- SFA Reports
- Our Database generates reports which allows the user to query system and receive reports

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## Helpful Hints

- Reconciliation begins when the first loan is disbursed
- Reconcile with each Drawdown
- Cross reference reports
- Maintain close communication between the Business Office and Financial Aid Office

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## More Helpful Hints

- Invest in time and train Student Workers
- Work with Computer Information Systems
- Take advantage of the LO website
- Be patient yet persistent!

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## Session 41

***Presenter: Kimberly Lachman***
***The City University of New York***

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## Institutional Profile

- The City University of New York
- NYC 5 Boroughs: Bronx, Brooklyn, Manhattan, Queens, Staten Island
- 19 Public Colleges
- Associate, Bachelors, Masters, Doctoral, Law
- Enrollment: 200,000 (degree), 150,000    (non-degree)

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## Direct Loan Profile

- 100% Direct Loan participation/18 colleges
- First year: Year 2 (95/96)
- Level 1/Option 2
- 30,000+ loans disbursed annually
- $102,000,000+ disbursed annually

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## Administrative Profile

- 19 college FA offices with a DL Coordinator at each institution
- 2 Central processing offices
- University Application Processing Center (UAPC)
**CUDLS (City University DL System)**
**P-Notes**
**Originations**

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## Administrative Profile	

- 2 Central processing offices (cont.)
- University Accounting Office (UAO)
**SFA (Student Financial Aid System)**
**Disbursements**

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## Daily/Weekly  Processing

- Daily Processing
- P-Notes
- Originations
- Change Records
- Weekly Processing
- Disbursements
- Drawdowns/Excess Cash
- Disbursement Rejection Report

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## Monthly Processing

- 30-Day Warning Report
- Distributed to college loan coordinators for review
- DLSAS
- Used to compare monthly cash detail to internal accounting records
- Loan detail not received

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## Monthly Processing

- 732 Data Match
- Custom designed mainframe compare program for loan detail, cash detail and cash summary
- Discrepancy report imported to Excel to create 4 spreadsheets

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## Monthly Processing

- 4 Spreadsheets include:
- CUNY-LOC Match (loan balance gross/fee/net comparison)
- CUNY Loan Detail (gross/fee/net/action date by disbursement)
- Unbooked loans
- Cash Summary Match

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## Other Tools	

- SFA Reports
- Mainframe report generator allows the user to query system and receive reports
- Direct Loan Meetings
- Monthly meetings of DL coordinators with representation from each college and Central Office to discuss federal regulations, technical changes, processing problems, etc.

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## Helpful Hints

- Reconciliation begins when the first loan is disbursed
- Document all correspondence (verbal and written) during the reconciliation process
- Cross reference reports
- Maintain close communication between the offices responsible for DL processing

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## More Helpful Hints

- The CSR should be familiar with the processing and operating procedures at the college
- Don’t underestimate the power of your CAM
- Take advantage of the LO website
- Be patient yet persistent!

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## Session 41

***Presenter: Doug Bullock***
***Chandler-Gilbert Community College***

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## Institutional Profile

- Chandler-Gilbert Community College		-Chandler, Arizona
- Two Year Public
- One of 10 Colleges within the Maricopa Community College District in Phoenix
- One College, Three Locations
- Transfer, Associate, Certificate Programs
- 6200 Students

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## Direct Loan Profile

- 100% Participation
- First Year - 1995-96
- Level 1/Option 2
- 500+ Loan Recipients Annually
- $1.8+ Million Disbursed Annually
- Mainframe/PC           					-EDExpress Software

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## Administrative Profile

- Primary Processing
- Fin Aid Office
**Staff of Four**
**One Primary DL Coordinator**
**Loan Record Processing**
**Exporting/Importing**

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## Administrative Profile 

- Supplemental Support
- District Office
**Destination Point**
**Drawdowns****	**
**Programming**** **

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## Direct Loan Processing

- Daily Creation of Loan Records
- Weekly Export/Import of Files
- Orig
- P-Notes
- Disb
- Overnight Delivery of P-Notes to LOC

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## Direct Loan Processing

- Resolve Discrepancies ASAP
- Utilize DL Reports
**Compare with Local Reports**
**30 Day Warning, 732 Reports, DL Volume Report**
- Contact LOC Directly
- Make Corrections/Changes
- Follow Up
- Request Drawdown of Funds/Confirm with DLSAS Reports**	**

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## Recommendations

- Automate as much as possible
- Export/Import on a regular basis
- Resolve discrepancies ASAP
- Utilize all available resources

