CHAPTER 5 REMITTANCE OF COLLECTIONS
CHAPTER 5 REMITTANCE OF COLLECTIONS
As long as a school continues to participate in the Health Professions or Nursing FCC Loan Program, collections of principal, interest, and penalty charges from borrowers in repayment status and other income may be kept in the programs for making loans to other students. These collections need not be remitted to the Federal Government unless the school determines it has excess cash on hand.
As stated in Chapter 4, Section 4, Review of Excess Cash, participating institutions are required to review the balance in each fund on at least a semi-annual basis to determine excess cash. When determining excess cash, school officials should consider the following:
In addition, schools should:
Schools should not retain more funds than are needed. If any portion of the amount allowed for the safety margin is not needed, that amount should be considered excess cash.
If the school determines it has excess cash, it must return the Federal share of the excess cash to the Division of Financial Operations. Make the check payable to "Public Health Service, HRSA" and include in a letter containing the following information:
Send the remittance and letter to the following address:
If the amount determined to be excess cash is not intended to be returned to the Federal Government, the school must submit to the Division of Student Assistance within 45 days of the end of the reporting period an explanation for retaining the funds, including specific details as to how the determination was made. The school's determination is subject to review and approval. Correspondence should be sent to the following address:
Institutions in close-out status for the Health Professions or Nursing FCC Loan Program must review the balance in each fund on a quarterly basis, and remit the Federal share of the ending cash balance. Schools phasing out of the Health Professions or Nursing FCC Loan Program (i.e., closing programs) who have little or no activity should request a liability statement. When a school finalizes its agreement with the Federal Government, it is no longer required to submit an Annual Operating Report. Requests for liability statements should be directed to:
Because it is the Federal Government's intent to always recover its proportionate share of any interest, penalty charges and other income collected (less its proportionate share of expenses) before any repayments are applied to principal, the worksheet at Exhibit F should be used until the initial interest amounts have been recovered.
Those schools that have been in closing status for some time and have repaid the initial bulk of interest to the Federal Government should use the worksheet at Exhibit G.
The school's remittance to the Federal Government should be made in accordance with the instructions in Section 1 B1 above for remittance of excess cash.
