C.F.R. » Title 34 » CHAPTER VI—OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION › PART 668—STUDENT ASSISTANCE GENERAL PROVISIONS › Subpart K—Cash Management

34 C.F.R. § 668.162

Requesting funds

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(a) General. The Secretary has sole discretion to determine the method under which the Secretary provides title IV, HEA program funds to an institution. In accordance with procedures established by the Secretary, the Secretary may provide funds to an institution under the advance payment method, reimbursement payment method, or heightened cash monitoring payment method.

(b) Advance payment method. (1) Under the advance payment method, an institution submits a request for funds to the Secretary. The institution's request may not exceed the amount of funds the institution needs immediately for disbursements the institution has made or will make to eligible students and parents.

(2) If the Secretary accepts that request, the Secretary initiates an EFT of that amount to the depository account designated by the institution.

(3) The institution must disburse the funds requested as soon as administratively feasible but no later than three business days following the date the institution received those funds.

(c) Reimbursement payment method. (1) Under the reimbursement payment method, an institution must credit a student's ledger account for the amount of title IV, HEA program funds that the student or parent is eligible to receive, and pay the amount of any credit balance due under § 668.164(h), before the institution seeks reimbursement from the Secretary for those disbursements.

(2) An institution seeks reimbursement by submitting to the Secretary a request for funds that does not exceed the amount of the disbursements the institution has made to students or parents included in that request.

(3) As part of its reimbursement request, the institution must—

(i) Identify the students or parents for whom reimbursement is sought; and

(ii) Submit to the Secretary, or an entity approved by the Secretary, documentation that shows that each student or parent included in the request was—

(A) Eligible to receive and has received the title IV, HEA program funds for which reimbursement is sought; and

(B) Paid directly any credit balance due under § 668.164(h).

(4) The Secretary will not approve the amount of the institution's reimbursement request for a student or parent and will not initiate an EFT of that amount to the depository account designated by the institution, if the Secretary determines with regard to that student or parent, and in the judgment of the Secretary, that the institution has not—

(i) Accurately determined the student's or parent's eligibility for title IV, HEA program funds;

(ii) Accurately determined the amount of title IV, HEA program funds disbursed, including the amount paid directly to the student or parent; and

(iii) Submitted the documentation required under paragraph (c)(3) of this section.

(d) Heightened cash monitoring payment method. Under the heightened cash monitoring payment method, an institution must credit a student's ledger account for the amount of title IV, HEA program funds that the student or parent is eligible to receive, and pay the amount of any credit balance due under § 668.164(h), before the institution—

(1) Submits a request for funds under the provisions of the advance payment method described in paragraphs (b)(1) and (2) of this section, except that the institution's request may not exceed the amount of the disbursements the institution has made to the students included in that request; or

(2) Seeks reimbursement for those disbursements under the provisions of the reimbursement payment method described in paragraph (c) of this section, except that the Secretary may modify the documentation requirements and review procedures used to approve the reimbursement request.

Notes of Decisions
Cited in 4 cases, 2003–2019 · leading case: United States Ex Rel. Graves v. ITT Educ. Servs., Inc., 284 F. Supp. 2d 487 (S.D. Tex. 2003).
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United States Ex Rel. Graves v. ITT Educ. Servs., Inc., 284 F. Supp. 2d 487 (S.D. Tex. 2003). “34 C.F.R. § 668.162 (b). ITT and PwC argue that nothing in this regulatory process identifies a “claim” that ITT submits to the government for payment.”
Eisenberg v. Pennsylvania State Univ. (In re Lewis), 574 B.R. 536 (Bankr. E.D. Pa. 2017). “, after the school requests the funds in accordance with 34 C.F.R. § 668.162 .” 12 The Trustee concedes that the proceeds from the Parent Plus loans were paid directly to Penn State, bypassing Mr.”
Int'l Junior Coll. of Bus. & Tech., Inc. v. Duncan, 802 F.3d 99 (1st Cir. 2015). “We note, however, that the DOE has discretion regarding when to place institutions on Heightened Cash Monitoring, 34 C.F.R. § 668.162 (a)(1), and the school does not dispute that the reason International was placed on Heightened Cash Monitoring was because the DOE had concerns…”
Kelly-Creekbaum v. L'Academie De Cuisine, Inc. (D. Maryland 2019). “1 ¶ 31) (citing 34 C.F.R. § 668.162 (b)(3)). Funds that are held beyond three days constitute “excess cash,” and institutions are required to refund that “excess cash” to the DOE within seven days.”
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