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## More Recommendations

- Talk to LOC as often as necessary
- Train Staff/Communicate Often
- Follow up, Follow up, Follow up
- Work long hours

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## Session 41

***Presenter: Wood Mason***
***Client Account Manager***
***Atlanta, GA***

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## Common Threads 

**Follow up**
**Clean up**
**Reports**
**FIX!**
**DLSAS**
**30-Day Warning Report**

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## DLSAS 

**LOC generated report**
**Message class DSASxxOP.xxx**
**3 parts**
**Cash summary**
**Cash detail**
**Loan detail**

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## DLSAS 

**Monthly reconciliation is a required task**
**DLSAS ED specified tool to use to accomplish monthly reconciliation**
**Monthly “snapshot” of cash and disbursement activity of school**

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## Reports 

**Internal**
**List Loans**
**Anticipated/Actual Disbursements**
**List P-Notes**
**List Cash **
**LOC**
**30-Day Warning**
**Loan Detail Exception Report**

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## Session 41

***Presenter: Misty Parkinson***
***Client Account Manager***
***New York, NY***

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##                                         Monthly Reconciliation          	

- The process by which a school’s Direct Loan ECB as reported by the Loan Origination Center (LOC) is reviewed by the school and compared with the school’s internal records on a monthly basis.  Schools should resolve all discrepancies.

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##               Program Year Closeout

- The process of reconciling all school information to the information contained at the LOC, and of bringing all ending cash balances to zero.

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## LOC Monthly Reports	

- DLSAS
- 30-Day Warning Report
- 732LOS
- Summary
- Cash and Loan Detail

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## What Is the 30-Day Warning Report?

- Report sent by the LOC to assist schools with the identification of unbooked loans.
- Sent to schools monthly
- Report can be imported into EDExpress
- Message Class is DIWRxxOP

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## The 30-Day Warning Report

- Lists “active” S, U and P loans that have an accepted origination at LOC, but no PN and/or 1st disbursement
- Lists “active” P loans with a failed credit decision
- Lists PNs with no corresponding origination record

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## What Is the 732-LOS Report?

- Report sent by the LOC to assist schools with reconciliation and closeout.
- Sent to schools monthly as two separate text files:
- Summary file
- Cash and Loan detail file

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## The 732-LOS Summary File

- Includes YTD total balances for:
- cash receipts
- returns of excess cash
- booked disbursements and adjustments
- unbooked disbursements and adjustments
- ED’s official Ending Cash Balance.

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## The 732-LOS Detail File

- Contains YTD:
- Individual drawdowns and excess cash transactions
- Loan level disbursement information
- for each booked loan
- for unbooked loans with accepted origination records and disbursements

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## 732-LOS File Layout

- Message classes (99/00 and 00/01):
- ED13xxOP (summary)
- ED12xxOP (detail)
- Sent to schools as a comma delimited file that is:
- Easily formatted in Excel
- Template available
- Easily compared to schools database
- Access program available

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## The Formatted 732-LOS Summary

***The Formatted 732-LOS Summary***

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## The Formatted 732-LOS Detail (Cash)

***The Formatted 732-LOS Detail (Cash)***

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## The Formatted 732-LOS Detail (Loans)

***The Formatted 732-LOS Detail (Loans)***

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## What Is the Compare Program?

- Microsoft Access 97 database program
- Developed by DLCAMG
- Compares school and LOC cash and disbursement information electronically
- Generates reports to show matched and unmatched records
- Updated each year, and available for both EDExpress and non-EDExpress schools

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## What the Compare Program Can Do

- Determine loan records that need to be sent to the LOC
- Point out which loan data previously sent to the LOC needs to be corrected
- Identify outstanding loans that need to be booked

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## Where to Get Help

- The Excel Template and the Compare Program are available from your regional CAM
- Assistance with any Direct Loan issues can be obtained from your regional CAM, and/or your CSR at the Loan Origination Center

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***Session 41***

***Presenter: Brad Sirstins***
***Reconciliation Manager***
***LOC***

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**Notes:**
Some of my suggestions or “helpful hints” are repetitions of those mentioned earlier.  However, let me start with one that wasn’t mentioned.

## Hints from the perspective of the LOC

- Backup
- Backup
- Backup

- Backup your system
- Make sure the backup is taking place
- Test your backup to be sure it will work if ever needed

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**Notes:**
1) Backup your system. Get with your tech team to understand the procedure.

2) Make sure the backup is taking place.  Check it at least monthly.  Where are the tapes stored?  On site?  Off site?  What procedures are required to retrieve the tapes?  How long does it take to get the backup tapes?

