"Advanced Training" for the Experienced Financial Aid Professional

Transcription

1 "Advanced Training" for the Experienced Financial Aid Professional presented by NCSEAA Agenda Sunday, April 13 12:30 PM-12:45 PM Registration 12:45 PM-1:00 PM Welcome and Introduction Tony Carter, NCASFAA Elizabeth McDuffie, NCSEAA 1:00 PM-1:45 PM Federal Cash Management (1) Rose Mary Stelma (five minute break) CFI 1:50 PM-3:00 PM Return of Funds (2) Bruce Blackmon R2T4 Website demo UNC-P 3:00 PM-3:15 PM Break 3:15 PM-4:30 PM Recordkeeping and FERPA Requirements (3) Diane Miller SEAA Monday, April 14 8:45 AM-9:00 AM Coffee 9:00 AM-10:00AM Reporting and Consumer Information Bill Cox Requirements (4) SEAA (five minute break) 10:05 AM-11:00 AM Late Breaking Information (5) Rose Mary Stelma Question/Answers Jane Kanipe

2 Advanced Training for the Experienced Financial Aid Professional Bruce Blackmon is Director of Financial Aid at the University of North Carolina at Pembroke. He has worked in financial aid since 1986, with the exception of three years in the early 1990 s when he worked as the editor of a newspaper. Bruce has been a leader in NCASFAA serving in a number of positions including President. He has presented training sessions for NCASFAA and NCSEAA many times. Bruce has also served on the Executive Board of SASFAA. In his leisure time, Bruce is an avid Civil War reenactor. He is married to an ER trauma nurse and has two sons, David 14 and Andrew 12. Bill Cox is Deputy Director of Grants, Training and Outreach at the NCSEAA. Prior to assuming this position on April 17, 2006, he was Senior Assistant Director, Compliance, Research and System Support, with the Office of Scholarships and Financial Aid at NCSU. He has been active in the financial aid profession for more than 20 years. Bill is a Past President of SASFAA and NCASFAA and has held many other leadership positions in the associations. Prior to joining the staff at NCSU, Bill was Director of Financial Aid at NC School of the Arts and Meredith College. Also, he was Associate Director at UNC- CH. Before coming to NC, Bill was in Kentucky with the University of Kentucky and Northern Kentucky University. Jane Kanipe is Program Training Manager with NCSEAA. In this position, she has developed a training curriculum designed to help NC financial aid administrators gain understanding of a myriad of complex financial aid programs. The training curriculum is designed for the beginning aid administrator one with less than three years of experience. More than 340 new financial aid professionals have participated in the training workshops since October Prior to this, Jane served as Director of Financial Aid at Peace College for 24 years. She also served in other administrative positions during this period. Since leaving Peace College, Jane has worked as a financial aid consultant with Financial Aid Services. She has been actively involved with financial aid professional associations including serving as President of NCASFAA She has served on NASFAA, SASFAA and NCASFAA committees. Elizabeth McDuffie is Director for Grants, Training and Outreach at NCSEAA and has been with the Authority since She oversees the administration and policy development of over 36 scholarship and grant need- and non-need-based programs, the training development for financial aid administrators and school counselors and the outreach activities for high school students and general public. Elizabeth has served as Director of Continuing Education and Director of Financial Assistance at Meredith College, Director of Enrollment Services and Director of Admissions and Financial Aid at Louisburg College, Assistant Director of Financial at NCSU and Assistant Director of Admissions and Financial Aid at St. Mary s College. She has been active in financial aid professional associations since She received the Award of Merit from NCASFAA in 2004 for her outstanding contributions to the Association and profession. She currently serves as the State Agency Liaison to the Executive Board of NCASFAA and as an appointee to the College Board s College Scholarship Service Assembly Council. Elizabeth received an MBA from Meredith College, BS from UNC-CH and AA from St. Mary s College.

3 Diane G. Miller is the Associate General Counsel for the State Education Assistance Authority. In her current role, she focuses primarily on representing the Authority s State grant and scholarship loan programs. She has been with the Authority since June of Before joining the Authority, she was an Assistant Attorney General in the North Carolina Department of Justice for sixteen years where she advised and represented a variety of State agencies, including the Department of Insurance, the State Auditor, the Secretary of State and the Division of Social Services of the Department of Health and Human Services. She also functioned as general counsel for a variety of occupational licensing boards, as well as the North Carolina Building Code Council. She began her legal career as Special Counsel at Dorothea Dix State Hospital. Ms. Miller graduated from the Pennsylvania State University in 1974 with a Bachelor of Science degree in Individual and Family Studies. She received her Juris Doctor from the University of North Carolina and was admitted to the State Bar in Before entering law school, Ms. Miller worked as a social worker in several different mental health and child welfare settings, focusing primarily on services for adolescents. Rose Mary Stelma has recently joined the staff at CFI as Financial Aid Services Director and will work closely with financial aid offices at NC colleges and universities in concert with CFNC regional representatives. Previously, Rose Mary was Assistant Vice Chancellor at ECU. Also, she held financial aid positions with Temple University, Harcum Junior College and Pierce Junior College. Rose Mary has been active in NCASFAA, SASFAA and NASFAA and has been a trainer for a number of years. She was president of NCASFAA in Rose Mary received SASFAA s Distinguished Service Award in 2007, which is the highest honor SASFAA can award. She also received NCASFAA s Distinguished Service Award in 2004.

