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(Direct Loans) Subject: Additional 2010-2011 Direct Loan Program Year Closeout Information

Posted Date:July 3, 2012

Author: William Leith, Service Director, Program Management, Federal Student Aid

Subject: Additional 2010-2011 Direct Loan Program Year Closeout Information

Over the past few months, we have provided information about 2010-2011 Direct Loan Program Year closeout (see the February 16, 2012 Electronic Announcement and the May 1, 2012 Electronic Announcement). This announcement supplements the previous guidance. As a reminder, to be considered successfully closed out, the school must—

  • Have an Ending Cash Balance of $0 and Total Net Unbooked Disbursements of $0, as reflected on your School Account Statement (SAS) Report; and
  • Complete the Balance Confirmation form on the Common Origination and Disbursement (COD) Web site. The Balance Confirmation form can be completed after the school has received a Zero Balance Letter, which is sent to the school via e-mail. Once the e-mailed letter is received, the school should log in to the COD Web site, click the Balance Confirmation link from the School options menu on the left-hand side of the page, and follow the instructions on the Balance Confirmation screen.

When is the processing deadline?

The processing deadline to submit records is 8:00 P.M. (ET) on Tuesday, July 31, 2012. The COD System subsequently must accept all records submitted by the processing deadline in order for them to be included in the school's final Ending Cash Balance for 2010-2011. Any 2010-2011 batches or records received after the processing deadline will be rejected and returned to the school.

Note: As a reminder, Refunds of Cash sent via G5 can take 5-7 days to process and post to the COD System. A school should consider its timing when submitting Refunds of Cash in order for these types of transactions to be reflected in its Ending Cash Balance prior to the deadline.

What if a school does not successfully close out by the deadline?

Beginning in October 2012, the Department will be contacting schools with outstanding balances. Any school that has not successfully closed out by the processing deadline and has a positive Ending Cash Balance will be sent a Final Demand Letter requesting the return of the outstanding balance as a refund of cash. Final Demand Letters will be mailed by January 2013. If the outstanding balance is not paid by the deadline noted in the letter, a receivable will be established, and the school will be billed accordingly.

Any school that has not successfully closed out by the processing deadline and has a negative Ending Cash Balance will be sent a Negative Balance Letter requesting the resolution of the outstanding balance. Negative Balance Letters will be mailed by January 2013.

Exceptions to these letter processes may be made for a school with processing periods that extend beyond the July 31, 2012 closeout deadline. Beginning July 7, 2012, a school will be able to request Extended Processing for closed Direct Loan award years via the COD Web site. Consistent with the Grant programs, Direct Loan users will complete this action by using the Request Post Deadline/Extended Processing link under the School menu. (See also the attachment titled "Additional COD System Processing Function Enhancements and Modifications for 2012-2013," in a June 29, 2012 Electronic Announcement.) Requests will be approved on a case-by-case basis. A school will receive notification of approved requests via a Reopen/Extended Processing e-mail to the Financial Aid Administrator and President.

If a school has any concerns about meeting the processing deadline, contact COD School Relations prior to the deadline for further assistance.

Note: Though the processing deadline is July 31, 2012, cash management and monthly reconciliation requirements supersede the closeout deadline. A school should be able to reconcile to a zero balance and close out within a month or two of its final 2010-2011 actual disbursements.

When is the deadline for drawdowns and/or drawdown adjustments?

Drawdowns and/or drawdown adjustments must also be requested/completed by the processing deadline of 8:00 P.M. (ET) on Tuesday, July 31, 2012.

How will a school learn its final balance?

In early August 2012, we will produce a final 2010-2011 SAS Report and send it to all schools. A school will receive this SAS Report even if it is at a zero balance or has previously closed out for this program year. If a school has not completed reconciliation to a zero balance prior to the deadline, it is important that its reconciliation be completed using this final SAS Report. This SAS Report will serve as a final record of the school's official Ending Cash Balance for 2010-2011 and should be kept as part of your reconciliation documentation.

What if a school needs further assistance with Direct Loan reconciliation and program year closeout?

We offer the "Interactive DL Reconciliation Training" on the reconciliation process for the Direct Loan Program. This training consists of a 70-minute session that will review how to identify and avoid common cash and disbursement discrepancies. Schools can also view the handouts of past training sessions on the Direct Loan Program, including specific sessions for Direct Loan Reconciliation and Direct Loan Reports. Complete information about the "Interactive DL Reconciliation Training" and other Direct Loan training sessions can be found at

A school may also contact the COD School Relations Center for further assistance.

Contact Information

We appreciate your cooperation as we work to close out the 2010-2011 Direct Loan Program Year. If you have questions about this announcement or need assistance with closeout, contact the COD School Relations Center at 800/848-0978. You may also e-mail

Last Modified: 07/02/2012