Credit Balance
You can manage student credit balances.
Overview
A Federal Student Aid (FSA) Credit Balance occurs whenever the total amount of FSA is credited to a student’s account and the total amount exceeds the student’s allowable charges. When FSA disbursements to a student’s account create a Credit Balance, it must be paid directly to the student or parent as soon as possible, but no later than 14 days. Institutions are permitted to hold Credit Balances if a voluntary authorization form is obtained from the student (or parent, in the case of PLUS). If an Authorization to Hold form has been obtained, the institution must identify the amount of funds it is holding for the student or parent in a subsidiary ledger account designated for that purpose.
A Non-FSA Credit Balance occurs whenever there are Non-FSA funds on a student’s account, but there are no open-charges the Non-FSA funds can be applied toward.
Student Financial Planning receives Authorization to Hold information from both the student and/or parent and uses the information to calculate the Credit Balance. Student Financial Planning triggers the Credit Balance calculation to occur each time a Student Academic and Financial Information (SAFI) message is received and a payment or discount that is flagged to be included in the Credit Balance calculation has an open-balance or an FA eligible charge has an open-balance. Additionally, a Credit Balance calculation is triggered if the Authorization to Hold information is received for either the student or parent and is updated, or after a Return to Title IV and Grant Overpayment calculation is complete.
The Credit Balance calculation evaluates whether the open balances of the student's funding exceeds the student's open balance of the current year allowable charges plus the prior year's outstanding balance (limited to $200). If there is a Credit Balance, Student Financial Planning determines the associated fund and correct recipient and triggers an outbound message to inform the institution to cut a check to the student, parent, or lending source.
The institution can manually create or adjust a Credit Balance within the Student Financial Planning User Interface (UI).
What Student Financial Planning Does Automatically
Student Financial Planning automatically does the following things:
Receives and Displays the Student/Parent's Authorization to Hold Elections
Student Financial Planning receives the student and/or parent's initial and subsequent elections and saves them to apply Credit Balances appropriately while the student is enrolled at the institution. Student Financial Planning always uses the most recent ATH decision when determining whether to include projected charges for the Credit Balance calculation.
Effective July 1, 2016, additional authorization is required to apply financial aid to Resource Fees. Student Financial Planning accepts the student and/or parent's authorization to hold for resource fees and uses their elections to determine the correct Credit Balance amount. The ATH for Resource Fees is only displayed on the Credit Balance screen if the student and parents elections are different. Note, the authorization date is the date of the authorization for resource fee.
If the student/parent's Authorization to Hold Resource Fee election is false or has not been received, Student Financial Planning should not include discounts that are being applied to Resource Fees when determining the credit balance. In order to determine whether a discount is being applied to a Resource Fee, a Resource Fee Indicator is used in the Student Academic and Financial Information message (SAFI).
Include Actual Discounts in AcYr and Estimated Discounts in PP when:
- Authorization to Hold Election is True
- Authorization to Hold Resource Fee Election is True
Not applicable for Resource Fee Indicator
Include Actual Discounts in AcYr and Estimated Resource Discounts in PP when:
- Authorization to Hold Election is Null or False
- Authorization to Hold Resource Fee Election is True
- Resource Fee Indicator is True
Include Actual Non-Resource Discounts in AcYr and Estimated Non-Resource Discounts in PP when:
- Authorization to Hold Election is True
- Authorization to Hold Resource Fee Election is Null or False
- Resource Fee Indicator is Null or False
Include Actual Non-Resource Discounts in AcYr and No Estimated Discounts in PP when:
- Authorization to Hold Election is Null or False
- Authorization to Hold Resource Fee Election is Null or False
Not applicable for Resource Fee Indicator
Determines Between the Prior and Current Award Year
An institution may use up to $200 from the Current Year Credit Balance to pay Prior Year charges for tuition, fees, room, or board (and with permission, educationally related charges). If configured, Student Financial Planning calculates the prior award year Credit Balance and determines which Award Year to apply the Credit Balance. If not configured, Student Financial Planning calculates the current award year Credit Balance only.
