Pop Quiz - What Is the Order of Return of Funds From a Stale Dated Check?

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? 

Answer:

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


Megan B | 10/25/2021 1:1:21 PM

I have just recent read the following in the 2020-21 FSA handbook (Vol 4, Chapter 2, pg 4-57):
Because the regulations allow schools up to 240 days to deliver a Title IV Credit Balance to a student who left school before receiving the credit balance, a school might find that it is holding Title IV funds that belong to a student the school cannot locate. When that happens, the school should return the Title IV funds in the same order the school would use if the school had to return funds because the student withdrew before the 60% point in the payment period or period of enrollment.

You must be logged in to comment on this page.

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.

Related Content

Return of Title IV Funds - January 2022: Return of Title IV Funds

MORE | ADD TO FAVORITES

AskRegs COVID-19 Questions

MORE | ADD TO FAVORITES

VIEW ALL
View Desktop Version