4 NCSEAA Advanced Training for the Experienced Financial Aid Professional Evaluation Please rate the Sessions: 6 = Excellent; 5 = Above Average; 4 = Average; 3 = Below Average; 2 = Poor; 1 = Not Applicable If you rate a section below 5, please make suggestions for improvements. Section 1: Federal Cash Management Section 2: Return of Funds Section 3: Recordkeeping and FERPA Requirements Section 4: Reporting and Consumer Information Requirements Section 5: Late Breaking Information Overall rating: DEMOGRAPHIC INFORMATION: 1. Number of financial aid staff members in your office < > Type of position you hold entry mid-level senior-level director 3. Length of time you have been in financial aid GOALS AND CONTENT: Please rate on a scale of one (1) to six (6) with 6 being yes, 1 being no, and 5 through 2 ranging from yes to no Yes No 1. Did the training provide information you need to know? Did the training meet your expectations? Was the material organized/presented well? Did you find the handouts helpful? Was the material covered in enough detail? Please list information or topics NOT included which you feel should have been included and/or considered in future training activities.

5 Advanced Training for the Experienced Financial Aid Professional April 2008

6 CONTENTS Contents Section 1 Federal Cash Management Requesting Funds Disbursing Funds Section 2 Return of Funds Federal Refund Policy Refund Worksheets and Software State Refund Policy Institutional Refund Policy Section 3 Recordkeeping and FERPA Requirements Recordkeeping o State o Title IV Required Records o Program Records o Fiscal Records o Other Requirements Record Retention Periods o FERPA Section 4 Reporting and Consumer Disclosure Requirements Reporting: State Programs o NCSCSF and NCLTG o NCSIG o The Community College Grant and Loan Program o UNC Need-Based Grant o ELS Program o EARN Program Reporting: Federal Programs o FISAP o Title IV Programs o COD o NSLDS Consumer Disclosure Requirements Section 5 Late Breaking Information

7 SECTION 1 FEDERAL CASH MANAGEMENT Requesting Funds Disbursing Funds 1

8 Federal Cash Management Objectives: Provide guidelines for cash management Discuss rules and procedures required for requesting, maintaining, disbursing, and managing funds under the Pell Grant, ACG, SMART, TEACH, FSEOG, Perkins Loan, FWS, Direct Loan, and FFEL programs Handout: CFR Subpart K Cash Management Sources: FSA Handbook 34 CFR Subpart K Cash Management, NASFAA CORE FSA Coach 2

9 Federal Cash Management Objectives Section 1 Provide guidelines for cash management Discuss rules and procedures that a school must follow in requesting, maintaining, disbursing, and managing funds under the Pell Grant, ACG, SMART, TEACH, FSEOG, Perkins Loan, FWS, Direct Loan, and FFEL programs Federal Cash Management Handout 34 CFR Subpart K Cash Management, Sec Regulations Govern institution s management of most FSA program funds Establish rules and procedures to be followed in requesting, maintaining, disbursing, and managing FSA funds Applicable to all areas of the institution involved in cash management 1

10 Regulations Intended to: Promote sound cash management of FSA program funds by institutions Minimize costs to the government of making FSA program funds available to students and institutions Minimize costs to students who receive FSA loans New Electronic System for Grants Management and Payments G5 State-of-the-art-electronic system for grants management and payments ED has implemented new system to be used by all institutions Provides on-line capabilities Request payments Adjust drawdowns Report expenditures to the Department Provides continuous access to current grant and payment information Training on the use of G5 Web site and all G5 processes available Web site: Hotline: or Requesting Funds Secretary provides Title IV funds in four methods Advance Payment Method Reimbursement Payment Method Just-In-Time Payment Method Cash Monitoring Payment Method 2

