Bulletin ID
DLB - 97 - 17
| PublicationDate: 5/1/97 BulletinID: DLB - 97 - 17 May 1997 DLB-97-17 SUMMARY: This bulletin provides schools with important information regarding returning Direct Loan funds to the U. S. Department of Education. The bulletin discusses the "120-day rule," excess cash and payments to a borrower's account. In addition, it provides new mailing addresses and a new transmittal for returning excess cash and payments. Dear Colleague: Direct Loan Bulletin 96-13, dated August 1996, provided schools with a suggested Excess Cash/Payment Transmittal to use when returning PAPER CHECKS to the Department of Education. Since then, the addresses listed on the Transmittal enclosed with that bulletin have changed. Excess cash payments now go to the Loan Origination Center (LOC) in Montgomery, Alabama and payments to a student's account now go to the Direct Loan Servicing Center's new lockbox in Atlanta, Georgia. The new mailing addresses for returning excess cash to the LOC and returning payments to the Direct Loan Servicing Center are as follows: Direct Loan Origination Center Direct Loan Servicing Center ATTN: EXCESS CASH ATTN: PAYMENT CENTER P.O. Box 2011 P.O. Box 746000 Montgomery, AL 36102-2011 Atlanta, GA 30374-6000 THIS INFORMATION IS ALSO PROVIDED ON THE REVISED TRANSMITTAL ENCLOSED WITH THIS BULLETIN. This Transmittal may be used by those schools submitting paper checks to return Direct Loan funds and should NOT be used by schools returning cash via ACH or FEDWIRE. We encourage schools to use this form for all excess cash returned in the form of a check. (It is not required.) Feel free to make copies of the Transmittal or to modify it to best suit your school's needs. Please review both sides of the Transmittal. The instructions on the back assist schools in determining when funds should be returned as excess cash (WITHIN 120 DAY from the date of disbursement) OR as a payment back to a borrower's loan account (AFTER 120 DAYS from the date of disbursement.) Schools choosing to use the Transmittal would send a separate form with each excess cash or payment transaction. Page 2 - DLB-97-17 When determining if Direct Loan funds should be returned as excess cash or as a payment, please remember: The "action date," (the date a student withdraws, or drops below half-time, or the school identifies an overaward) determines whether funds should be returned as cash or as a payment to the student's account. It is the date of the activity that requires a school to return funds. The "action date" is not the date the date the refund is calculated or the date the adjustment or cancellation was entered into a computer system or reported to ED. 1. If the "action date" is WITHIN 120 DAYS from the disbursement date, the funds are to be returned as CASH. Schools should make an electronic adjustment or cancellation to the borrower's disbursement record using the correct "action date." If a school's loan origination level is Option 2, the school can use these funds (the amount that would otherwise be returned) for another borrower. 2. If the "action date" is AFTER 120 DAYS from the date of disbursement, the funds are to be returned as a PAYMENT to the borrower's account (refund the amount to the borrower's account). Schools should NOT make an electronic adjustment or cancellation to the borrower's account. This applies to all schools, regardless of the school's loan origination level. These funds CANNOT be used for another borrower. If you have any additional questions regarding the return of Direct Loan funds, please call your Customer Service Representative at 1-800-848-0978. Sincerely, Joe L. McCormick, Chair Direct Loan Task Force Enclosure [[The Direct Loans Suggested Excess Cash/Payment Transmittal form is currently unavailable for viewing. Please reference you paper document for additional information.]] |