Direct Loan Funding and Cash Management A-Z

1. Session 42 Direct Loan Funding and Cash Management A-Z George Karayianis Tremayne Cobb

2. Session Overview • Funding Process Overview • Funding Methods • Using GAPS • Hands-On Exercise

3. Funding Process Overview “How do schools get their $Money$?”

4. Funding Delivery Methods Advanced Funds/School- Initiated Drawdowns Pushed Cash/System- Initiated Drawdowns

5. Advanced Funds/School-Initiated Drawdowns • School receives an initial CFL. • School draws down cash via the GAPS Web site. • School sends in disbursement records to substantiate cash received. • COD sends CFL increases to GAPS so school can continue to drawdown funds as needed.

6. Funding Flow - Advanced Funds SCHOOL Batches GAPS COD CFL/authorization

7. Pushed Cash/System-Initiated Drawdowns • COD initiates drawdown requests and cash is deposited in a school’s bank account based on disbursements accepted and posted by COD. • Schools must have an accepted origination record and MPN on file before an actual disbursement is accepted and cash is pushed to a school.

8. Funding Flow - Pushed Cash SCHOOL Batches GAPS COD CFL/authorization and drawdown request

9. Run Date: 11/2/06 US Department of Education Page: 1 Federal Direct Loan Program Funded Disbursement Listing Report For Loans to be Funded by: 11/1/06 For Academic Year 2006-2007  School: George’s Hair Salon School Code: G11111 13 Maple Pl. Washington, DC 20202 Student Loan ID Disb Date Gross Fee Rebate Net Amt. Sally Mae 233234454S07G11111001 11/2/03 $2,500 -$100 $38 $2,438 Jerry Jones 212121233S07G11111001 10/28/03 $2,383 -$95 $36 $2,324 Marcy Kay 887890766U07G11111001 11/5/03 $2,000 -$80 $30 $1,950   -------------------- Total School Amount $6,712 Ex: Funded Disbursement Listing

10. Monitoring Statuses • Cash Monitoring 1 (HCM1) • Funding method can be Advanced Funds or Pushed Cash • Cash Monitoring 1 (HCM2) and Reimbursement • Funding method is Pushed Cash • Required to have a signed MPN on file and accepted origination record before COD will accept actual disbursement

11. Cash Management Requirements • 30-Day Reporting Requirement • 685.301(d) Direct Loan • 3-Day Cash Rule • 668.162(b) • Monthly Reconciliation • 685.102(b) Direct Loan

12. Reconciliation and Closeout

13. Direct Loan Reconciliation versus End-of-Year Closeout • Monthly Reconciliation • Compare your records with the Dept’s to identify and resolve outstanding discrepancies. • Closeout • Net Accepted and Posted • Disbursements =GAPS net cash • Ending Cash Balance (ECB) = 0

14. COD and GAPS Tools to help reconcile Direct Loans • COD Funding Web screens • Reports (COD) • GAPS

15. School Funding Info Web Screen School of Outstanding Students Funding Info Program Direct Loan Award Year 06-07 Entity ID 44544444 Initial CFL $56,000 Current CFL $200,000 Available Balance $15,000 Cash > Net Accepted & Posted Disbursements $0 Net Accepted & Posted Disbursements $185,000 Net Drawdowns $185,000 Disbursement To Drawdown Ratio 1.0000

16. Cash Activity Screen School of Outstanding Students Program Direct Loan Award Year 06-07 Net Draws $30,000 Cash > Accepted & Posted Disbursements & older than 30 days $0 Totals Date of Transaction 10/23/06 Time 1:35PM Drawdowns $30,000 $2,000 Drawdown adjustments $0 Refunds $1,000 Returns $0 Days for On-time reporting Payment Control Number 2006102321221 Accepted & Posted Disbursements Applied $20,000 $0 Cash > Accepted & Posted Disbursements $10,000 Source System GAPS

17. The Department of Education’s Grant Administration and Payment System (GAPS)

18. E-Payments Web site(http://e-grants.ed.gov)

19. Logon to GAPS ed101 *******

20. Payment Requests Reports Refunds Password Maintenance User’s Guide Select New Payee Help Exit Select “Payment Requests” from Main Menu Main Menu School of Outstanding Students 100 Student Way Bookville, AZ 22222 Please select one of the following options: Payment Requests

