# Presentation: 436826

## Electronic Funds Processing for Pell Grants and Direct Loans

- Presenters: David Chege
- 		    Anthony Laing
- 			  George Karayianis

***Session 38***

## Session Outline

- Dept of ED’s Grant Administration and Payment System (GAPS)
- Funding
- Overview
- Funding terms
- II.  	Pell funding
- III. 	DL funding
- IV.  	Cash management regulations
- V.  	COD funding web screens

## GAPS Functionality and Enhancements

- GAPS award numbers
- Electronic Refunds
- Drawdown Adjustments
- Reports
- View Access
- Payment Request File Upload

## GAPS Award Numbers

- CFDA prefix (ex: P)
- CFDA suffix (ex: 268, 063)
- Sub program identifier (ex: K, P)
- Year identifier (2003-2004)
- Institution identifier (ex: 2244)
- DL  =  		P268K042244
- Pell  =        	P063P032244

## Access E-Payments Website (http://e-grants.ed.gov)

## Logon to GAPS

## Select Refunds  from MainMenu

**Main Menu**
-  Hair Care and Nails
- 13 Ventura Blvd.
- Hollywood, CA 31221
- Please select one of the following options:

**Refunds**

## Check “refunds to open awards” and click  “initiate refunds”

**Refunds Menu**
- Hair Care and Nails
- 13 Ventura Blvd.
- Hollywood, CA 31221
- Please select one of the following options:

**Initiate Refunds**

## Select “continue”

## Awards and net drawswill be displayed

## Enter the amount(s) to berefunded and click “continue”

## Click “verify selected awards”

## Refund Confirmation

## Drawdown Adjustments

- Can’t move more than has been drawn.
- Net adjustment must equal zero.
- Do not use adjustments as a substitute for returning excess cash.
- Do not use adjustments to close out a year or bring your school’s cash balance to zero.

## Select Payment Requests from Main Menu

**Main Menu**
-  Hair Care and Nails
- 13 Ventura Blvd.
- Hollywood, CA 31221
- Please select one of the following options:

**Payment Requests**

## Select Direct Loan or Pell adjustments

**Pell**

**Direct Loan**

## View Open Awards

## Adjustments  between years and/or campuses

## Enter the amounts to be adjusted and click “OK”

## Click “yes” to process the request

## Adjustment Confirmation

## GAPS Reports 

- GAPS Reports
- Activity Report
- Cumulative Activity by award
- Detail Activity by day
- Refund Report
- detailed list of refunds including confirmation numbers

## From Main Menu select “Reports”

**Main Menu**
- Hair Care and Nails
- 13 Ventura Blvd.
- Hollywood, CA 31221
- Please select one of the following options:

**      ****Reports**

## Select “Activity Report”

## Activity Report Selection Screen

## Activity Report - Cumulative Summary

## Activity Report - Record Detail

## Select Refunds Report from Reports Menu

## Refund Report

## GAPS Access

- Full Access
- View Access
- Limit 5 user IDs of each access per school
- Download form off e-payment web
- Fax completed form to GAPS
- (202-205-0729)

## GAPS Helpdesk

- 1-888-336-8930
- Helpdesk hours of operation are 8 a.m.
- to 6 p.m. Monday through Friday, EST.

## COD Funding Process(Pell and Direct Loans)

- Disbursement records
- drive funding.
- Based on accepted
- disbursements, COD
- generates the author-
- ization and/or payment
- transactions to allow
- cash to go to schools.

- School

- COD

- GAPS

- Funding
- Authorization
- & payment
- transaction

- Disbursement record

##  Funding Terms

- Current Funding Level
- Net Draws
- Available Balance
- Refunds and Returns of cash

## Funding Terms(continued)

- Net Accepted and Posted Disbursements
- Cash greater than Accepted and Posted Disbursements
- Cash greater than Accepted and Posted Disbursements and more than 30 days.

## Pell Funding Terms

- Pell Grants
- Obligation/Authorization = Current Funding Level (CFL)
- Cash = Drawdowns in GAPS

## Current Pell Grant  CFL (Obligation) Process

- Initial CFL created in May.
- Schools cannot draw cash in GAPS that exceeds their CFL.
- Schools submit disbursement records to COD that adjusts CFL within 7 days.
- CFL level in  GAPS is not increased until initial CFL has been exceeded.

