Re: bursar-l: student direct deposits

Trudy: Under new rules that took effect last July, institutions can now
require direct deposit for student credit balance refunds, BUT if
students fail to provide bank account information the institution must
still make the payment with a check within the regulatory time frames.
Note that this provision does not apply to FWS wages since there is a
separate provision in the FWS rules that did not get changed. See
http://www.nacubo.org/x9481.xml <http://www.nacubo.org/x9481.xml> for a
link to the Nov 1, 2007, Federal Register notice.
 
This was a change stemming from a comment submitted in response to the
proposed rules. Here is the discussion from the preamble.
 

        Comments: One commenter disagreed with the provision in Sec.
        668.164(c)(3), under which an institution may request, but not
require
        or rely upon, the student to open a bank account. The commenter
        believed that an institution should have the flexibility to
require a
        student to authorize an EFT, noting that this practice is used
by many
        employers for payroll purposes.
            Discussion: The Department intended to make it easier for an

        institution to make EFT payments by removing the requirement in
Sec.
        668.165(b)(1)(i) that the institution first obtain authorization
to
        disburse Title IV funds to a bank account designated by the
student or
        parent. The provisions proposed in Sec. 668.164(c)(3) relate to

        situations where the institution opens a bank account on behalf
of the
        student (or is actively involved in opening the account) for the

        purpose of making EFT payments of Title IV funds to that
account. For
        these cases only, the institution must obtain the consent of the

        student or parent before it opens the bank account. In all other
cases,
        the Department agrees that an institution may establish a policy

        requiring a student to provide bank account information or open
an
        account at a bank of the student's choosing, as long as this
policy
        does not delay the disbursement of Title IV funds to the
student. Thus,
        if a student does not provide bank account information or does
not
        maintain a bank account--e.g., the student does not qualify for
a bank
        account or refuses to open an account--the institution must
        nevertheless disburse the Title IV funds to the student in a
timely
        manner by some other means.
            Changes: Section 668.164(c)(3) is amended to provide that an

        institution may establish a policy requiring students to provide
bank
        account information or open an account at a bank of the
student's
        choosing.
        

Interestingly, the same change had been pushed unsuccessfully during
negotiated rulemaking, so never underestimate the value of submitting
comments on proposed rules. Anne
 
Anne C. Gross
Vice President, Regulatory Affairs
NACUBO
202-861-2544 anne.gross_at_nacubo.org
202-449-1229 (fax)

________________________________

From: bursar-l-bounces_at_list.mail.virginia.edu
[mailto:bursar-l-bounces_at_list.mail.virginia.edu] On Behalf Of Taylor,
Trudy (tjt8n)
Sent: Friday, January 23, 2009 10:35 AM
To: bursar-l_at_virginia.edu
Subject: bursar-l: student direct deposits

Hello everyone.

Is there anyone that has mandatory direct deposit for student refunds?
Is it even a possibility?

Thanks

Trudy J. Taylor
Manager, Student Accounts Information
OFFICE OF STUDENT FINANCIAL SERVICES
FINANCIAL ADMINISTRATION
UNIVERSITY OF VIRGINIA
Carruthers Hall
1001 N. Emmet Street
Charlottesville, VA 22903
ph: 434.924.3597 / fax: 434.982.5222
tjt8n_at_virginia.edu

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