11 Advance Payment Method Institution submits request for funds to the Secretary Request may not exceed immediate need of eligible students and parents When request accepted, the Secretary initiates electronic funds transfer (EFT) to bank account designated by the institution Funds must be disbursed as soon as possible but not later than three business days following date received by the institution Funds not disbursed by the third business day are called excess cash and must be returned immediately Just-In-Time Method Institution determines student s or parent s eligibility for Title IV funds and transmits records electronically to Secretary EFT disbursement amount is forwarded to institution for each record accepted Institution may disburse funds to eligible students Reimbursement Payment Method The institution must make disbursements to students and parents before requesting reimbursement from the Secretary Secretary requires institution to: Identify students for whom reimbursement is sought; and Submit to the Secretary or entity approved by the Secretary documentation showing each student and parent included in request was eligible to receive aid. 3

12 Reimbursement Payment Method The institution s reimbursement request is approved and paid if Secretary determines the institution completed the following: Accurately determined student s eligibility for Title IV, HEA program funds Accurately determined amount of Title IV, HEA program funds paid to student or parents Submitted documentation required Cash Monitoring Payment Method Similar to reimbursement payment method but not as restrictive. Institution makes disbursements to eligible students and parents before requesting or receiving funds. Secretary provides funds to an institution by: Allowing institution to make a draw of FSA program funds for the amount of the disbursements the institution has made to eligible students and parents; or Reimbursing institution for disbursements based on a streamlined review and approval process. Tailoring required documentation requirements on a case-by-case basis. Disbursing Funds Institution is considered to have made disbursement of Title IV, HEA program funds on date Institution credits student s account or pays student or parent directly with: Funds received from the Department; Funds received from lender under FFEL Programs; or Institution s funds used in advance of receiving Title IV, HEA program funds. 4

13 Maintaining and Accounting for Funds Must maintain Title IV, HEA program funds in a bank or investment account Federally insured or Secured by collateral of value reasonably equivalent to the amount of those funds Must clearly identify Title IV, HEA program funds in account Notify bank or investment company of accounts that contain these funds and retain copy of notification except for public institution May be required to maintain separate bank account that contains no other funds if Secretary determines institution failed to comply with Requirements above Recordkeeping and reporting requirements or Applicable program regulations Accounting and Internal Control Systems and Financial Records Must maintain accounting and internal control systems that Identify cash balance of funds of each Title IV, HEA program that are included in institution s bank or investment account as readily available as if those program funds were maintained in a separate account Identify earnings on Title IV, HEA program funds maintained in the institution s bank or investment account Maintain financial records in accordance Title IV regulations Confirm Eligibility Institution must confirm student s eligibility for FSA funds prior to disbursement Is student making SAP? Is student maintaining eligibility requirements for FSA funds? Have loan recipients maintained continuous eligibility? Enrolled at least half-time? For ACG and SMART, must confirm full-time enrollment 5

14 Disbursing FSA Funds Directly An institution may disburse funds directly by one of four methods Releasing check sent by FFEL lender Issuing a check or other instrument payable to and requiring endorsement or certification of student or parent Check considered issued on date it is mailed to student or parent or Date student notified that check is available for immediate pickup at specified location at institution May hold check up to 21 days, thereafter, must mail, initiate EFT or return funds to appropriate Title IV, HEA program Disbursing FSA Funds Directly Initiating EFT to bank account designated by student or parent Dispensing cash for which the institution obtains a signed receipt from the student or parent Delivery of FSA funds must be cost-free. Schools are prohibited from charging students a fee for delivering FSA funds. If school delivers FSA funds to students by crediting funds to a school-issued debit or smart card or to bank account via EFT, the school may not charge students a fee for making withdrawals of FSA program funds from that card or establishing a bank account Disbursing FSA Funds Directly Must disburse on a payment period basis May disburse to a student or parent for a payment period only if student Is enrolled for classes for payment period Is eligible to receive funds 6

15 Escheating Prohibited Must ensure FSA funds do not escheat to the state or revert to the school or any other party Must have process to identify credit balance Remaining on student s account beyond payment deadline or Undelivered to the student (or parent, if applicable) Must return those funds to FSA programs on student s behalf Early Disbursements Earliest an institution may disburse FSA program funds is: Ten days before the first day of classes for a payment period The later of 10 days before the first day of classes for the payment period, or the date the student completed the previous payment period for which he or she received Title IV funds in a clock hour or credithour program that is not offered in semester, trimester, or quarter academic terms. If an institution credits student s account with institutional funds in advance of receiving FSA funds earlier than 10 days before the first day of classes of payment period, FSA disbursement does not occur until tenth day before first day of classes. Late Disbursements May be made to an ineligible student if student became ineligible only because: For purposes of Direct Loan and FFEL programs, student is no longer enrolled at the school as at least a half-time student for loan period; and For purposes of Pell Grant, ACG, SMART, TEACH, FSEOG, and Perkins loan programs, student is no longer enrolled at the school for award year. May pay a Pell Grant to formerly eligible student if, before date student became ineligible, SAR/ISIR with an official EFC was processed by ED and received by the school 7

