April 19, 2016

Financial aid refund process to change in early May, new option for FAFSA

Cleveland State University is making two changes to financial aid procedures, one of which will take place this fall.

In the first change, Cleveland State will give students the option of signing up for direct deposit of financial aid refunds beginning this fall.

The process will use CampusNet as a vehicle for signing up for the transferring of funds.

In the second change, which will not go into effect until 2017, students and parents — if the student is a dependent — will be able to use tax returns from two prior years to submit their Free Application for Federal Student Aid (FAFSA) beginning in the 2017-2018 school year, meaning the student and/or their parents can use a two-year-old tax return.

The refund procedure will eliminate a third-party provider now in use.

“The university is bringing the refund process back in house,” said Rachel Schmidt, director of Financial Aid at Cleveland State. “Meaning for students who have access to financial aid, they [students] receive the difference between their total aid and the total amount of charges that are appearing on their bill which is issued to them [directly from CSU].”

Cleveland State now uses a third-party provider — Higher One — to send out refunds to its students, but financial aid will no longer be sent to a student’s Higher One account from the university, unless the student uses that as a way of personal banking. The university will be issuing refunds based on its own programming with efforts from Information Services and Technology (IS&T).

“Students will be asked to log into CampusNet where they’ll see a brand new selection process,” Schmidt said. “They’re going to have to tell us their bank account [information] for where they would like their refund to be sent to and there will be a process [on CampusNet] that will explain to them how to do that.”

Veronica Herschbach, director of Treasury Services at Cleveland State, said students will be seeing the new selection on CampusNet in early May and encourages them to have everything “turned in and submitted” around then so the Treasury Services office can start sending test transactions out so the process will be working smoothly for refunds that will be sent in August for the fall semester.

According to both Herschbach and Schmidt, regulations changed in 2011 regarding student refunds, leaving the university to use Higher One as a vehicle for students to receive their reimbursements. All students who have some form of federal aid received a Higher One MasterCard when this change went into effect, and it was up to the students how they wanted their money to be transferred, or not, from that account into a different one.

“We didn’t have a mechanism in place to be responsive enough and compliant as quickly as we needed to be [after the change was made],” Herschbach said. “So we had no choice but to use the services of another company [Higher One]. Now, we’ve got this functionality built in with our own ERP [Enterprise resource planning] system that we’re able to do it ourselves, so why wouldn’t we?”

Herschbach said Cleveland State will be ending its contractual relationship with Higher One before the fall semester.

Both Herschbach and Schmidt said they have absolute confidence in the IS&T team to make sure everything is secured and encrypted with all of the student’s personal bank information.

Setting up direct deposit from CampusNet can be compared to getting a new job and adding your bank information for paychecks to be deposited into a chosen, personal account.

Three steps should make the refunds faster and more secure, Herschbach said.

Step one: Students type in their bank information — routing and account numbers. If students choose not to add their personal bank information to CampusNet, a paper check will be sent with the refund to be deposited by the student.

Step two: is validation. Herschbach compared this step to PayPal, an American company that operates to provide online payments and money transfers. Treasury Services will deposit a certain amount of cents into students’ bank accounts and the individual students will be asked, and expected, to answer on CampusNet how much was deposited to validate the person responding is the student.

Step three: The student is now officially signed up for direct deposit for the fall semester.

However, there will be a few restrictions.

According to Herschbach, the bank information submitted must be a United States account, validating the university won’t be sending money overseas. The other limitation is the money can’t be split and deposited into two separate accounts — it has to go to one place or be sent in one singular check.

The change to FAFSA procedures is the result of recent federal changes in the financial aid application process. These rules concern the most recent tax return to be used in filing for FAFSA. It’s called “Prior-Prior Year,” and the policy enables students and families to file FAFSA using two-year-old tax information. This will not take effect until October 2017.

Schmidt said this is a brand-new term, but the change has been in the works for many years and occurred through executive action in Washington. She also added that she thinks this is the most amazing legislation that’s come out of Washington to benefit students and their families.

“From financial aid perspectives, everyone is thrilled,” Schmidt said. “It’s nice to be able to complete a FAFSA that you’ve already done from two years ago, verses currently, where we make families file by a certain date — not only by law — but filing for FAFSA, too.”

This change is on a national level for both public and private schools. According to Schmidt, almost 70 percent of students who attend Cleveland State receive financial aid, and a majority of that could be in student loans.

“We are very excited to be able to do this for our students and I think it will speed things up tremendously,” Herschbach said. “We’ll do some strong promotions throughout the summer so students know to take action to do this [signing up for direct deposit].”


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