Completes and Displays the Credit Balance Calculation
Student Financial Planning completes a Credit Balance calculation when new information is received from the Student Information System (SIS) and/or the Student Accounting System (SAS) via the Student Academic Financial Information (SAFI) message or a new ATH decision is received to determine whether a Credit Balance exists. If student level charges are included in the SAFI message, Student Financial Planning determines if they are FA eligible and includes them in the Credit Balance calculation. The charge date is used to determine which year the charge is associated to. If there is a pending Credit Balance, Student Financial Planning holds the Credit Balance Calculation because the unapplied amount has not been updated yet.
After the Credit Balance is posted in the student's ledger, the Student Accounting System sends the amount to Student Financial Planning via the Student Financial and Academic Information (SAFI) message. This amount is saved to the database and displayed on the Student Financial Planning User Interface and used in reports as needed.
Displays the Credit Balance Trigger:
- Return to Title IV (R2T4): Credit Balance was calculated while the student was in a Withdrawn status
- Disbursement: Credit Balance was created within 14 days of any TIV Disbursement Date
- Excess Funds: Credit Balance occurs when the student is not in a Withdrawn status and no TIV disbursements occurred within the past 14 days
Zero Credit Balance Calculations
Each time the SAFI is received, Student Financial Planning calculates whether a Credit Balance occurred. If the SAFI contains the "Accounting Updates Indicator" and it is equal to true, Student Financial Planning displays the Credit Balance calculation and the respective data used even if the amount is $0. If a QC hold for Credit Balances is configured, Student Financial Planning holds the $0 Credit Balances for QC Review if the SAFI triggering the calculation included the "Accounting Updates Indicator" as true. However, Student Financial Planning does not send an Outbound Message to the Student Accounting System if the calculated Credit Balance is $0.00.
Applies a Credit Balance Calculation Hold (If Applicable)
Hold Credit Balance Calculation until all Pending Credit Balances have been ResolvedIf there are any pending Credit Balance calculations that have not fully processed, Student Financial Planning does not perform a new Credit Balance Calculation. If the recipient of the Credit Balance is Student or Parent and the status of the Credit Balance is Pending, the Credit Balance calculation is held until the status updates to Cut to Recipient. If the recipient of the Credit Balance is Return to Lender, the Credit Balance calculation is held until the associated payment is returned and the return is posted to the student's ledger.
Hold Credit Balance Calculation until all Pending Returns have been Resolved
Student Financial Planning holds the Credit Balance calculation, if there are any disbursements with a status equal to Disbursement, Returned associated to the student/program the Credit Balance calculation is for and the return has not posted to the student's ledger. When the Return to Title IV calculation (R2T4) is complete, the refund was processed and has posted to the student ledger, Student Financial Planning will proceed with the triggered Credit Balance calculation.
Hold Credit Balance Calculation prior to the R2T4 being completed for Withdrawn/Deceased Students
If the student's enrollment status is Withdrawn or Deceased and an R2T4 calculation is required, but incomplete Student Financial Planning does not complete the Credit Balance calculation until the R2T4 calculation is complete.
Calculates the Prior Year Outstanding Balance
Student Financial Planning calculates the Prior Year's Outstanding Balance by adding all of the open balances for allowable charges (including all FA eligible charges) associated with the prior year and then subtracts the sum of all unapplied amounts for all payments and discounts associated with the prior year.
Calculates the Current Year Credit Balance
To calculate the current year Credit Balance Student Financial Planning adds all of the open balances for the current year's allowable charges and then subtracts the unapplied amounts for the current year's discounts and the unapplied amounts for the current year payments. If the unapplied amount for the current year payments exceeds the open-balance for the current year charges minus the unapplied amounts for the current year discounts, then a Credit Balance has occurred.
