SFA DISBURSEMENTS, R2T4, OVERPAYMENTS AND REPAYMENTS FALL TRAINING 2013

Transcription

1 SFA DISBURSEMENTS, R2T4, OVERPAYMENTS AND REPAYMENTS FALL TRAINING 2013 B R I A N H E I N E M A N N C O P P E R M O U N T A I N C O L L E G E B H E I N E M A N C M C C D. E D U

2 DISBURSEMENT A school must notify a student of the amount of funds he/she will receive in each FSA program and how the funds will be disbursed A school must notify the student or parent in writing when Perkins, Stafford or PLUS loans are credited to a student s account. Must be sent via paper or electronically between 30 days before and 30 days after crediting the account

3 DISBURSEMENT METHODS Issuing a check Initiating an Electronic Funds Transfer (EFT) Bank account Debit card Cash (requires signed receipt)

4 DISBURSEMENT UPDATES Recent changes to disbursement provisions Why? To prevent student withdrawals due to lack of funds To reduce disbursement delays and promote timely disbursements To ensure that students have timely access to books and supplies

5 DISBURSEMENTS FOR PELL Book amounts by 7th day of term: If student was eligible for FSA disbursement 10 days before term starts Method for students to purchase books and supplies (can use book vouchers); policy which allows students to decline participation If file not payable by 10 days before term starts, no book money needs to be disbursed Risk: Institutional liabilities

6 MULTIPLE DISBURSEMENTS WITHIN A PAYMENT PERIOD Most CA CC have at least 2 disbursements per term One during the first week and second after 60% One during the first week and second after census (freeze date) Can be 50% / 50% Copper Mountain does 30% / 20% / 50% Some CC are giving aid every 2 weeks, like a paycheck (pilot). Helps budgeting and stops late adding of classes for more funds

7 DEBIT CARDS Some colleges use Debit Cards Two main co.: Black Board and HigherOne Students must have an EFT option Advantages: No lines No stale checks No reissue Saves time

8 STUDENT AUTHORIZATIONS A school must obtain authorization from a student before it can do the following: Disburse FSA funds by EFT to a bank account Use FSA funds to pay for allowable charges other than tuition and room and board Hold an FSA credit balance beyond 14 days Apply FSA funds to minor prior year charges - $200 maximum

9 EARLY DISBURSEMENTS The earliest a school may disburse FSA funds is 10 days before the first day of classes for a payment period School assumes liability for payments made to no shows regardless of disbursement date

10 LATE DISBURSEMENT Generally, a school may not make a disbursement later than 180 days after the date the student became ineligible

11 TITLE IV CREDIT BALANCES A Title IV credit balance occurs when a school credits Title IV program funds to a student s account and those funds exceed allowable charges That credit balance must be refunded to the student no later than 14 days after the credit occurs or 14 days from the first day of classes

12 RECALCULATING PELL AWARDS Changes for which recalculation is optional: School must establish policy under which it will recalculate awards May recalculate for changes in enrollment status during the payment period If school opts to recalculate, must recalculate both increases and decreases for all students

13 RECALCULATING PELL AWARDS (2) May choose to set a date after which you will not make changes May have more than 1 census date within a term Can apply to modules within a term, or Coursework within a term (when a student last adds a course) May choose to recalculate for changes in COA not result of changes in enrollment status

14 RETURN OF TITLE IV (R2T4) Title IV funds are awarded with the assumption that the student will attend the entire award period School is required to determine the earned and unearned portions of Title IV aid as of the date the student ceased attendance officially or unofficially through the 60% point in each payment period or period of enrollment *After the 60% point, a student has earned 100% of the Title IV funds

15 RETURN OF TITLE IV (R2T4) (2) Official withdrawal, school uses latter of: the date the student began the withdrawal process prescribed by the school or the date the student otherwise gave (in writing or orally) official notice of intent to withdraw A college who is not required to take attendance always has the option of using, as the withdrawal date, a date that the SCHOOL can document based on the student s attendance at an academically-related activity

16 RETURN OF TITLE IV (R2T4) (3) For a student who withdraws without providing notification, the school must determine the withdrawal date no later than 30 days after the end of the earlier of: the payment period or the period of enrollment the academic year, or the student s educational program If the student never began the withdrawal process, the midpoint of the payment period or period of enrollment may be used