16 Late Disbursements May pay formerly eligible student if, before date student became ineligible, the school: Awarded student a FSEOG or Perkins loan; Created electronic origination record for Direct Loan; or Certified FFEL loan application Refer to CFR: Mandatory Late Disbursements An institution must offer a late disbursement to a student: Who withdraws and is eligible for a post-withdrawal disbursement Who completes the payment period or period of enrollment A institution may offer a late FFEL/DL disbursement to a student: Who does not withdraw but ceases to be at least a half-time student Limitations May not make late disbursement later than 180 days after the date of determination the student withdrew or otherwise became ineligible May not make second or subsequent late disbursement of a loan under FFEL or DL programs unless student successfully completed the period of enrollment for which the loan was intended May not make late disbursement of Federal Pell Grant, ACG, SMART, or TEACH unless valid SAR or ISIR received by ED s deadline published in Federal Register 8

17 Credit Balances Occur when institution credits FSA program funds to student s account and funds exceed student s allowable charges. Institution must pay excess funds directly to student as soon as possible, but no later than 14 days after the later of: The date the balance occurred on the student s account, if the balance occurred after the first day of class of a payment period; or The first day of classes of the payment period, if the credit balance occurred on or before the first day of class of that payment period. Credit Balance Example An FSA credit balance occurs only if the total amount of FSA program funds exceeds allowable charges. Example: Ms. Anne Phillips enrolls at Eaglewood Technical Institute as a commuter student, and her total allowable charges for the fall term amount to $1,500. ETI credits $2,000 to her account: $1,000 in FSEOG, $500 in private scholarship funds, and $500 in Pell Grant funds. Although there is an excess of $500 on the account, this does not constitute an FSA credit balance because the total amount of FSA funds ($1,500) does not by itself exceed the amount of allowable charges ($1,500). If, in this example, ETI credited $600 of Pell Grant funds, rather than $500, an FSA credit balance of $100 would be created because the total FSA funds credited to the account ($1,600) would exceed the allowable charges ($1,500). The order in which these funds were credited does not matter. Holding Credit Balances An institution is permitted to hold excess funds if it obtains a voluntary authorization from the student or parent. Institution s responsibilities when holding excess funds: Must identify the student or parent, Must identify the amount of funds being held in a subsidiary ledger account designated for that purpose, Must maintain cash in its bank account at least equal to the amount it is holding for students and/or parents, and Must pay Any remaining balance on loan funds by the end of the loan period, and Any other remaining FSA program funds by the end of the last payment period in the award year for which they were awarded. 9

18 E-Sign Act Permits lenders, guaranty agencies, and schools to use electronic signatures and records in place of traditional signatures and records (includes notifications and authorizations) unless statute or regulation specifically requires pen and paper signature May direct students to secure website containing required notifications and disclosures Provide direct individual notice to each student Identify information required to be disclosed Provide inter-or-intro-net address where information can be found State that, upon request, individuals are entitled to a paper copy Inform students how to request paper copy Voluntary consent required Notices and Authorizations Notices Must include amount of funds student or parent can expect to receive How and when funds will be disbursed Must indicate which funds are subsidized and which are unsubsidized if DL or FFEL Program funds are included Notices and Authorizations Notices (continued) Except in case of post-withdrawal disbursement must include Anticipated date and amount of disbursement Student s or parent s right to cancel all or a portion of the loan or loan disbursement and have loan proceeds returned to holder of loan Not required if institution releases a check provided by lender under FFEL Program Procedures and time by which student or parent must notify institution that he/she wishes to cancel the loan or loan disbursement 10

19 Notices and Authorizations Notices (continued) With affirmative confirmation from the student The institution must provide notice in writing, no earlier than 30 days before, and no later than 30 days after crediting student s account Without affirmative confirmation from student The institution must provide notice in writing, no earlier than 30 days before, and no later than seven days after crediting student s account Student or parent must inform institution if he/she wishes to cancel all or portion of loan or loan disbursement Notices and Authorizations Notices (continued) Upon receiving loan cancellation request, an institution must return the loan proceeds, cancel the loan, or both If institution obtains affirmative confirmation from student, the later of the first day of a payment period or 14 days after the date it notifies student or parent of his or her right to cancel all or a portion of a loan If the institution does not obtain affirmative confirmation from the student, within 30 days of the date the institution notifies the student or parent of his or her right to cancel all or a portion of a loan Notices and Authorizations Notices (continued) If student or parent requests loan cancellation after the 30 day period, the institution may return the loan proceeds, cancel the loan, or do both Institution must inform the student or parent in writing regarding the outcome of any cancellation request Affirmative confirmation is process under which an institution obtains written confirmation of the types and amounts of Title IV, HEA program loans that a student wants for an award year before the institution credits the student s account with those loan funds; and An institution is not required to return any loan proceeds that it disbursed directly to a student or parent 11