If there is a Prior Year Outstanding Balance, and there is a Credit Balance in the current year, Student Financial Planning subtracts up to $200 from the current year and applies it toward the Prior Year's Outstanding Balance.
Authorization to Hold = True
If the student/parent has elected to have the institution hold the Credit Balance to pay for future charges, Student Financial Planning takes into account both projected and actual allowable charges and discounts in the current year/payment period.
Authorization to Hold = False
If the student/parent does not elect for the school to hold the Credit Balance to pay for future charges, Student Financial Planning only takes into account the actual allowable charges and discounts in the current year. If the Authorization to Hold election is not present for the student/parent, it is assumed that the Authorization to Hold election is False.
Student and Parent's Authorization to Hold Elections Differ
If the student has Direct Plus Loan disbursed in the current year with an unapplied amount, Student Financial Planning determines, whether the Authorization to Hold election for the parent, is different from the student. When the elections differ Student Financial Planning completes two different calculations, one based on the Authorization to Hold being True and the other based on the Authorization to Hold being False.
The two Credit Balance amounts are calculated and associated with the appropriate funds. If the Direct Plus Loan is associated to the Credit Balance, Student Financial Planning uses the parent's Authorization to Hold election, to determine the associated amount for the Direct Plus Loan and any remaining Credit Balance is associated with other funds with unapplied amounts using the student's Authorization to Hold election.
Determine the Fund Source Associated to the Credit Balance
Each time a Credit Balance occurs, Student Financial Planning uses the Fund Refund Priority order configured by the institution to determine which disbursed fund(s) that have an unapplied amount to associate the Credit Balance with. The Credit Balance amount associated with the fund depends on how much has been disbursed and applied in the current year.
Example
| Fund Source Amount | Priority | Disbursed Amount | Unapplied Amount |
|---|---|---|---|
| Pell | 4 | $5,550 | $0 |
| DLSUB | 3 | $3,500 | $0 |
| DLUNSUB | 2 | $2000 | $0 |
| DLPLUS | 1 | $1000 | $1000 |
If the student has a $1,500 Credit Balance and Student Financial Planning follows the institutions Fund Refund Priority, $1,000 is associated with the Direct PLUS Loan and the remaining $500 is associated to the Direct Unsubsidized Loan.
Determine the Credit Balance Recipient
Each time a Credit Balance occurs, Student Financial Planning first determines the fund source and then determines the Credit Balance Recipient. If the student/parent did not make an election, the recipient defaults to the borrower. If the student is deceased, the Credit Balance recipient will be the lender.
If any portion of the Credit Balance is associated with a Direct PLUS Loan, Student Financial Planning determines the recipient using information provided on the PLUS Application.
Send a Credit Balance Notification to the Student Accounting System (SAS)
Once Student Financial Planning has identified the Credit Balance Recipient, it sends the Student Accounting System (SAS) a notification so the Credit Balance is sent to the correct recipient and updates the payment unapplied amounts.
What happens if the student/ parent returns the Credit Balance check?
If the student or parent are the recipients of the Credit Balance and they return a check, the SAS notifies Student Financial Planning. Upon notification that a check has been returned by the student/parent Student Financial Planning determines which disbursement the Credit Balance is associated with, the fund source, and returns the fund(s) to the lender. As a result of decreasing the disbursement or a reduction in funds Student Financial Planning updates Common Origination & Disbursements (COD) and the next G5 drawdown will net out the returned amount.
After repackaging the student, Student Financial Planning updates the Credit Balance Recipient from Student or Parent to Return to Lender.
Returning Credit Balances as a Result of the Check Being Returned
Upon receiving the Student Financial and Academic Information (SAFI) message, Student Financial Planning checks whether any previous Credit Balance(s) were returned. If any Credit Balances were returned, Student Financial Planning returns the Credit Balance to the lender. This results in decreasing the disbursement that is associated with the specific Credit Balance and updates the Credit Balance recipient to Returned to Lender. The Credit Balance status updates to Check Returned.
