In an effort to increase efficiency and improve funds control, Federal Student Aid is moving away from processing paper checks. Beginning January 1, 2015, FSA will no longer accept Direct Loan refunds of cash sent manually via paper check. The COD School Relations Center will not process paper checks for Direct Loan refunds of cash and will return them to the sender.


Schools now need to refund cash electronically via the G5 Web site. This method is faster and more secure than manual/paper processing, and is less likely to result in errors.


As noted in an April 2, 2013 Electronic Announcement, schools can refund cash manually via paper check in some cases; however, paper checks should only be used as an exception when a school is unable to process electronically or is instructed to refund cash via paper check in an audit or program review. If a school must refund cash via paper check, it must:

–        Make the check payable to the U.S. Department of Education and include the Direct Loan School Code or OPE ID and the award year to which the funds apply on the check. Note: If there is not enough information to allow the check to be processed, it will be returned to the school.

–        Include a completed Direct Loan Refunds of Cash transmittal sheet with the check. You will find the form at the following link:

–        Note: Funds should not be combined for multiple award years or multiple school codes. A separate check and transmittal sheet should be used for each award year and school.

–        Mail the check to the COD School Relations Center at:


Regular Mail/No Signature Required U.S. Department of Education Attention: Direct Loan Refunds of Cash P.O. Box 9001 Niagara Falls, NY 14302


Overnight Address/Requiring Signature U.S. Department of Education Attention: Direct Loan Refunds of Cash 2429 Military Rd, Suite 200 Niagara Falls, NY 14304 (Phone number for tracking form only: 716/284-2225)


Note: If a school is required to refund cash as part of a liability assessed in an audit or program review, it must follow the instructions provided by the issuing office.


If a school is returning cash as a result of refunds made to a borrower’s account, a corresponding downward disbursement adjustment must also be reported to the COD System. Also, remember that Direct Loan disbursements, disbursement adjustments, and refunds of cash, should be reported or submitted in whole dollar amounts only. The use of pennies in Direct Loan processing will impact a school’s ability to successfully complete its monthly reconciliation because its Net Drawdowns may not match the Net Disbursements reported to the COD System. For further information, refer to the following electronic announcements.



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