20 Notices and Authorizations Student or parent authorizations If institution obtains written authorization from student or parent, institution may Use funds to pay for current year charges for Tuition and fees Board, if student contracts with institution for board Room, if student contracts with institution for room and Other educationally related charges incurred by the student at the institution and Prior award year charge for not more than $200 for Tuition and fees, room, or board; and With authorization, other educationally related charges incurred by student at the institution Excess Cash Definition: any amount of Title IV, HEA program funds, other than Federal Perkins Loan funds, that an institution does not disburse to students or parents by the end of the third business day following the date the institution Received those funds from ED or Deposited or transferred to its Federal account previously disbursed funds received Note: excess cash provisions do not apply to funds received under the just-intime payment method Excess Cash Excess Cash Tolerances Institution May maintain for up to seven (7) days an amount of excess cash that does not exceed one-percent of the total amount of funds drawn down in prior award year Must return immediately Any amount over the one-percent tolerance AND Any amount remaining in its account after the seven-day tolerance period 12

21 Excess Cash Consequences for maintaining excess cash Secretary may do the following, but is not limited to these Require institution to reimburse the Secretary for costs incurred In providing the excess cash to the institution AND In providing funds to the institution under reimbursement payment method or cash monitoring payment method Stored-Value Cards Stored-value card is a prepaid debit card Can be used to withdraw cash from automated teller machine (ATM) or Can be used to purchase goods from a merchant Different from traditional debit card because it is not linked to a checking or savings account Procedures for school Enters into agreement with bank which issues cards to students identified by school Electronically transfers funds to bank on behalf of student Cannot recall funds to pay other charges for student without student s written permission Stored-Value Cards School may make direct payments to student s stored-valued card (such as credit balances and FWS wages) under following conditions: Have student s authorization in similar manner for ETF Value of card convertible to cash No fees incurred by student Student s bank account is FDIC School cannot make any claims against the funds on the card, except for correcting an error or unless it obtains the student s written permission Student must be informed of terms and conditions 13

22 Stored-Value Cards Stored-value can be used to pay a student directly, as long as: All regulatory time frames are met (i.e., credit balances paid within 14 days, FWS wages paid at least once per month) Student s access to funds should not be conditioned on continued enrollment, academic status, or financial standing at the school The card is not marketed or portrayed as a credit card, and should not convert to a credit card after it is issued Third-Party Servicers Both parties agree To comply with all statutory and regulatory provisions governing the FSA programs To be jointly and severally liable for any violation by the servicer of these provisions Services offered through third-party servicer may include Obtaining student s authorization to perform electronic transfers Transferring funds electronically to student s bank account Opening bank account for student Issuing debit cards in conjunction with participating bank Title IV Balances Under a Dollar School may, but is not required to, pay Title IV balances under a dollar Includes credit balances, R2T4 and Perkins loan overpayments Does not matter if balance would otherwise be paid by check or EFT 14

23

24 PART 668 STUDENT ASSISTANCE GENERAL PROVISIONS Subpart K Cash Management Sec Disbursing funds. (a) Disbursement. (1) Except as provided in paragraph (a)(2) of this section, an institution makes a disbursement of title IV, HEA program funds on the date that the institution credits a student's account at the institution or pays a student or parent directly with (i) Funds received from the Secretary; (ii) Funds received from a lender under the FFEL Programs; or (iii) Institutional funds used in advance of receiving title IV, HEA program funds. (2) If, earlier than 10 days before the first day of classes of a payment period, or for a student subject to the requirements of Sec (c)(5) or Sec (b)(4) earlier than 30 days after the first day of the payment period, an institution credits a student's institutional account with institutional funds in advance of receiving title IV, HEA program funds, the Secretary considers that the institution makes that disbursement on the 10th day before the first day of classes, or the 30th day after the beginning of the payment period for a student subject to the requirements of Sec (c)(5) or Sec (b)(4). (b) Disbursements by payment period. (1) Except as provided in paragraph (b)(2) of this section, an institution must disburse title IV, HEA program funds on a payment period basis. Except as provided in paragraph (g) of this section, an institution may disburse title IV, HEA program funds to a student or parent for a payment period only if the student is enrolled for classes for that payment period and is eligible to receive those funds. An institution must disburse title IV, HEA program funds once each payment period unless (i) For FFEL and Direct Loan funds, 34 CFR (c)(6)(ii) or 34 CFR (b)(3) applies; Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007

