I have a couple of students that had previous years charges, when I applied their loans for this year it did not apply it to the correct charges and I do not see how I can change it. I am afraid for audit purposes that I can not prove that I applied it to the correct charges.
Thanks
Status:
Answered
Hello,
Loans are applied to the account. Student Accounts does not have a corelation of the loan and charges other than through the term that is applied to the transaction. The weight of proof for audit is tied to the cost of attendance for a specific school year. In regards to prior balance you are not able to add to the cost of attendance a value that represents the prior balance. Thus as long as you show they had sufficient COA for the term/year then you are meeting the loan requirement for applicable costs. In regards to loans that are disbursed in access of the applicable charges for the year a refund check may need to be cut even if there is a balance from a prior year. This is related to regulation: 34 CFR 165(b)(5)(iii) or read FSA HB September 2018 4-20.
If you believe this is not sufficient please provide the Federal Regulation and I will look it over and work out a solution to make sure we are in compliance.
Thank you!
Dana
*GNECsis Support Specialist*
How do we comply with this requirement for students that have previous balances in excess of $200.00 if loans do not apply to specific charges?
https://ifap.ed.gov/sites/default/files/attachments/2019-12/1920FSAHdbkVol4Ch2.pdf 4-49 page
In part says:
Credit to the student’s account When a school disburses FSA funds to a student by crediting a student’s account, it may do so only for allowable charges associated with the current payment period (except for the allowances for prior year, late, or retroactive disbursements discussed elsewhere in this chapter). Note that Direct Loan funds credited to a student’s account must pay for current charges first.
Student Accounts/Financial Aid
Nazarene Theological Seminary
Kansas City (USA)