Student Financial Planning determines the disbursement associated with the Credit Balance, then determines the fund associated with the disbursement, and reduces the disbursement in the academic year associated with the disbursement by the Credit Balance amount. Reducing the Credit Balance triggers the common record files to be sent to COD as applicable, the Return to Lender Outbound Message to be triggered, and the next G5 draw down to net out the returned amount.
After reducing the disbursement, Student Financial Planning updates the Credit Balance Recipient to Return to Lender and the Credit Balance status to Check Returned. However, the Credit Balance ID and the Credit Balance amount remain the same. Lastly, Student Financial Planning triggers a new Credit Balance Outbound Message with the updated recipient information.
Applies the Credit Balance to resolve a Grant Overpayment
If a Grant Overpayment exists, Student Financial Planning applies the Credit Balance toward the Grant Overpayment before it begins associating the Credit Balance to any fund source. Student Financial Planning decreases the associated disbursements.
If there is a remaining Credit Balance amount after resolving all Grant Overpayments, Student Financial Planning applies the remaining amount to the funds using the normal process and sends the Credit Balance to the student, parent or lender appropriately.
If the student is Withdrawn, Student Financial Planning follows normal procedures and returns any resulting Credit Balances to the student or parent depending on the fund.
If the student is Deceased, and a Credit Balance exists, Student Financial Planning returns any resulting Credit Balance to the appropriate Title IV Fund source and reduces/returns these funds using the Reduction of Funds process and upon completion, updates the recipient of the Credit Balance from Student to Return to Lender.
Sends an outbound message upon Completing the Credit Balance Calculation
Student Financial Planning sends an Outbound Message once the Credit Balance is calculated. The message includes the Fund Source, Amount, Payment Period, Sequence Number and Payment ID Number. Once delivered, Student Financial Planning receives a new SAFI message with a Credit Balance ID Number.
Cancels the Credit Balance
When a Credit Balance is canceled in the Student Accounting System, it is sent to Student Financial Planning via the SAFI message in a Canceled status. Once the SAFI is received, Student Financial Planning updates the status and the Credit Balance to zero.
Configurable Attributes
Configure whether to include the Prior Year Outstanding Balance when determining the Credit BalanceYou can configure whether Student Financial Planning will include prior year charges up to $200 in the Credit Balance calculation. Student Financial Planning will look at this configuration when determining whether to calculate the Prior Year Outstanding Balance and subtract the amount from the Credit Balance calculated if the configuration is set to include the Prior Year Outstanding Balance (up to $200).
Navigation to the Student Financial Planning User Interface Functionality
To View the Credit BalanceLog into the Student Financial Planning User Interface (UI)
- Enter the student's name, external student ID number or social security number
in the search field located in the upper right-hand corner
- Because Student Financial Planning returns results for any data entered, the student search can be based on complete or partial information
- Select the Student Record from the Student Search Results pop-out dialogue box
- Hover over the Financial Aid Tab
- Click Credit Balance
- Click Credit Balance (default view)
- Review the Credit Balance(s)
- Credit Balance Trigger (See information about credit balance trigger earlier in this topic)
- Click any link to view the Charge, Discount and Payment Details
- Charge, Discount and Payment Details
To View Authorization to Hold Elections
Log into the Student Financial Planning User Interface (UI)
- Enter the student's name, external student ID number or social security number
in the search field located in the upper right-hand corner
- Because Student Financial Planning returns results for any data entered, the student search can be based on complete or partial information
- Select the Student Record from the Student Search Results pop-out dialogue box
- Hover over the Financial Aid Tab
- Click Credit Balance
- Click Authorization to Hold
- Review the Authorization to Hold Elections (Student and/or Parent)
- Review the Authorization to Hold Resource Fee Election (Student and/or Parent)