25 Page 2 (ii) For Federal Perkins Loan, FSEOG, Federal Pell Grant, ACG, and National SMART Grant funds, an institution chooses to make more than one disbursement in each payment period in accordance with 34 CFR (b)(3), 34 CFR (a)(3), 34 CFR , or 34 CFR , as applicable; or (iii) Other program regulations allow or require otherwise. (2) The provisions of paragraph (b)(1) of this section do not apply to the disbursement of FWS Program funds. (3) For a student enrolled in an eligible program at an institution that measures academic progress in clock hours, in determining whether the student completes the clock hours in a payment period, an institution may include clock hours for which the student has an excused absence if (i) The institution has a written policy that permits excused absences; and (ii) The number of excused absences under the written policy for purposes of this paragraph does not exceed the lesser of (A) The policy on excused absences of the institution's accrediting agency or, if the institution has more than one accrediting agency, the agency designated under 34 CFR part (b); (B) The policy on excused absences of any State agency that licenses the institution or otherwise legally authorizes the institution to operate in the State; or (C) Ten percent of the clock hours in the payment period. (3) Except as provided in paragraph (g) of this section, an institution may disburse title IV, HEA program funds to a student or parent for a payment period only if the student is enrolled for classes for that payment period and is eligible to receive those funds. (4) For purposes of paragraph (b)(3) of this section, an "excused absence "is an absence that a student does not have to make up. Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007

26 (c) Direct payments. (1) An institution pays a student or parent directly by (1)(i) Releasing to the student or parent a check provided by a lender to the institution under an FFEL Program; Page 3 (2)(ii) Issuing a check or other instrument payable to and requiring the endorsement or certification of the student or parent. An institution issues a check on the date that it by (i)(a) Releasing or mailing Mails the check to a the student or parent; or (ii)(b) Notifiesying the student or parent that the check is available for immediate pickup at a specified location at the institution. The institution may hold the check for up to 21 days after the date it notifies the student. If the student does not pick up the check within this 21-day period, the institution must immediately mail the check to the student or parent, initiate an EFT to the student s or parent s bank account, or return the funds to the appropriate title IV, HEA program; (3)(iii) Initiating an electronic funds transfer (EFT) to a bank account designated by the student or parent; or (4)(iv) Dispensing cash for which an the institution obtains a signed receipt from the student or parent. (2) For purposes of this section, bank account means an account insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF). This account may be a checking, savings, or similar account that underlies a stored-value card or other transaction device. (3) An institution may establish a policy requiring its students to provide bank account information or open an account at a bank of their choosing as long as this policy does not delay the disbursement of title IV, HEA program funds to students. Consequently, if a student does not comply with the institution s policy, the institution must nevertheless disburse the funds to the student using a method described in paragraph (c) of this section in accordance with any timeframes required under subpart k of this part. In cases where the institution opens a bank account on behalf of a student or parent, establishes a process the student or parent follows to open a bank account, Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007

27 or similarly assists the student or parent in opening a bank account, the institution must Page 4 (i) Obtain in writing affirmative consent from the student or parent to open that account; (ii) Before the account is opened, inform the student or parent of the terms and conditions associated with accepting and using the account; (iii) Not make any claims against the funds in the account without the written permission of the student or parent, except for correcting an error in transferring the funds in accordance with banking protocols; (iv) Ensure that the student or parent does not incur any cost in opening the account or initially receiving any type of debit card, stored-value card, other type of automated teller machine (ATM) card, or similar transaction device that is used to access the funds in that account; (v) Ensure that the student has convenient access to a branch office of the bank or an ATM of the bank in which the account was opened (or an ATM of another bank), so that the student does not incur any cost in making cash withdrawals from that office or these ATMs. This branch office or these ATMs must be located on the institution s campus, in institutionally- owned or operated facilities, or, consistent with the meaning of the term Public Property as defined in Sec (a), immediately adjacent to and accessible from the campus; (vi) Ensure that the debit, stored-value or ATM card, or other device can be widely used, e.g., the institution may not limit the use of the card or device to particular vendors; and (vii) Not market or portray the account, card, or device as a credit card or credit instrument, or subsequently convert the account, card, or device to a credit card or credit instrument. (d) Crediting a student's account at the institution. (1) Without obtaining the student's or parent's authorization under Sec , An institution may use title IV, HEA program funds to credit a student's account at the institution to satisfy Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007

