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Cash management regulations establish rules and procedures that a school must follow in requesting, maintaining, disbursing, and otherwise managing Title IV funds. On October 30, 2015, the Department of Education finalized new cash management rules, followed by technical corrections in April 2016. Many of these regulations apply to all institutions, but some only affect schools that have arrangements with banks and third-party servicers processing Title IV credit balance refunds.

There are two types of arrangements in the final cash management rules: Tier One (T1), and Tier Two (T2). The regulations require colleges and universities to disclose the contract establishing a T1 or T2 arrangement on their website and provide the Department of Education with the contract's URL. A brief description of T1 and T2 arrangements is below.

Tier One (T1) Arrangements. A higher education institution has a Tier One (T1) relationship if it arranges for a third-party servicer to process direct payments of Title IV funds on its behalf. In addition, to qualify as a T1 arrangement, the third-party servicer must either offer at least one financial account under the arrangement or market an account to students, either directly or through another entity.

Tier Two (T2) Arrangements. A school has a Tier Two (T2) relationship if it allows banks to offer and market accounts directly to students. Any account that can be linked to a student ID will be considered at a minimum to be an account under a T2 arrangement. However, if a school had at least one student with a Title IV credit balance refund in each of the three most recently completed award years, only certain provisions of the T2 regulations apply. Because of this lower threshold, NACUBO informally refers to these arrangements as “Tier Two, Lower Threshold” (T2-L).

NACUBO has worked extensively on Department of Education regulations related to cash management. See below for more content.

Cash Management Overview

Disclosures & Reporting

Miscellaneous Updates

NACUBO Tools

ED Resources

Final Cash Management Rules

Other Rules-Specific Resources

Other External Resources

Related Pages

To visit other pages with SFS content related to Department of Education regulations, click below:

SFS Regulations   ED Regulations   ED Archives

Contact

Bryan Dickson

Assistant Director, Advocacy and Student Financial Services

202.861.2505


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