Bulletin ID
DLB - 98 - 3
| PublicationDate: 2/1/98 BulletinID: DLB - 98 - 3 February 1998 DLB-98-3 CORRECTION: Contrary to the guidance originally provided in this notice, as required under 34 CFR 668.163(c)(4), institutions that currently maintain Federal Direct Loan, Federal Pell Grant, Federal Work Study, and FSEOG Program funds in interest-bearing accounts must remit to the Department any interest over $250 that they earn on those funds, including interest on funds they receive for the transition to GAPS. Please make note of this correction. SUBJECT: Additional Guidance on the Conversion to the Education Central Automated Processing System (EDCAPS) Dear Colleague: Donald Rappaport, Chief Financial Officer of the U. S. Department of Education, recently wrote to your Chief Financial Officer about the conversion to the new Education Central Automated Processing System (EDCAPS) and the new EDCAPS Grant Administration and Payment System (GAPS). The new system will be implemented on March 16, 1998. A recent Dear Colleague letter, GEN-98-5 (February 1998), also provides guidance on temporary procedures during the conversion period. After February 26, 1998, the Department's existing Payment Management System (PMS) will be unavailable. I am writing to provide additional guidance to Direct Loan schools. ALL DIRECT LOAN SCHOOLS NEED TO BE AWARE THAT FOR THE PERIOD FEBRUARY 27, 1998, THROUGH MARCH 15, 1998, NO DRAWDOWN REQUESTS OF ANY TYPE WILL BE HONORED. We recommend that Option 2 schools draw down the Direct Loan Program funds they reasonably expect to disburse to eligible student or parent borrowers during the shutdown period BY 3 P.M., FEBRUARY 25, 1998, WHETHER THEY ARE USING ACH OR FEDWIRE. This should ensure that there is sufficient time to process all drawdown requests. It is important to remember that any requests submitted during the shutdown period will not be processed during or after the transition period. Option 1 and Standard Origination schools will receive a drawdown of funds at the beginning of the transition. The drawdown will occur on FEBRUARY 20 for all anticipated disbursements to be funded during the period when the payment system is down. Schools should be sure that all information including loan origination records, promissory notes, and adjustments and cancellations related to loans to be funded during the shutdown period have been submitted to the Loan Origination Center (LOC) prior to February 20. In addition, all records for PLUS loan funds that will be advanced to schools during the transition period must be submitted by FEBRUARY 17 in order to allow the LOC time to process the necessary credit check. See GEN-98-5 for guidance concerning procedures and policy guidelines on the drawdown and maintenance of funds, excess cash, and the receipt of funds under the reimbursement method during the transition period. Immediately following the shutdown, any funds remaining of those drawn down for disbursements during the shutdown are to be treated as if they had been received on March 16, 1998. This means that schools have until COB March 19, 1998, to disburse those funds. If the funds are not disbursed by March 19, 1998, schools must return the excess cash to the regular address: Direct Loan Origination Center ATTN.: EXCESS CASH P. O. Box 2011 Montgomery, AL 36102-2011 Beginning March 16, 1998, schools and the Loan Origination Center (LOC) will draw down funds through GAPS. Option 2 schools may request funds by either using the GAPS web site at http://gapsweb.ed.gov, calling 1-800-654-8341, or through EDExpress. For schools that draw down using EDExpress, the record format remains the same. However, schools will no longer receive an acknowledgment for funds requested with EDExpress. The Department's GAPS training website is located at http://gapsweb.ed.gov/training. A hotline for technical assistance will be available March 16, 1998, at 888-336-8930. You may also call your GAPS account representative listed in Enclosure B of the Chief Financial Officer's letter. We are committed to providing the best level of service to you. Thank you for your ongoing support of the Direct Loan Program. Sincerely, Joe L. McCormick Chair Direct Loan Task Force |