21. Select “Create Direct Loan Payment Requests” from Payment Requests Menu

22. Enter Payment Amount Return to Payment Requests Menu You have to save your work 2:02 Exit Direct Loan Payment Requests (Create)

23. Payment Requests Reports Refunds Password Maintenance User’s Guide Select New Payee Help Exit Electronic Refunds Main Menu  School of Outstanding Students 100 Student Way Bookville, AZ 22222 Please select one of the following options: Refunds

24. Refunds to Open Awards • Perkins • Interest • Refunds to Closed Awards Initiate Refund Bank Account Maintenance Refunds Report Check “refunds to open awards” and “initiate refunds” Refunds Menu School of Outstanding Students 100 Student Way Bookville, AZ 22222 Please select one of the following options: X Initiate Refunds

25. Awards and net draws will be displayed Refunds to Open Awards Please note --- your session will be timed out after 10 minutes of inactivity. Any button click will reset the inactivity timer. DUNS Number: 111111111

26. Enter the amount(s) to be refunded Refunds to Open Awards Please note --- your session will be timed out after 10 minutes of inactivity. Any button click will reset the inactivity timer. DUNS Number: 111111111 100.00 Continue Cancel

27. Refund Confirmation Refunds to Open Awards Confirmation DUNS Number: 111111111 First Previous P268k059999 – P268k079999 Next Last PR Award Net Draws Refund Amt Account Name Confirmation Number Comments Grand Total: $1,293 Settlement Date: 10/20/2006 NOTE: It will take two days before refund is posted to GAPS

28. Drawdown Adjustments • Can’t move more than has been drawn • Net adjustment must equal zero • Do not use adjustments as a substitute for returning excess cash • Do not use adjustments to close out a year or bring your school’s cash balance to zero

29. Payment Requests Reports Refunds Password Maintenance User’s Guide Select New Payee Help Exit Select “Payment Requests” from Main Menu Main Menu  School of Outstanding Students 100 Student Way Bookville, AZ 22222 Please select one of the following options: Payment Requests

30. Select Adjust Direct Loan Drawdown Amounts Adjust Direct Loan Drawdown Amounts

31. Adjustments between years and/or campuses Return to Payment Requests Menu Select New Payee Exit Direct Loan Drawdown Adjustments OK Cancel

32. Enter the amounts to be adjusted and click “OK” Return to Payment Requests Menu Select New Payee Exit Direct Loan Drawdown Adjustments OK Cancel

33. Adjustment Confirmation Return to Payment Requests Menu Select New Payee Exit Direct Loan Drawdown Adjustments The drawdown amounts have been adjusted

34. Payment Requests Reports Refunds Password Maintenance User’s Guide Select New Payee Help Exit GAPS Reports Main Menu School of Outstanding Students 100 Student Way Bookville, AZ 22222 Please select one of the following options: Reports

35. Select “Activity Report” Reports Menu Activity Report

36. Activity Report - Selection Screen Return to Payment Requests Menu Select New Payee Exit Activity Report (Select) Select

37. Activity Report - Cumulative Summary 1 2 3

38. Activity Report - Record Detail

39. GAPS Access • Full Access • View Access • Limit 5 user IDs of each access per school • Download form from e-payment web site • Fax completed form to GAPS • (202-205-0729)

40. GAPS Helpdesk • 1-888-336-8930 • Helpdesk hours of operation are 8 a.m. • to 6 p.m., EST, Monday through Friday.

41. Other Direct Loan Sessions Session 40 Hands On Tour of DL Tools Session 41 Best Practices in Using DL LSDA Session 43 Best Practices for Processing DL at Your School Session 44 Direct Loans A – Z Session 45 Direct Loans – How to Get Started Session 46 What’s New in Direct Loans: Grad PLUS and other HERA Related Changes Session 47 Direct Loan Reconciliation and Closeout Session 48 Direct Loan Reports & Reference Materials-Tools of the Trade Session 49 How Direct Loan Servicing is Improving the Financial Aid Experience for You and Your Students