Posted Date:February 26, 2014
|Author:||Sue O'Flaherty, Service Director, Program Management, Federal Student Aid|
Subject: Direct Loan Processing Information - Discontinuation of Paper Check Processing for Direct Loan Refunds of Cash Beginning January 1, 2015
In an effort to increase efficiency and improve funds control, Federal Student Aid encourages schools to refund cash electronically via the G5 Web site. This method is faster and more secure than manual/paper processing, and is less likely to result in errors. As noted in an April 2, 2013 Electronic Announcement, schools can refund cash manually via paper check in some cases; however, we are beginning to move away from processing paper checks and plan to do so for Direct Loan refunds of cash by the end of 2014. In this announcement, we provide information about the discontinuation of making Direct Loan refunds of cash manually via paper check.
Beginning January 1, 2015, we will no longer accept Direct Loan refunds of cash sent manually via paper check. As a result, schools should begin to update their processes to refund cash electronically via the G5 Web site as soon as possible, but no later than December 31, 2014.
Prior to January 1, 2015, the COD School Relations Center will process paper checks for Direct Loan refunds of cash.
Beginning January 1, 2015, the COD School Relations Center will not process paper checks for Direct Loan refunds of cash and will return them to the sender.
This change will not impact the funding information screens on the COD Web site or the G5 Web site.
Note: If a school is required to refund cash as part of a liability assessed in an audit or program review, it must follow the instructions provided by the issuing office.
Note to Foreign Schools: The way a foreign school will refund Direct Loan funds varies depending on whether the school has a U.S. bank account or a foreign bank account. Beginning January 1, 2015 foreign schools will not be able to refund cash via paper check. For information about returning funds electronically, refer to the “Funding Process Overview” document on the Foreign School Information Web page on the Information for Financial Aid Professionals (IFAP) Web site.
For additional information on refunding cash via G5, refer to the G5 Web site or call the G5 Hotline at 888/336-8930 or 202/401-6238 for assistance.
For questions about this announcement or refunding cash, contact the COD School Relations Center at 800/848-0978 or 571/392-3737. You may also e-mail CODSupport@ed.gov.