(GENERAL-26-06) Reconciliation Information for the Direct Loan, Federal Pell Grant, and TEACH Grant Programs

A1: The Direct Loan Program requires schools to reconcile both internally and externally at least monthly to help meet all cash management and disbursement reporting requirements. For the Pell Grant Program and TEACH Grant Program, schools are encouraged to reconcile both internally and externally at least monthly to help meet all cash management and disbursement reporting requirements. Schools performing reconciliation more frequently are more likely to identify issues and resolve them before they become part of a systemic problem.

A2: Schools should also verify the following items during the reconciliation process:

A3: Reconciliation is a team effort consisting of the business office and the financial aid office, both of which have information that is needed to reconcile.

Note: Schools using third-party servicers are ultimately responsible for ensuring that regulatory requirements are being met and that reconciliation occurs on a regular basis. Schools should request and retain documentation of all reconciliation efforts. Reconciliation should also ensure that the school’s internal records match the third-party servicer’s records as well as what is in the COD System.

A4: ED provides a School Account Statement (SAS) to all schools each month. The SAS is similar to a bank statement and provides ED’s official ending cash balance and the official cash > NAPD balance as of the end of the reported month, as well as detailed cash and loan or disbursement detail transactions for the reported period. The SAS is the school’s primary tool used in reconciliation and program year closeout and schools should compare the SAS to both financial aid and business office records.

Note: Schools should review SAS format and content options at least annually to ensure these continue to meet their reconciliation needs.

Additional information on the content and formats available for the SAS is available in the COD Technical Reference, Volume 6, Section 6: COD Reports.

Additional optional tools for assistance in reconciliation processes are described in Q12 below. However, the SAS must be used for required and regular monthly reconciliation.

A5: A school’s ending cash balance cash > NAPD balance can be found on the COD website’s “School Summary Financial Information” page and “School Funding Information” page (select the School link in the blue tool bar along the top of the main page, then the School Summary Financial Information and Funding Info links on the left-hand tool bar under School Information). For Direct Loans only: This page mirrors the SAS Cash Summary section of the SAS and provides updated summary cash and disbursement information daily. This can assist schools with monitoring their cash balances, in addition to completing required monthly reconciliation to the SAS.

Note: A school can also find cash > NAPD and balance information by logging in to the FSA Partner Connect website. From the “School Profile” page, select the School Financial Information link and then expand the School Funding Information section for the program and award year you are reconciling. For more information on FSA Partner Connect, refer to A13.

A6: The ending cash balance and cash > NAPD balance are calculated as follows:

Direct Loan Program

• Ending cash balance = beginning cash balance + net drawdowns/payments – total net booked disbursements
• Net drawdowns/payments = cash receipts (drawdowns + drawdown adjustments) – refunds of cash (refunds)
• Total net booked disbursements = booked disbursements + booked adjustments (upward or downward)

Note: ED does not include unbooked, future-dated disbursement transactions in the calculation of the official ending cash balance. These are calculated separately and are included in the calculation of cash > NAPD. In the SAS, cash > NAPD is calculated as follows:

• Cash > NAPD = ending cash balance – total net unbooked disbursements
• Total net unbooked disbursements = unbooked disbursements + unbooked adjustments (upward or downward)

Note: A loan is considered booked when there is an accepted origination and an accepted and linked Master Promissory Note (MPN), along with an accepted actual/funded disbursement on file in the COD System.

Pell Grant Program

The below formulas and examples illustrate this calculation:

Net drawdowns - NAPD = cash > NAPD

• Example: $155,000 – $115,000 = $40,000

Drawdowns – refunds of cash = net drawdowns

• Example: $159,750 – $4,750 = $155,000

Disbursements + net disbursement adjustments (upward or downward) = NAPD

• Example: $175,859 + ($60,859) = $115,000

Upward disbursement adjustments + downward disbursement adjustments = net adjustments

• Example: $10,000 + ($70,859) = -$60,859

If the cash > NAPD is greater than zero ($0), your school needs to reconcile and determine if you need to report disbursements or return funds (excess cash).

If the cash > NAPD is less than zero ($0), your school needs to reconcile and determine if you need to report downward disbursement adjustments or withdraw funds.

