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2-07: Direct Loan Closeout Information for 2015-2016 Program Year

Posted Date: February 7, 2017

Author:  Sue O'Flaherty, Service Director, Program Management, Federal Student Aid

Subject: Direct Loan Closeout Information for 2015-2016 Program Year

The Direct Loan closeout deadline for the 2015-2016 Program Year is Monday, July 31, 2017. This is the last processing day of the program year, so all school data must be received and accepted by this date to be included in a school’s final Ending Cash Balance for the year.

Note: Exceptions to the last processing day of the program year may be made on a case-by-case basis, if the school’s processing period extends beyond the closeout deadline. Schools falling within this category should contact the Common Origination and Disbursement (COD) School Relations Center at the number provided below for further assistance. Once the closeout deadline has passed, requests may be made directly through the COD Web Site.

As a reminder, all cash management, disbursement reporting, and monthly reconciliation regulatory requirements supersede the closeout deadline. If a school is meeting these regulatory requirements, the final closeout stage should begin no later than the last award end date at the school for a given program and year. In other words, a school should be able to reconcile to a zero Ending Cash Balance and close out soon after its final disbursements and should not wait until the closeout deadline.

To be considered successfully closed out, a school must—

  • Have an Ending Cash Balance of $0 and Total Net Unbooked Disbursements of $0 internally, and as reflected on the School Account Statement (SAS), and

  • Complete the Balance Confirmation form on the COD Web Site

As part of the closeout process, we will send ongoing notices via Zero Balance or Remaining Balance emails. In addition, we will distribute a Notification/Warning Letter via email to schools in early May 2017. This letter will go to the Financial Aid Administrator and President at each school that has not confirmed closeout on the COD Web Site (including any schools with a zero balance that have not confirmed closeout). It will serve as a reminder to finish processing and confirm closeout before the final deadline. After the closeout deadline, schools with remaining balances will be billed.

A school must be aware of its closeout status even if its Direct Loan processing is handled by a third party servicer. We encourage each school to communicate regularly with its third party servicer to ensure closeout is completed. It is the school’s responsibility to ensure that it finishes processing and confirms closeout on time.

A key factor to an easy reconciliation and closeout is staying on top of the process. We encourage schools to review the following information:

  • Complete monthly reconciliation. This should include:

    • Internal reconciliation - compare internal student accounts and Business Office/Bursar records with Financial Aid Office records

    • External reconciliation - compare internal records to your Direct Loan School Account Statement sent via your SAIG mailbox

    • Resolution of any discrepancies and documentation of any outstanding timing issues.

  • Ensure that all drawdowns and refunds of cash are accounted for and applied to the correct program and award year.

  • Ensure that all batches have been sent to and accepted by the COD System, all disbursements and adjustments are accurately reflected on the COD System, and all responses are imported into the school’s system.

  • Review all pending disbursements and determine whether these need to be reported as actuals (DRI = TRUE) and if not, reduce these to $0 and make changes to loan period dates and loan amounts if needed. This will ensure that all disbursement data has been correctly reported to the COD System, and ensure subsidized usage limit calculations are correct for your borrowers. For more information on Subsidized Usage Limit Applies (SULA) reductions (See Attachment, Q3).
  • Ensure that all unbooked loans are booked or inactivated (reduced to $0).

  • Resolve all outstanding rejected records.

  • Return all refunds of cash. All refunds for the Direct Loan Program must be returned via G5.

  • Request any remaining funds owed to the school based on actual disbursements accepted by the COD System.

There are numerous tools available to assist schools in reconciliation and closeout efforts.  These tools are as follows:

  • School Account Statement (SAS)

  • SAS Disbursement Detail on Demand (requested via the Batch/Report Requests/New Report Requests links on the COD Web site)

  • School Monitoring Report

  • Direct Loan Booking Warning Report

  • Pending Disbursement Listing

  • Actual Disbursement List

  • G5 website and Reports
  • COD Web Site (particularly the School Summary Financial Information, Funding Information, Cash Activity, Refunds of Cash, and Action Queue screens)
  • DL Tools software/SAS Compare Program

  • Customer Service Representative/Reconciliation Specialist Assistance

  • Federal Student Aid Handbook

Contact Information

We appreciate your cooperation as we work to close out the 2015-2016 Direct Loan Program Year.  If you have questions about this announcement or need assistance with closeout, contact the COD School Relations Center at 800/848-0978. You may also email [email protected].

Attachments/Enclosures:

Frequently Asked Questions (FAQs) about Direct Loan Closeout for 2015-2016 Program Year in PDF Format, 154KB, 4 Pages

 

Publication Date: 2/7/2017


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