Transcript Cash Management: Authorizations and Notifications

Cash Management
Notifications
And
Authorizations
NOTIFICATIONS
WHAT IS REQUIRED?
Types of Notifications
• Eligibility for Title IV funds and payment of those
funds
• Crediting of Title IV loan proceeds to the
student’s account
• Post withdrawal Title IV loan disbursements
credited to a student’s acct
• Availability of post-withdrawal disbursements not
credited to account
TIV Eligibility & Payment
• What must be conveyed?
• Amount expected to be received, including
PLUS proceeds on behalf of the student
• Expected disbursement date
• Method of disbursement
• For FWS, amount authorized to be earned
• For Stafford/Direct Loans, amount that is
subsidized and unsubsidized
TIV Eligibility & Payment, cont’d
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Who must be notified?
Student
When?
For all TIV programs except FWS, each award
year before the funds are disbursed
• For FWS, each award period before initial
disbursement of FWS compensation
TIV Eligibility & Payment, cont’d
• How?
• Sent directly to the student. Method and format
are not specified; may be electronic or written
notification
Crediting TIV Loan Proceeds (other
than PLUS)
• What must be conveyed?
• If you credit the student’s institutional account
with FFEL, DL or Perkins proceeds:
– Disbursement date
– Amount of disbursement
– Right to cancel
• Procedures to cancel
• Deadline to cancel
Crediting TIV Loan Proceeds
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Who must be notified?
Student
When?
Anytime between 30 days prior to and 30 days
after crediting the student account
• How?
• Directly to student; written or electronic
Right to Cancel
• If the borrower wants to cancel all or a portion of
the loan, s/he must respond no later than:
– 14 days from the date of the school’s notification; or
– The first day of the payment period if the school’s
notification was sent more than 14 days prior to the
first day of the payment period
Crediting PLUS Proceeds
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What must be conveyed?
Disbursement date
Amount of disbursement
Borrower’s right to cancel loan
– Procedures and deadlines
– Notification not required if lender disbursed loan by
individual check
Crediting PLUS Proceeds
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Who?
Parent PLUS Borrower
When?
Anytime between 30 days prior to and 30 days after
crediting student’s account
• How?
• Send directly to parent borrower; may be electronic or
written; if electronic, must confirm receipt
Post-withdrawal disbursementswhat are they?
A form of late disbursement that occurs only when
a student has withdrawn before completing the
payment period or period of enrollment.
School performs the R2T4 calculation. If the
amount that had actually disbursed prior to
withdrawal is less than the calculated amount to
which s/he is entitled, the remainder must be
disbursed as a post-withdrawal disbursement.
Post-withdrawal Disbursement of
TIV Loan Proceeds Credited to
Student’s Account
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What must be conveyed?
Amount and date disbursed
Borrower’s right to cancel all or portion of loan
Procedures and deadlines by which borrower
must inform school of desire to cancel
Post-withdrawal Disbursement of
TIV Loan Proceeds
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Who?
Student or, in the case of PLUS, parent
When?
No later than 30 days after crediting the student’s
account
• How?
• Sent directly to student (or parent borrower); may be
written or electronic. If electronic, school must confirm
receipt
Post-Withdrawal Disbursement of
TIV Funds not credited to student
account
• What must be conveyed?
• Must offer student or PLUS borrower any portion of
post-withdrawal disbursement not credited to student
account
– Amount and type(s) of funds
– May accept or decline all or a portion
– No payment will be made unless student requests funds
within 14 days
– Procedures by which student must inform school s/he wants
funds
Post-withdrawal disbursements
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Who?
Student or, in the case of PLUS, parent
When?
Within 30 days of withdrawal date
How?
Written notification to student (or parent, if
PLUS)-electronic is not permitted
Post-withdrawal disbursements
• If student’s or borrower’s request for
disbursement is received prior to the 14 day
deadline, the school must disburse the funds
within 90 days of withdrawal date.
• If student’s or borrower’s request for
disbursement is received after the 14 day
deadline, the school may choose to disburse.
AUTHORIZATIONS
What is required?
Types of TIV Authorizations
• Disburse TIV funds to a designated bank account
• Credit FWS funds to student’s school account to pay
current allowable charges and minor prior-year charges
• Use TIV funds (other than FWS) to pay certain
institutional charges
• Hold excess TIV funds for use later in the payment
period or award year
Common Requirements
• Must be freely given
• Separate authorizations must be obtained from
student and from PLUS borrower
• Must be a written statement that clearly and
specifically states what is authorized and how
school will carry out authorized activity
Common Requirements, cont’d
• Multiple authorizations may be collected on a
single form
– Student or PLUS borrower must be able to clearly
indicated what is authorized
– Must indicate student or PLUS borrower may refuse
to authorize any of the activities listed
Common Requirements, cont’d
• Must be obtained before authorized activity takes place
• Must inform student or PLUS borrower of right to modify
or cancel authorization at any time
• May cover the entire period the student is enrolled at
the school
• Student must specifically authorize the handling of
his/her FWS funds separately from other TIV funds
Disburse TIV Funds to Designated
Bank Account
• Authorizes school to disburse, by EFT, TIV funds other
than PLUS proceeds directly to student’s bank account
• Authorization is provided by student at his/her discretion
prior to authorized activity
• Bank account must be in student’s name
• Disbursement of FWS funds to account must be
separate from other TIV funds
• For PLUS funds, must be done by parent and account
must be in parent’s name
Using FWS Funds to Pay Current
Institutional Charges
• Student may authorize disbursement of FWS
funds to institutional account for payment of
current charges
• Authorization must be made at the discretion of
the student
Use of TIV Funds (other than FWS
and PLUS) to Pay Institutional
charges
• No authorization is needed to credit student’s
account to pay tuition, room, board, fees and
minor prior year charges
• Authorization is required to credit funds to
student account to pay other institutional
charges or for prior year charges of more than
$100
Holding TIV Funds
• Authorization is required to hold funds for future
institutional charges or educational expenses for the
current award year, loan period or FWS period
• If funds are held, the school must:
– Identify amount held
– Maintain cash in its account equal to at least that amount
– Pay funds held at end of the maximum period permitted
Limitations
• School is not required to obtain a new
authorization each year
• Funds may only be held until:
– End of the loan period for FFEL/Direct loans
– End of final payroll or award period for FWS
– Last payment period of award year for which funds
were awarded for TIV programs other than FFEL,
Direct Loans and FWS
Limitations, cont’d
• At end of holding period, if a school is unable to
pay the student because s/he cannot be located,
the school must return the funds to the TIV
program
• If student or parent borrower cancels
authorization to hold excess funds, school must
pay no later than 14 days later
Review
• Student and parent PLUS borrower must freely
give his or her authorization
• Separate authorizations must be obtained from
the student and the PLUS borrower
• Authorization must be a written statement to
which a clear response is required
• Handling of FWS funds must be authorized
separately from other TIV program funds
Review, cont’d
• Authorizations may be collected on a single form
or separate forms, the student’s financial aid
application or award letter.
– If multiple authorizations are collected on a single
form, student/parent must be able to clearly indicate
which authorization s/he is giving
– For FWS, the bank form to initiate direct deposit may
serves as student authorization
Review, cont’d
• Authorization must be obtained before any activity
• The authorizing statement must:
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Identify the specific activity student is authorizing
Explain how the school will carry it out
Identify the period of time
For authorization to hold funds, state maximum time the
school will hold funds
– Explain the right to cancel or modify authorization