FINAL RECONCILIATION OF A PELL GRANT AWARD YEAR

Reconciliationa nd CLoseout Procedures for Federal Student Aid

In addition to regular monthly reconciliation of Pell Grant data, a final reconciliation should be performed as soon as possible after final scheduled disbursements have been made for the award year. This final reconciliation should ensure that all data is correct, and that Total Net Drawdowns equal Net Accepted and Posted Disbursements in the COD System (Cash > NAPD balances should equal $0.00). This process must be performed within the applicable data submission deadline (defined below), as well as immediately following processing of any additional data by the school (for example, eligible late disbursements or disbursement adjustments made within regulatory timeframes, but which occur after the data submission deadline). There are two deadlines which impact this process:

Data Submission Deadline – The data submission deadline is published annually in a Federal Register Notice. It is generally the end of September following the end of the award year. For example, the 2016-2017 Award Year will close on September 29, 2017.  After this date, the COD System will not accept upward awards or disbursement adjustments without prior approval for an extension to the established data submission deadlines (downward adjustments will continue to be accepted). If your school needs to request an extension to the data submission deadline, this request may be submitted via the COD Web Site at https://cod.ed.gov.

Funding Cancellation Deadline – Pell Grant funding availability is canceled five years after the data submission deadline for the award year. For example, for the 2011-2012 Federal Pell Grant Award Year (July 1, 2011 – June 30, 2012), the funding cancellation date is September 29, 2017 [2012 + 5 = 2017]. After that time, schools will be unable to draw down or adjust further funds via the G5 website (although refunds of cash will still be accepted), and the COD System will be completely closed to any further award or disbursement processing for that award year. As such, schools must complete all final reconciliation activities well before this final deadline and in accordance with disbursement reporting timelines and the data submission deadline defined above.

2014-2015 Direct Loan Program Year Closeout

The closeout deadline for the 2014-2015 Direct Loan Program Year is Friday, July 29, 2016. This is the last processing day before the end of the program year. 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.

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. 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.

Prior to program year close out, schools should ensure that fields related to Subsidized Usage Limit Applies (SULA), such as academic year dates, loan period dates, loan and/or disbursement amounts, etc., are updated appropriately.

 

2014-2015 Direct Loan Program Year Closeout

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.