Procedure CR2017 - Bernreuter Loan Funds for Non-University Park Locations
Policy Steward facilitating procedure: Assistant Vice President for Student Financial Aid
Table of Contents:
- MAKING THE LOAN
- REPAYING THE LOAN
- NON-PAYMENT OF EMERGENCY LOANS
- REIMBURSEMENT OF THE BERNREUTER EMERGENCY LOAN FUND AT NON-UNIVERSITY PARK LOCATIONS
- COLLECTION AGENCY
- NON-PAYMENT OF SHERT TERM LOANS
- INCREASING THE EMERGENCY LOAN FUNDS
- PROCESSING RETURNED CHECKS
- AUDIT COORDINATION - FINANCIAL AND PROCEDURAL
- RECORD RETENTION, DISPOSITION AND DESTRUCTION
- CONTACT INFORMATION
- CROSS REFERENCES
An emergency loan fund has been established for students at non-University Park locations who have an immediate need for short term cash. If the need is not immediate, short term loan procedures should be followed. The fund is recorded as a part of the permanent trust funds in Student Financial Services at University Park Campus. Each non-University Park location has been advanced a portion of this fund to be administered by the Campus Designated Official and the Financial Officer. The funds advanced are deposited in the operating cash fund at the college/campus.
The terms and conditions under which loans are to be granted are stipulated by the individual non-University Park locations. That stipulation shall recognize the emergency, short term nature of the loan program. A copy of the Bernreuter Report of Emergency Loan Fund current at each non-University Park location shall be filed annually with the Office of the Assistant Vice President for Student Financial Aid at University Park and with the Director of Student Financial Services.
Non-payment of an emergency loan or a short term loan will result in a "hold" on a student's academic record and ultimate submission of the debt to a collection agency. The fund will be replenished when these accounts are written off.
A student wishing to apply for an emergency loan must go to the campus designated official to discuss his/her need and to complete an Official Recommendation for Emergency Bernreuter Loan form in duplicate ( Exhibit "A" ). If funds are available and if the request is felt to be an emergency, the campus designated official will approve the Recommendation and have the student take the signed original to the college/campus Financial Officer. The copy is retained.
The financial Officer will prepare an operating cash fund check payable to the student for the amount recommended. The student must sign the Recommendation form, acknowledging receipt of the loan, and complete a Promissory Note ( Exhibit "B" ), including a time of repayment, home address, phone number and if different, his/her local address and phone number. The Financial Officer should request identification from the student to verify this information before granting the loan.
The Financial Officer will assign a note number to both the Recommendation and Promissory Note and file the Recommendation in due date order. The Promissory Note is recorded onto a ledger sheet ( Exhibit "C" ) and filed in alphabetical order by student name.
A student wishing to apply for a short term loan must contact the campus designated official to discuss his/her need for a Bernreuter Short Term Loan. If funds are available and if the request is deemed warranted, the campus designated official will enter a Short Term Loan Application is ISIS on the AFAT Screen.
From a computer with internet access, the student must go to the eSignature web site to electronically sign the promissory note. The student must have two references other than their parents to complete the promissory note.
Once the short term loan is electronically signed, Student Financial Services at University Park will automatically receive email notification for processing the loan.
Student Financial Services will process daily all loans received prior to 4:00 p.m. via Lquest. When the loan is processed, the proceeds will be disbursed into the student account and refunded. Upon disbursement, an "L" hold will be placed on the student's account. An "L" hold indicates that there is a short term loan outstanding and prevents refunding of the student account balance.
Automated Clearing House (ACH) is the recommended method for refunding the balance in the student account. A student can enroll for ACH online through eLion under the "Refund Information" link.
If the student is enrolled in ACH, the refund will reach the student's bank account in approximately three (3) banking days. If a student is not enrolled in ACH, a check will be produced overnight and mailed to the address selected on the ABRT screen (see Exhibit "B" ) in IBIS. Students must select a refund address if not enrolled in ACH in order for a refund to be issued.