17 RETURN OF TITLE IV (R2T4) (4) School must determine if student eligible for a Postwithdrawal disbursement (Earned funds > disbursed amount) Remember that a student begins earning Title IV funds on his or her first day of attendance. So even if the student drops before a disbursement was made, you must determine whether aid could have been disbursed and if the student is eligible for a Post-withdrawal disbursement Applies to students who drop before census Applies to students who drop after 60% point

18 RETURN OF TITLE IV (R2T4) (5) ED has worksheets and software to assist schools and a Web product Worksheets include the series of steps to calculate the earned and unearned portions of aid. The process along with case studies are available in Volume 5 of the SFA Handbook ED worksheets and the Web Product are optional Your Financial Aid Management System may have a module to calculate R2T4

19 RETURN OF TITLE IV (R2T4) (6) School may have its own refund policy to determine the charges a student will owe after withdrawing School policy will not affect the amount of Title IV aid the student has earned under the R2T4 calculation

20 RETURN OF TITLE IV (R2T4) (7) Schools must return unearned Title IV funds within 45 days of date school determines student withdrew Pell Grant funds must be returned or paid to another eligible student within 3 business days of downward adjustment to COD Any grant amount owed by the student is subject to a 50% reduction and treated as an overpayment Any loan amount owed by the student can be repaid under terms of the promissory note

21 RETURN OF TITLE IV (R2T4) (8) Schools must offer any amount of a Postwithdrawal disbursement within 30 days of date school determined student withdrew If the student submits a timely response and requests all or portion of the Post-withdrawal disbursement, the school must normally disburse the funds within 180 days of the date of determination

22 RETURN OF TITLE IV (R2T4) ORDER OF RETURN 1. Unsubsidized loans 2. Subsidized loans 3. Federal Perkins loans 4. PLUS loans 5. Pell 6. FSEOG

23 REMEMBER!!! Pell Grants cannot be considered an over-award If the student is otherwise eligible, you must pay the full award for the year (have signed statement of refusal if student denies the Pell) A student may never receive Pell Grant for attendance at 2 schools at the same time

24 OVERPAYMENTS What is an overpayment? An overpayment exists when a student receives aid that exceeds eligibility for a Title IV program Causes of overpayments: Incorrect reporting of data on FAFSA Incorrect COA School miscalculated EFC Paid on Ineligible student Paid excess of grant or loan limits

25 OVERPAYMENTS (2) Examples of School Liabilities : Grant/Loan overpayments because school failed to follow eligibility requirements Overpayment as a result of interim disbursement Unresolved POP Student fails to begin enrollment (school must return funds within 30 days of becoming aware)

26 OVERPAYMENTS (3) Examples of overpayments student is responsible for: Student received more Pell than eligible for Additional aid received resulting in an overaward (e.g. scholarship) Remaining overpayment after applying the $300 campus-based tolerance

27 OVERPAYMENTS (4) Reporting overpayments: Report to NSLDS within 30 days Report changes to NSLDS for previously submitted overpayments within 30 days

28 OVERPAYMENTS (5) If overpayment is a school liability, you must immediately restore the funds to the Pell account You may attempt to collect from the student Remember this is an institutional debt, not a Title IV overpayment You may NOT withhold future Title IV funds because the student owes an institutional repayment (but the college can prevent registration)

29 OVERPAYMENTS (6) If overpayment is a student liability School can try to eliminate by adjusting subsequent payments in the same award year If this is not possible, you must attempt to collect the overpayment from the student If student fails to repay or make arrangements, you must refer to ED Withhold all aid until overpayment is resolved Report overpayments to NSLDS

30 OVERPAYMENTS (7) If the initial amount of the overpayment is less than $25, you may not refer it to debt collection. Does not apply to a remaining balance or if the amount is over the campus-based program threshold/tolerance.

31 REPAYMENTS When a student repays a Federal overpayment Make a downward adjustment to the student s record in COD and either return the funds through G5 or disburse them to another eligible student If a student fails to begin attendance The college must return the funds to the respective programs even if the funds were disbursed directly to the student (institutional liability)

32 REPAYMENTS (2) If a student fails to repay overpayment If after notifications to the student, an overpayment remains and the student has not repaid or made satisfactory arrangements to repay, you must take further action Refer Pell and FSEOG overpayments to the Department with the required information (form available) and report to NSLDS

33 ? Questions?