28 Page 5 (1) Current year charges for (i) Tuition and fees; (ii) Board, if the student contracts with the institution for board; and (iii) Room, if the student contracts with the institution for room.; and (iv) If the institution obtains the student s or parent s authorization under Sec (b), other educationally related charges incurred by the student at the institution; and (2) After obtaining the appropriate authorization from a student or parent under Sec , the institution may use title IV, HEA program funds to credit a student's account at the institution to satisfy (i) Current charges that are in addition to the charges described in paragraph (d)(1) of this section that were incurred by the student at the institution for educationally related activities; and (ii) Minor prior award year charges if these charges are less than $100 or if the payment of these charges does not, and will not, prevent the student from paying his or her current educational costs. (2) Prior award year charges for a total of not more than $200 for (i) Tuition and fees, room, or board; and (ii) If the institution obtains the student s or parent s authorization under Sec (b), other educationally related charges incurred by the student at the institution. (3) If an institution disburses Direct Loan Program funds by crediting a student's account at the institution, the institution must first credit the student's account with those funds to pay for outstanding current and authorized charges. (4) For purposes of this paragraph, current charges refers to charges assessed the student by the institution for Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007

29 Page 6 (i) The current award year; or (ii) The loan period for which an institution certified or originated a loan under the FFEL or Direct Loan programs. (e) Credit balances. Whenever an institution disburses title IV, HEA program funds by crediting a student's account and the total amount of all title IV, HEA program funds credited exceeds the amount of tuition and fees, room and board, and other authorized charges the institution assessed the student, the institution must pay the resulting credit balance directly to the student or parent as soon as possible but (1) No later than 14 days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (2) No later than 14 days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period. (f) Early disbursements. Except as provided under paragraph (f)(3) of this section (1) If a student is enrolled in a credit-hour educational program that is offered in semester, trimester, or quarter academic terms, the earliest an institution may disburse title IV, HEA program funds to a student or parent for any payment period is 10 days before the first day of classes for a payment period. (2) If a student is enrolled in a credit-hour educational program that is not offered in semester, trimester, or quarter academic terms, or in a clock hour educational program the earliest an institution may disburse title IV, HEA program funds to a student or parent for any payment period is the later of (i) Ten days before the first day of classes of the payment period; or (ii) The date the student completed the previous payment period for which he or she received title IV, HEA program funds, except that this provision does not apply to the payment of Direct Loan or FFEL program funds under the conditions described in 34 CFR (b)(3)(ii), (b)(5), and (b)(6) and 34 CFR (c)(6)(ii), (c)(7), and (c)(8), respectively. Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007

30 Page 7 (3) The earliest an institution may disburse the initial installment of a loan under the Direct Loan or FFEL programs to a first-year, first-time borrower as described in 34 CFR (c) and 34 CFR (b)(4) is 30 days after the first day of the student's program of study. (g) Late disbursements. (1) Ineligible student. For purposes of this paragraph, an otherwise eligible student becomes ineligible to receive title IV, HEA program funds on the date that (i) For a loan under the FFEL and Direct Loan programs, the student is no longer enrolled at the institution as at least a half-time student for the period of enrollment for which the loan was intended; or (ii) For an award under the Federal Pell Grant, ACG, National SMART Grant, FSEOG, and Federal Perkins Loan programs, the student is no longer enrolled at the institution for the award year. (2) Conditions for a late disbursement. Except as limited under paragraph (g)(4) of this section, a student who becomes ineligible (or the student's parent in the case of a PLUS loan) qualifies for a late disbursement if, before the date the student became ineligible (i) Except in the case of a parent PLUS loan, the Secretary processed a SAR or ISIR with an official expected family contribution; and (ii)(a) For a loan under the FFEL or Direct Loan programs, the institution certified or originated the loan; or (B) For an award under the Federal Perkins Loan or FSEOG programs, the institution made that award to the student. (3) Making a late disbursement. Provided that the conditions described in paragraph (g)(2) of this section are satisfied (i) If the student withdrew from the institution during a payment period or period of enrollment, the institution must make any post-withdrawal disbursement required under Sec (a)(4) in accordance with the provisions of Sec (a)(5); Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007

31 Page 8 (ii) If the student successfully completed the payment period or period of enrollment, the institution must provide the student (or parent) the opportunity to receive the amount of title IV, HEA program funds that the student (or parent) was eligible to receive while the student was enrolled at the institution. For a late disbursement in this circumstance, the institution may credit the student's account to pay for current and allowable charges as described in paragraph (d) of this section, but must pay or offer any remaining amount to the student or parent; or (iii) If the student did not withdraw but ceased to be enrolled as at least a halftime student, the institution may make the late disbursement of a loan under the FFEL or Direct Loan programs to pay for educational costs that the institution determines the student incurred for the period in which the student was eligible. (4) Limitations. (i) Generally, An institution may not make a late disbursement later than days after the date of the institution's determination that the student withdrew, as provided under in Sec , or, for a student who did not withdraw, days after the date the student otherwise became becomes ineligible. On an exception basis, and with the approval of the Secretary, an institution may make a late disbursement after the applicable 120-day period, if the reason the late disbursement was not made within the 120-day period was not the fault of the student. (ii) An institution may not make a second or subsequent late disbursement of a loan under the FFEL or Direct Loan programs unless the student successfully completed the period of enrollment for which the loan was intended. (iii) An institution may not make a late disbursement of a loan under the FFEL or Direct Loan programs if the student was a first-year, first-time borrower unless the student completed the first 30 days of his or her program of study. This limitation does not apply if the institution is exempt from the 30-day delayed disbursement requirements under Sec (c)(5)(i), (ii), or (iii) or Sec (b)(4)(i)(A), (B), or (C) of this chapter. (iv) An institution may not make a late disbursement of a Federal Pell Grant, an ACG, or a National SMART Grant, unless it received a valid SAR or a valid ISIR for the student by the deadline date established by the Secretary in a notice published in the Federal Register. Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007

