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Managing Direct Lending Cash Transactions

This section provides an overview of direct lending cash management and discusses how to manage Direct Lending cash transactions

Managing your Direct Lending cash transactions entails entering information for cash receipts, cash draw-downs, and return of excess cash, and then reconciling that information with similar information from the COD. You also reconcile individual student disbursements using the data in your Loan Application tables and the disbursement information from the COD. Reconciliation ensures on a monthly basis that your institution reviews and compares its Direct Lending origination and disbursements to student accounts against the cash balance reported by the COD.

For each reconciliation period, a comparison is made among Financial Aid, PeopleSoft Student Financials, and COD data. Data from all three sources should match. The Student Financials data shows dollars actually disbursed to students and the amount of each cash receipt and return of excess cash.

Your institution receives cash receipts from Grants Administration and Payment System (GAPS) and returns excess cash to GAPS. Usually, the Bursar's Office interacts directly with GAPS to request funds for Direct Loan disbursements to students. Work with your Bursar's Office or other appropriate office when using the Cash Reconciliation pages.

Understanding the Direct Loan School Account Statement

The COD sends the Direct Loan School Account Statement (DLSAS) to schools that participate in the Direct Lending program. The U.S. Department of Education's COD Technical Reference states that schools must reconcile their Direct Loan records on file at the COD with their internal Direct Lending records. This School Reconciliation process should be performed on a monthly basis.

Each school is responsible for reviewing the monthly statement to ensure the accuracy of the data. This data must also be reconciled to the school's internal student account records and bank records.

The general steps used in the Direct Lending Cash Management process are:

  1. Set up your Cash Transaction page for the aid year.

  2. Receive cash receipts cash drawdowns and return excess cash.

  3. Enter your cash receipt and return of excess cash information on the Cash Transaction page.

  4. Enter your cash receipt and return of excess cash information on the Cash Detail page.

  5. Use the online and report information to reconcile your institutional data with the COD data.

  6. Repeat Steps 2 - 5 for each Reconciliation Period.