Cash Management

1. Cash Management Notifications And Authorizations

2. NOTIFICATIONS WHAT IS REQUIRED?

3. 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

4. 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

5. TIV Eligibility & Payment, cont’d • 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

6. TIV Eligibility & Payment, cont’d • How? • Sent directly to the student. Method and format are not specified; may be electronic or written notification

7. 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

8. Crediting TIV Loan Proceeds • 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

9. 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

10. Crediting PLUS Proceeds • 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

11. Crediting PLUS Proceeds • 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

12. Post-withdrawal disbursements- what 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 A form of late disbursement that occurs only when a student has withdrawn before completing the payment period or period of enrollment.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.

13. Post-withdrawal Disbursement of TIV Loan Proceeds Credited to Student’s Account • 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

14. Post-withdrawal Disbursement of TIV Loan Proceeds • 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

15. 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

16. Post-withdrawal disbursements • 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

17. 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.

18. AUTHORIZATIONS What is required?

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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

28. 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

29. 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

30. 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

31. Review, cont’d • Authorization must be obtained before any activity • The authorizing statement must: • 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