If your school participated in the Direct Loan program during the 2014-2015 Award Year, you should have received the U.S. Department of Education’s Closeout Letter. You must sign and return the letter once you have fully reconciled all of your Direct Loan awards and have no more outstanding Direct Loan disbursements pending and have otherwise confirmed closeout on the COD Website. Friday, July 29, 2016 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.
Schools that use “Third-Party Servicers” should be very careful to monitor their closeout process closely. Third Party Servicers are notorious for errors and according to Federal Student Aid, “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. Here’s how:
- 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 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 Q3 in the attachment to this announcement.
- 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.