## Pell Funding in COD

- CFL is adjusted based on actual disbursement records
- Records are accepted no more than 30 days prior to the disbursement date
- CFL is increased no more than 7 days prior to the disbursement date

## Pell School Example

- Initial CFL = $5 million – First ESOA (5/03)
- Total Accepted and Posted  = Disburse-ments = $2 million – NO ESOA  (8/03)
- Difference = $3 million – Available balance in GAPS (8/03)
- Net Disbursements Records
- = $4 million (10/03)
- CFL
- = $6 million - New ESOA (10/03)

## Electronic Statement of Account

- GAPS AWARD NUMBER                                           		P063P034444
- 	Previous Pell Grant Obligation				$5,000,000.00
- 	Current Pell Grant Obligation				$6,000,000.00
- 	Adjustment (Increase + or Decrease -)			$1,000,000.00+
- 	Previous Pell Grant Obligation/Payment			$0.00
- 	Current Pell Grant Obligation/Payment			$0.00
- 	Adjustment (Increase + or Decrease -)			$0.00
- 	GAPS Drawdowns/Payments    			$5,000,000.00
- 	Date of Last Activity in GAPS	     			10/06/2003
- 	YTD Total Unduplicated Recipients	      		3,333
- 	YTD Pell Accepted and Posted Disbursement Amount	$6,000,000.00
- 	YTD Administrative Cost Allowance			`$16,665.00
- 	As of Document ID/Batch ID	  		200312345619990101123000
-  	Payments Apply only to “:Obligate/Pay” Accounts

## CFL (Obligation)  Adjustments

- School Generated
- Schools submit increases and decreases throughout the year
- System Generated
- Administrative Cost Allowance (ACA)
- Negative pending
- W Verification
- Potential Over-award Project (POP)
- Financial Aid Office and Business Office reconcile as of September 30

## Pell Grant Funds Control

- Initial CFL (May)
- Reduction to level of accepted and posted disbursement records (February)
- Post deadline adjustments (after 9/30 - administrative relief, audits, decreases)
- Reduction to level of net GAPS drawdowns (end of second year)

## Pell Funding Reconciliation

- Date         CFL    =    Disb Records  =       Cash
-                (COD)            (COD)               (GAPS)

| 11/03 | $1,000,000 | $750,000 | $500,000 |
| --- | --- | --- | --- |
| 2/04 | $750,000 | $750,000 | $500,000 |
| 3/05 | $500,000 | $750,000 | $500,000 |
|  | $500,000 | $500,000 | $500,000 |

## School Funding Info web screen (Pell)

## Example of how negative balances can occur.

- School CFL (obligation) = $5 million
- Net drawdown in GAPS = $5 million
- Available balance in GAPS = $0
- School submits negative disbursement of $5,000
- Negative balance of $5,000

## Resolve Negative Balances

- Refund the cash
- Adjust the drawdown
- Increase the CFL (obligation)

## Funding Methods

- Advanced Pay
- 	Schools draw down in GAPS the
- 		cash  they need to disburse
- 		within the next 3 business days.
- Push Cash
- Schools can choose to have COD initiate drawdowns on the school’s behalf based on accepted actual disbursement records.

## Direct Loan Funds Control

- CFL  = obligation.
- CFL not limited by obligation but related to disbursements.
- CFL increases as school submits disbursement records timely.

## CFL Process for DL Advance Funding Schools

- Initial CFL created at Beginning of Program Year (Feb).
- CFL increases as a school submits disbursement records to COD.
- Schools draw down their current cash needs in GAPS.

## Funding for DL Pushed Cash Schools 

- Funding driven by actual disbursement records.
- Funded Disbursement Listing (FDL) is generated by COD.
- Net cash electronically sent to school’s bank account.

## Ex:  Funded Disbursement Listing 

- Run Date:  11/2/03	                     US Department of Education			 Page:  1
- Federal Direct Loan Program
- Funded Disbursement Listing Report
- For Loans to be Funded by:  11/1/03
- For Academic Year 2003-2004
- School:  George’s Hair Salon                                                                         _** **_School Code:  G11111
- 	13 Maple Pl.
- 	Washington, DC 20202
- Student             Loan ID	             Disb Date          Gross	 Fee     Rebate        Net Amt.
- Sally Mae       233234454S04G11111001     11/2/03          $2,500      -$100     $38           $2,438
- Jerry Jones    212121233S04G11111001    10/28/03         $2,383      -$95        $36          $2,324
- Marcy Kay       887890766U04G11111001    11/5/03          $2,000      -$80        $30          $1,950
-                                                         				          --------------------				 	Total School Amount                $6,712

## COD pushes “net”  disbursements

- School submits and COD accepts:
-  a $1,000 net disbursement for student A.
-  -$100 downward disb. Adjustment for student B.
- COD will send (“push”) $900 to School’s bank account.