32 Page 9 (h) Returning funds. (1) Notwithstanding any State law (such as a law that allows funds to escheat to the State), an institution must return to the Secretary, lender, or guaranty agency, any title IV, HEA program funds, except FWS program funds, that it attempts to disburse directly to a student or parent but the student or parent does not receive or negotiate those funds. For FWS program funds, the institution is required to return only the Federal portion of the payroll disbursement. (2) If an institution attempts to disburse the funds by check and the check is not cashed, the institution must return the funds no later than 240 days after the date it issued that check. (3)(i) If a check is returned to the institution, or an EFT is rejected, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the funds were returned or rejected. In cases where the institution does not make another attempt, the funds must be returned before the end of this 45 day period; and (ii) No later than the 240 day period described in paragraph (h)(2) of this section, the institution must cease any additional disbursement attempts and immediately return those funds. Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007

33 PART 668 STUDENT ASSISTANCE GENERAL PROVISIONS Subpart K Cash Management Sec Notices and authorizations. (a) Notices. (1) Before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan or FFEL Program funds, the notice must indicate which funds are from subsidized loans and which are from unsubsidized loans. (2) Except in the case of a post-withdrawal disbursement made in accordance with 34 CFR Sec (a)(5), if an institution credits a student's account at the institution with Direct Loan, FFEL, or Federal Perkins Loan Program funds, the institution must notify the student, or parent of (i) The anticipated date and amount of the disbursement; (ii) The student's right, or parent's right to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan. However, if the institution does not have to provide this information with regard to releases a check provided by the lender under the FFEL Program, funds unless the institution received the loan funds from a lender through an EFT payment or master check is not required to provide this information; and (iii) The procedures and the time by which the student or parent must notify the institution that he or she wishes to cancel the loan or loan disbursement. (3) The institution must send provide the notice described in paragraph (a)(2) of this section in writing (i) No earlier than 30 days before, and no later than 30 days after, crediting the student's account at the institution, if the institution obtains affirmative confirmation from the student under paragraph (a)(6)(i) of this section; or (ii) No earlier than 30 days before, and no later than seven days after, crediting the student account at the institution, if the institution does not obtain affirmative confirmation from the student under paragraph (a)(6)(i) of this section. Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007

34 Page 2 (4)(i) A student or parent must inform the institution if he or she wishes to cancel all or a portion of a loan or loan disbursement. (ii) The institution must return the loan proceeds, cancel the loan, or do both, in accordance with applicable program regulations if provided that the institution receives a loan cancellation request either (A) Within The later of the first day of a payment period or 14 days after the date the institution sends the notice described in paragraph (a)(2) of this section it notifies the student or parent of his or her right to cancel all or a portion of a loan, if the institution obtains affirmative confirmation from the student under paragraph (a)(6)(i) of this section; or (B) If the institution sends the notice described in paragraph (a)(2) of this section more than 14 days prior to the first day of the payment period, by the first day of the payment period. Within 30 days of the date the institution notifies the student or parent of his or her right to cancel all or a portion of a loan, if the institution does not obtain affirmative confirmation from the student under paragraph (a)(6)(i) of this section. (iii) If a student or parent requests a loan cancellation after the period set forth in paragraph (a)(4)(ii)(a) or (B) of this section, the institution may return the loan proceeds, cancel the loan, or do both, in accordance with applicable program regulations. (5) An institution must inform a the student or parent in writing or electronically regarding the outcome of any cancellation request. (6) For purposes of this section (i) Affirmative confirmation is a process under which an institution obtains written confirmation of the types and amounts of title IV, HEA program loans that a student wants for an award year before the institution credits the student s account with those loan funds; and (ii) An institution is not required to return any loan proceeds that it disbursed directly to a student or parent. Struck text deleted effective 7/1/08 Red text added effective 7/1/08 Early implementation allowed for all changes Compiled by NASFAA 11/2007