Scenario: A school has received returned checks for students who failed to cash credit balances. When returning the funds back to the source, if the student declines, is there an order of operations?
No. For example, if the credit balance was $300 and $100 is from the federal Pell Grant program and $200 is from the federal Direct Loan program, the school would return those amounts to the corresponding programs.
If the refund does not contain any federal funds, there are no Title IV implications; no regulation that would apply. Your institution should establish and follow its own policies, and/or any applicable state policies and procedures, based on the itemization of the refund.
You can find more information about cash management in the Student Aid Reference Desk.
Publication Date: 10/25/2021