A7: For Direct Loans, schools should be able to reach a zero ending cash balance for the award year within a month of making their final disbursements, if they are meeting all cash management, disbursement reporting, and monthly reconciliation requirements. Schools should then reconcile to a zero ending cash balance on their monthly SAS. If the school has completed all required processing per regulatory requirements and is ready to complete Direct Loan closeout, the school should

• document their final reconciliation to a zero ending cash balance on their SAS, and


• confirm closeout using the form on the “School Balance Confirmation” page on the COD website.

For more information on this final reconciliation and program year closeout, refer to Direct Loan closeout Electronic Announcements posted on the Knowledge Center.

For Pell and TEACH Grants, schools should perform reconciliation as soon as possible after making final scheduled disbursements for the award year. This process must be performed by the applicable closeout deadline and immediately following processing of any additional data by the school (for example, disbursement adjustments made within regulatory timeframes but which occurred after the closeout deadline, as well as returns of unclaimed credit balance checks; see Federal Student Aid Handbook, Volume 4, Chapter 5).

For both Direct Loans and Pell Grants, schools should confirm closeout via the “School Balance Confirmation” page on the COD website by completing the School Balance Confirmation form (select the School link in the blue tool bar along the top of the main page, then the Balance Confirmation link on the left-hand tool bar under School Information). Balance confirmation will allow your school to receive a program year closeout letter to document completion of final reconciliation. It also provides tighter controls over available funding and closeout.

Note: Schools can see additional Balance Confirmation information on the FSA Partner Connect website’s School Dashboard under the Origination and Disbursement Notification section. This section will notify your school of balance confirmations needed for closed programs and award years and balance confirmations recently completed. For more information on FSA Partner Connect, refer to A13.

A8: Yes. School should check their balances regularly even after the closeout deadline and/or after you have reached a zero cash > NAPD balance because of POP situations (Pell Grant only), system-generated negative disbursements, and changes made in G5 that impact balances in the COD System. We recommend adding this step to your procedures and processing schedule.

Note: Schools can see notifications about unresolved cash > NAPD balances for closed programs and award years via the FSA Partner Connect website, under the Origination and Disbursement Notifications section, Unresolved Cash Balances Greater Than $25 for Closed Program or Award Year notification. For more information about FSA Partner Connect, refer to A13.

A9: ED performs periodic global reductions of schools’ Current Funding Levels (CFL) after an award year closes. This global reduction reduces a school’s available balance in G5 and the COD System to zero. This zero available balance should not be confused with reconciling your net drawdowns to your net disbursements. Schools should monitor their cash > NAPD on the “School Funding Information” page on the COD website to determine if they have completely reconciled to a zero balance.

Note: Schools can find CFL information by logging in to the FSA Partner Connect website. Once on the “School Profile” page, select the School Financial Information link and then expand the School Funding Information section for the program and award year you are reconciling. For more information about FSA Partner Connect, refer to A13.

A10: Extended processing is not needed to submit decreases to award or disbursement transaction changes, non-financial changes, or upward changes due to POP. If you need to submit increases to award or disbursement amounts or new award or disbursements after the closeout deadline, you will need to request an extension to the deadline via the COD website’s “Request Reopen/Extended Processing” page. However, you should not submit a request until after you have completed reconciliation of all program records and are ready to submit increases or new award or disbursement data to the COD System.

After the closeout deadline, extended processing is not needed for

Extended processing is needed for

Note: You must submit a separate request for each program and award year for which extended processing is needed.

To request extended processing for the Direct Loan Program, log in to the COD website and complete the following steps:

A11: ED provides various tools that your school can use to reconcile externally to cash and disbursement data and records maintained in the COD System.

• Direct Loan School Account Statement (SAS), Pell Grant School Account Statement (SAS), and TEACH Grant School Account Statement (SAS) – Refer to Q4.


• Direct Loan SAS Disbursement Detail on Demand, Pell Grant SAS Disbursement Detail on Demand, and TEACH Grant SAS Disbursement Detail on Demand – Ad-hoc reports that allow schools to get SAS disbursement detail data independent of the school’s monthly SAS file. The report can be modified to show monthly data, year-to-date data, or data for a selected date range to help customize the report for a user’s specific need.


• SAS Disbursement Detail on Demand Report Reader and Instructions – Formats the fixed length SAS Disbursement Detail on Demand Report into an Excel spreadsheet. It is found under the COD Resources link at the bottom of any COD website page.


• Pending Disbursement List Report – Contains disbursements not yet funded in the COD System (Disbursement Release Indicator (DRI) = False).


