RD60 - Report on the Development of Policies and Procedures Which Minimize the Use of Paper Checks When Issuing Any Reimbursements of Student Loan Balances


Executive Summary:
Report on the development of policies and procedures which minimize the use of paper checks when issuing any reimbursements of student loan balances from universities and community colleges. These efforts should include reimbursement through debit cards, direct deposits, or other electronic means.

Chapter 3, 2012 Appropriation Act requires the Department of the Treasury (Treasury) to work with universities and community colleges to reduce the use of paper checks when providing reimbursements for student loan balances as noted below:

"Item 277 G. “The State Treasurer shall work with universities and community colleges to develop policies and procedures which minimize the use of paper checks when issuing any reimbursements of student loan balances. These efforts should include reimbursement through debit cards, direct deposits, or other electronic means. The Treasurer shall report to the Chairmen of the House Appropriations and Senate Finance Committees on the status of these efforts on or before November 15, 1012.”

The Department of the Treasury formed a workgroup which included college, university and community college representatives and staff from the Department of Accounts and Treasury to develop policies and procedures that would enhance the use of electronic payments. In compliance with this request, the project team developed two documents:

1. Discussion Paper – Student Loan Refunds outlines the background of the student loan reimbursement process, current landscape, cost analysis, options and key considerations, regulatory environment, and conclusive recommendations of the project team.

2. Proposed Policy and Procedure for Converting Student Loan Refunds to Electronic Means outlines the proposed policy and procedures along with legal and regulatory requirements, and compliance and reporting requirements. Also discussed is the possible use of a third party vendor for the administration of such programs by the institutions.