Did you know that ED requires schools to return excess interest earned on federal title IV funds each year?
Institutions must maintain their Title IV, HEA program funds in an interest-bearing depository account. Interest may accrue throughout the year and schools may keep up to $500 in interest earned on Title IV funds. At the end of each award year, any interest earned in excess of the 500 dollar threshold must be returned to the federal government. This is called “excess interest”. Unlike Title IV funds, excess interest gets returned to the Department of Health and Human Services (HHS) through the HHS Payment Management System (PMS). http://bit.ly/2qkA5cz
PMS is the central collection point for interest earned on federal grants. Schools may no longer remit excess interest through G5 and instead must remit excess Title IV interest to HHS’s Payment Management System and must do so within 30 days after the end of each award year.
According to a recent electronic announcement, the return of interest should be made payable to Department of Health and Human Services. Institutions must include with the remitted interest:
- An explanation stating that the refund is for excess interest,
- U.S. Department of Education-Federal Student Aid as the name of the awarding agency, and
- The institution’s Data Universal Number System (DUNS) number in the addendum record or other correspondence.
The electronic announcement also states that the instruction above vary somewhat with the instruction under Returning Interest on the HHS webpage, which, for example, refer to payee account and grant numbers that do not apply here and may be ignored.
Schools have three methods to return excess interest; via ACH, FedWire or by mailing a paper check to HHS Program Support Center in Atlanta, GA (and not to the Rockville Maryland Address that was included in the regulations).
For more information refer to the May 19, 2017 Electronic Announcement from Federal Student Aid here: http://bit.ly/2rpL2cI
The deadline for the 2016-2017 award year is July 30, 2017.