When a student repays his emergency loan at the Finance Office, the Financial Officer will pull the student's Promissory Note and Recommendation from their respective files and mark/stamp each "Paid". A Pre-numbered Receipt is prepared in triplicate according to instructions on GURU. The original is given to the student with the Promissory Note. The Recommendation is filed in a closed file in note number sequence. The pink Financial Officer copy of the Pre-numbered Receipt is retained by the Financial Officer for audit purposes, and the yellow departmental copy is forwarded to the Director of Student Programs and Services to be marked in his/her records. The repayment, if made by check, is made payable to the name of the operating cash fund custodian and deposited into the operating cash fund. Repayments may also be made in cash.
When funds are credited to the student account, the loan will be repaid by charging the student's account. When the loan is not based on future aid, the student will be billed Student Financial Services as detailed under Collection Procedures below.
The student must make payment to University Park - Student Financial Services or to the campus they attend.
If the payment is accepted at the campus, the payment must be posted to the ABAS screen in ISIS. Student Financial Services must be contacted by phone or by clicking on "Contact Us" on the office web site.
Emergency loans that are past due, as determined by the due date file of Recommendations, are acted upon by the Financial Officer. A Reminder Notice ( Exhibit "D" ) is prepared in triplicate. The original is mailed to the student and one copy to the Campus Designated Official, while the remaining copy is retained in a "pending" file. A hold is placed against the student's account (according to established procedures) which will prevent the student from obtaining copies of their transcript and/or registering at the University until the loan is paid in full.
If the student has not repaid the loan within thirty days of the original due date, a second letter, Past Due Notice ( Exhibit "E" ) is prepared in triplicate. The original is mailed to the student, one copy is forwarded to the Campus Designated Official, and one copy is retained in the student folder by the Financial Officer. If no payment or contact is made within thirty days of issuing the Past Due Notice, a Final Notice ( Exhibit "F" ) is prepared in triplicate. The original is mailed to the student, one copy is forwarded to the Campus Designated Official and one copy remains in the student's folder.
After fifteen days, if no payments are received or contact made, the Financial Officer will prepare an authorization for Collection Action form ( Exhibit "G" ) in original and three copies. The original and one copy of the Authorization are included with all copies of the collection letters, Recommendation for Bernreuter Emergency Loan, and Promissory Note pertaining to that student. This folder is sent to the Director of Student Financial Services at University Park requesting reimbursement of the College/Campus Emergency Loan Fund. If more than one student is included, a cover memo will summarize the students and amounts involved. One copy of the Authorization for Collection Action is forwarded to the Campus Designated Official, and the remaining copy is retained as evidence of the reimbursement request.
Upon receipt of the memo and supporting documentation from the non-University Park locations, the Director of Student Financial Services will prepare a Special Request for Check form in GURU charging the Trust Fund Reserve Account, Budget 966-01, Fund 1932, Object Class 422. The check is made payable to the name of the custodian of the non-University Park location operating cash fund. A list is sent with the check indicating the student's number, name, and amount to be collected if payment is made at the location ( Exhibit "H" ). The check will be mailed to the name of the custodian of the operating cash fund to replenish the Bernreuter Emergency Loan Fund for notes found to be uncollectable by the location. All supporting documents received from the location will be retained for audit purposes.
Before additional collection action is taken, each delinquent student is checked against current University registration. An appropriate registration hold should appear on the student's records. If no hold appears, a hold is placed directly into the computer for action at the next registration.
No further action is taken on notes under $100. Notes due for $100 and more from all students are periodically detailed onto collection agency forms by the Director of Student Financial Services. The collection agency under contract to the University will pursue all means at their disposal to collect the amounts due. Any costs incurred by the University as a result of this pursuit will be chargeable to the student.
Any collections received from the agency (or directly from the student as a result of the agency action) are deposited into the Trust Fund Reserve Account, Budget 966-01, Fund 1932, Object Class 422 and/or Clearing Account, Budget 966-99, Fund 1931, Object Class 423, depending upon principal or interest/fees payment. The appropriate fees are paid by check to the agency for services rendered. The Clearing Account is charged for the payment of collection agency fees.
A reminder notice is sent to the student 30 days prior to the loan due date. If the loan is not repaid by the 15th day of the month following the due date, a billing statement will be sent to the student for the amount due (see Exhibit "C" ). Monthly billing statements will be sent until the account is 75 days past due. If there is no response from the student, a final notice (see Exhibit "D" ) is sent and a hold is placed on the student's account preventing transcripts from being requested and future registration from occurring.