• Direct Loan Discrepant Loan Data Report – Helps schools identify awards with disbursements dated prior to July 1, 2021, that they should adjust and/or correct in accordance with the 150% Direct Subsidized Loan Limit requirements.


• Pell Grant Reconciliation Report – Provides a one-record summary by student which includes the total year-to-date disbursement amount accepted in the COD System.


• Pell Grant Year-to-Date (YTD) Report – Contains detailed Pell Grant origination and disbursement data at a transaction level.


• Pell Grant Electronic Statement of Account (ESOA) – Summarizes the status of a school’s CFL versus the net drawdown for that award year, and includes YTD unduplicated recipient count, YTD total accepted and posted disbursements, YTD total ACA paid to school, and the net drawdown payments in G5 up to the current processing day.

COD website:

• School Funding Information and Funding History Report – Refer to Q5. Note: The Funding History Report is the downloadable csv file available on the “COD Funding Information” page.


• School Summary Financial Information – Refer to Q5.


• Cash Activity – Found under the School link in the blue tool bar along the top of the main page and under the Cash Activity link on the left-hand tool bar under School Information. Shows all individual drawdown, refunds of cash, and drawdown adjustment transactions. This information is sent to the COD System from G5. This information can be used to reconcile to internal bank statements and cash transactions.


• Anticipated Disbursement Queue– Found under the Batch link in the blue tool bar along the top of the main page and under the Anticip Disb Queue link on the left-hand tool bar. It lists all anticipated (pending) disbursements and can be used to determine if anticipated disbursements need to be canceled (reduced to zero) or made into actual disbursements (DRI = True). This information is updated daily.


• Action Queue – Found under the Batch link in the blue tool bar along the top of the main page and under the Action Queue link on the left-hand tool bar. It lists records that are in review by ED payment analysts for schools on Heightened Cash Monitoring 2 (HCM2) and can be used by schools to ensure all records that the school intends to submit in their HCM2 submission have been sent to the COD System.


• Pell and DL EDExpress – Software users can compare cash and disbursement data from EDExpress or a school’s custom software/system to the cash and disbursement data from the SAS and produce a discrepancy report. For more information about EDExpress, refer to the COD Technical Reference, Volume 3.

A12: You can find additional resources for reconciliation on the Knowledge Center website:

• FSA Handbook – Volume 4, Chapter 5 – Reconciliation in the Pell Grant and Campus-Based Programs


• FSA Handbook - Volume 4, Chapter 6 – Reconciliation in the Direct Loan Program


• COD Technical Reference, Volume 3 – Combination System Supplement


• COD Technical Reference, Volume 6, Section 7 – COD Reports


• COD Reconciliation Coordinators – Contact the FSA Partner and School Relations Center at 1-800-848-0978

A13: FSA Partner Connect is a website for individuals involved in the administration of Title IV federal student aid. Users can explore policy and operational guidance in the Knowledge Center, access helpful tools, find training announcements, or link to other Federal Student Aid websites to manage Title IV program eligibility and complete aid administration tasks.

Below are the key features of FSA Partner Connect:

• Knowledge Center – Repository of articles about the administration of Title IV federal student aid. You can subscribe to get the latest news and updates at fsapartners.ed.gov/subscriptions.


• Federal Student Aid Handbook – Web-based, searchable version of the Handbook found within the Knowledge Center portion of FSA Partner Connect.


• Training – Information about training and links to important training sites.


• Financial Aid Delivery – Information about the financial aid delivery process as well as links to sites to complete related tasks.


• Title IV Program Eligibility – Information about how schools can apply and maintain Title IV program eligibility as well as links to various sites to complete tasks in the eligibility process.


• School’s Dashboard – This page has a section for Origination and Disbursement Notifications that can help identify areas that need your immediate attention like unsubstantiated cash > 30 days, unresolved balances in closed award years, and balance confirmations needed.


• School Profile, School Financial Information – This page contains sections that are similar to the financial pages on the COD website but with some enhanced features, including the School Daily School Account Statement (SAS) Cash Information, School Funding Information, Cash Activity, and Refunds of Cash Information sections.


• School Options and General Information – This page contains sections with information on extended processing status and your SAS report selections.


• Student, Parent, Borrower Accounts – Access information about a student, parent, or borrower using simplified search functionality.


• Partner Search – Provides the ability to search and view information about a school.