3) Test your backup.  Restore the backup tapes to another drive or directory to be sure you know how to do it and that it works if (hopefully not) it is ever needed.  Do you have the necessary hardware in your office to effect a backup?  If not, where is the hardware?  Will you or the tech team be responsible for the backup?

## Monthly Reconciliation = Annual Closeout

- “Closeout is just another month.”
- Daily
- Weekly
- Monthly

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**Notes:**
Monthly reconciliation leads to a smoother closeout.  Period.

If you are the daily tasks each day, the weekly tasks each week and the monthly tasks each month, closeout is easy.

You are probably thinking right now “That’s easy for you to say.  You don’t have 10,000 students with loans.”  You’re right.  I don’t.  But I have 1,700 schools many of which have told me that their secret to annual closeout is that they work at it each day, week and reconcile each month.

Talk with your CSR, your CAM.  Stay in touch.  More on this later.

## Excess Cash

- Write the program year on the check
- Include the program year in the comments section of the wire
- DLB 00-19

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**Notes:**
Here is something that will help us process your excess cash....
...Write on the check the program year for which the cash is being returned to make it clear.
 99-2000 works
 Simply 1999 doesn’t
 Year 6 is good but to be absolutely clear, put 99-2000

Include the program year in the comments section of the wire if returning funds to the Wachovia account.

A Direct Loan Bulletin, DLB 00-19 went out in April and included not only the bank change information but an excess cash payment transmittal form as well.  Use it.  Fill it out and send it in with the check.  But just in case the check and the form get separated in the mail room, write the program year on the check.

## HELP!?!

- Who is your CSR?
- Who is your Reconciliation Accountant?
- Monitor ending cash balances
- Monitor batches
- 1-800-848-0978

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**Notes:**
Does everyone know who their CSR is?  Their name?  Their hours?  Their birth date?  Their children’s names and ages?    More importantly, does your CSR know this about you???

And talk with your Recon Accountant.  I know they will help.  Or else.
The Recon Accountants are monitoring the ending cash balances of the schools assigned to them and contacting those schools to help bring the balance to zero.  (We even keep lists: Top 10 Positive, Top 10 Negative.)

The Recon Accountants also monitor the batches to address -- and help fix -- any rejects.

Here is the phone number to the LOC.  Call it.  Enter your school code ant the call goes to assigned CSR.  If the CSR is busy on another call, it will go to another CSR who will be able to assist and, at least, get a message to your CSR that you called.

## Monthly Reports

- DLSAS
- 732-LOS
- 30 Day Warning Report

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**Notes:**
-Use the monthly reports.  The DLSAS and the 732-LOS.  The 30 Day Warning Report has also been mentioned.
-Woody said that he could not imagine why you’d not want the loan detail.  I made the same questioning statement of a school rep whose school has 30,000 plus students and will over $50 million in loans each year.  Her reasons were two:
First) “Can you imagine what my detail would look like?”
And second) (and I love this one!!) “We reconcile each month and don’t need it!”  (In case you missed it, that’s another plug for monthly reconciliation.)
-On the subject of the 732, we have heard you asking “Why do you send the 732 when we are closed out?”
We are working on a system or procedure to be ready in the first quarter of 2001 (I’ve been told February but don’t quote me), a procedure that will allow a school to mark a program year for which they no longer wish to receive the 732.  Yeah!!!  That’s the easy part.  What is being worked out now are the details.
 Will this take place through the web (preferably) or by a phone call?
How will the Department, the Account Managers, the LOC and the school - both the Business Office and the Financial Aid Office - all coordinate to ensure that the school is at a zero balance before the 732 is stopped?
It must be pointed out that the message classes will also be closed.  We don’t want to “close out” a school, stop the 732 and then receive excess cash, or a disbursement or a drawdown request.  Which leads to another detail being worked out:
 How can I have the message classes reopened should I need to draw down, disburse or for any other reason?

## LO Website

- You see what your LOC representative sees
- You get quicker resolution of rejects
- You can view batch activity detail, drawdown activity and excess cash detail

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**Notes:**
The LO Website has already been mentioned.  Let me plug it again.
This was demoed at the last EAC and again at the spring conference and has been very well received.  There is a breakout session - number 38 I believe - where you can receive additional information and instruction.  I’ll just be a commercial.

- You are able to see virtually what your CSR sees.
- You get quicker resolution of rejects.
- You can view batch activity detail, drawdown activity and excess cash detail.

In short, the website puts you in the driver’s seat and is a great tool in resolving issues.