Once the student leaves the University, if the account is still unpaid, the account will be eligible for placement with a licensed collection agency. The collection agency under contract to the University will pursue all appropriate means at their disposal to collect the amounts due. Any costs incurred by the University as a result of this pursuit will be chargeable to the student.
Each fiscal year end (June 30), the Financial Officer must report the status of the Emergency Loan Fund to the Director of Loans and Scholarships using the format shown in Exhibit "I" . This report is prepared in original and three copies, with one copy forwarded to the Campus Designated Official at the college/campus and one retained in the Financial Officer's file.
Two copies are forwarded to University Park; one to the Assistant Vice President for Student Financial Aid and the original to the Director of Student Financial Services.
If local demands for emergency loans are temporarily high, the Executive Officer of each college/campus, or his/her designee, may request in writing an additional amount of emergency funds from the Assistant Vice President for Student Financial Aid at University Park. These advances will be of a short term nature and must be repaid when the temporary demand has past.
The Assistant Vice President for Student Financial Aid at University Park will authorize the Director of Student Financial Services to advance an amount, if available, from the Bernreuter Emergency Loan Fund to the college/campus operating cash fund. A record of available funds, advances outstanding, and repayments is maintained in the Office of Loans and Scholarships. The Assistant Vice President for Student Financial Aid is responsible for the allocation of Bernreuter Emergency Loan Funds among the non-University Park locations.
Any temporary advance authorized by the Assistant Vice President for Student Financial Aid may be recalled by him/her via letter to the Campus Designated Official (carbon copy to the Financial Officer and Director of Student Financial Services) as the need in other locations may dictate.
Any funds directed to be returned to University Park are to be transferred by check from the operating cash fund to the Director of Student Financial Services by the Financial Officer. (Checks are to be made payable to "The Pennsylvania State University.")
Any contributions to any emergency or other loan funds received by the non-University Park locations must be reported on the Gift Reporting and Transmittal (GRT) form in accordance with the instructions contained on GURU. A copy of the GRT must be forwarded to Student Financial Services by the Office of University Development so they can increase the loan fund and track individual college/campus balances.
The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Audit when audits are being performed in the administrative area, as well as performing an annual audit that is submitted to the Assistant Controller.
Record retention must be managed in accordance with Policy AD35 - University Archives and Records Management , and records schedules approved by the Records Management Advisory Committee, Office of General Counsel, and Office of the President. These retention requirements are the University's retention criteria, either derived or based upon federal, state, and local statute or regulations, industry standards, and business needs. Retention beyond recommended time periods require justifiable reasons and warrant review by the Records Management Officer or designee. All documents must be maintained in such a manner so as to provide ease of access for review, and to provide a suitable audit trail for all transactions.
- Documents subject to a Legal Hold (see AD35, Legal Hold). A legal hold will remain in effect until it is released in writing by the Office of General Counsel.
- Documents under audit or review, either internally or externally. The retention period extends until released by the Corporate Controller's Office. The Financial Officer will be notified regarding any accounts which are under audit; the Financial Officer will be responsible for contacting the department.
Additional questions may be directed to the University Archivist or the Records Management Officer.
- Exhibit A - Official Recommendation for Emergency Bernreuter Loan Form
- Exhibit B - Promissory Note Screen
- Exhibit C - Promissory Note ledger sheet
- Exhibit D - Reminder Notice
- Exhibit E - Past Due Notice
- Exhibit F - Final Notice
- Exhibit G - Collection Action Form
- Exhibit H - Payment List
- Exhibit I - Status of Emergency Loan Fund
For questions, additional detail, or to request changes to the procedures, please contact the Assistant Vice President for Student Financial Aid
- Policy AD22 - Health Insurance Portability and Accountability Act
- Policy AD35 - University Archives and Records Management
- Procedure CR2002 - PROCESSING RETURNED CHECKS
- Blue/White Shredding Program
Date Approved: 1/18/2005
Most recent changes:
- Revision 2 - dated 12/10/2004
Revision History (and effective date:)
- Revision 1 - dated 05/01/1990
- Original - dated 05/06/1986