## Funded Disbursement Listing 

- Run Date:  11/2/03	                     US Department of Education			 Page:  1
- Federal Direct Loan Program
- Funded Disbursement Listing Report
- For Loans to be Funded by:  11/1/03
- For Academic Year 2003-2004
- School:  George’s Hair Salon                                                                          School Code:  G11111
- 	13 Maple Pl.
- 	Washington, DC 20202
- Student             Loan ID	             Disb Date          Gross	 Fee     Rebate        Net Amt.
- John Ho         666234454S04G11111001     11/2/03          $1,015        -$30      $15           _$1,000_
- Sam Kern        888121233S04G11111001    10/28/03         -$102             $4       -$2            _-$100_
-                   		                  				                      --------------------					Total School Amount                **$900**

## Practical Effects of Netting disbursements

- Schools don’t have to return excess cash (if additional disbursements will be made within 3 business days).
- Keeps disbursements and cash in balance.
- Makes monthly and year end reconciliation simple.

## Cash Management Requirements

- 30-Day Reporting Requirement
- 	-685.301(d) Direct Loan
- 	-685.83 Pell (and annual deadline notice)
- 3-Day Cash Rule
- 	-668.162(b)
- Monthly Reconciliation
- 	-685.102(b) Direct Loan

## Refunds of Cash

- Funds not disbursed within 3 business days must be returned as Excess Cash to the Department of Education.
- Encourage schools to return funds electronically via the GAPS web.

## Advantages of Electronic Refunds

- Posts to GAPS within 2 business days.
- School control over process.
- School directs from which bank account the money will be refunded.
- Multiple refunds on one screen and at one time.
- Electronic processing reduces human error and delays.

## Funding Info on COD Web

- Help to manage your cash more effectively
- Reflects current activity
- By program and award year
- Available 24/7
- Numerous screens/ variety of data

## School Summary Web Screen

_**Sammy’s Beauty School**_
- _ _
**Award Year****	****03-04**
**Program****	****DL**
- Cash > Accepted & Posted Disbursements & older
- than 30 days					$0.0
- Cash > Accepted & Posted Disbursements		$54,000
- Current CFL					$138,000
- Disbursement to Drawdown Ratio			0.87565
- .

## School Funding Info Web Screen 

_**EDUCATION UNIVERSITY**_
- Funding Info
**Program**     Direct Loan	**Award Year**  03-04
- Entity ID						12333213
- Initial CFL						$56,000
- Current CFL						$200,000
- Available Balance					$15,000
- Cash > Net Accepted & Posted Disbursements		$0.0
- Net Accepted & Posted Disbursements			$185,000
- Net Drawdowns						$185,000
- Disbursement To Drawdown Ratio			1.0000

## Cash Activity Screen

- _HIYA UNIVERSITY_
**Program**   Direct Loan		**Award Year**  03-04
**Net Draws**						               $30,000
**Cash > Accepted & Posted Disbursements & older than 30 days    **$0
- 					**Totals**
- Date of Transaction					**10/23/0****3**
- Time							1:35PM
- Drawdowns				$30,000  	$2,000
- Drawdown adjustments			$0
- Refunds					$1,000
- Returns					$0
- Days for On-time reporting
- Payment Control Number					2003102321221
- Accepted & Posted Disbursements Applied	$20,000   	$0
- Cash > Accepted & Posted Disbursements	$10,000
- Source System						GAPS**	**

## School Summary Financial Info Screen

- _RAILROAD COLLEGE_
**Program**   Direct Loan		**Award Year**   03-04
- Entity ID							22346667
- Beginning Cash Balance				$0
- Cash Receipts						$100,000
- Disbursement Amount					$80,000
- Disbursement Adjustments Amount			-$5,000
- Refunds of Cash					$15,000
- Ending Cash Balance					$10,000

## Other COD related Sessions

- Session 6 – Direct Loans: Balancing the Books for 2002 - 2003 and Beyond
- Session 13 –  XML Advance Experts
- Session 14 – XML Is Coming to Town
- Session 17 – COD 101: The Big Picture Front to Back
- Session 18 – COD Open Forum Questions and Answers
- Session 19 – Navigating the COD Website

## Other COD related Sessions (continued)

- Session 20 – COD: What’s New for Direct Loan Processing  2004 - 2005
- Session 21 – What’s New for Pell Processing  2004 - 2005
- Session 23 – EDExpress/COD Processing from an EDExpress Version 10.1 Pell perspective
- Session 24 – EDExpress/COD Processing from an EDExpress Version 10.1 DL perspective