The U.S. Department of Education has issued a reminder about important reporting and cash management requirements for all institutions participating in Title IV federal student aid programs. These rules are essential for maintaining compliance and strong financial controls.
Posted Date: January 08, 2026
Author: Federal Student Aid
Electronic Announcement ID: GENERAL-26-02
Subject: Title IV Aid Disbursement Reporting, Excess Cash, and Reconciliation Requirements
In this announcement, we remind schools of the general disbursement reporting, excess cash, and reconciliation requirements for all Title IV programs. Both the financial aid office and business office should review the information provided below as these requirements apply to disbursement and financial data.
Disbursement Reporting Requirements
Disbursement and disbursement adjustment reporting requirements for Title IV aid is announced in an annual Federal Register notice. The most recent Federal Register notice, published on Dec. 10, 2025, specifies that a school must submit disbursement records no later than 15 days after making the disbursement or becoming aware of the need to adjust a student’s previously reported disbursement.
Excess Cash Requirements
The U.S. Department of Education (ED) considers excess cash to be any amount of Title IV funds (other than Federal Perkins Loan Program funds) that a school does not disburse to students or parents by the end of the third business day after the date the school (1) received the funds from ED, or (2) deposited or transferred to its federal account previously disbursed Title IV funds received from ED. Cash may be held for up to seven calendar days in limited circumstances. A school must meet the excess cash tolerance (not to exceed one percent of the funds drawn down by the school in the prior award year) and must be able to disburse the aid to students within the seven-day period. Cash balances should never remain beyond the seven days.
See 34 CFR 668.162 for the federal regulations that govern requesting funds for the Title IV programs and 34 CFR 668.166 for the excess cash regulations.
Reconciliation
Reconciliation is the process by which a school reviews and compares Title IV aid (grants, loans, and campus-based aid) recorded on ED systems (COD System and G5) with the information in the school’s internal records. Schools should reconcile both internally (between business office and financial aid office data) and externally (between school data and the COD System/G5). Schools must identify and resolve disbursement and cash discrepancies in a timely manner to ensure the school meets all regulatory requirements. Schools must document their reconciliation efforts and retain this documentation for auditing purposes.
Reconciliation can assist schools in determining whether the disbursement reporting requirements and excess cash deadlines noted above are being met and whether the school needs to submit additional data to ensure all school data is reflected correctly in ED systems. Schools must reconcile at least monthly to meet regulatory requirements for the William D. Ford Federal Direct Loan (Direct Loan) Program and the Campus-Based programs (including Federal Perkins Loan, Federal Work-Study, and Federal Supplemental Educational Opportunity Grant). For all other Title IV programs (including Federal Pell Grant and Teacher Education Assistance for College and Higher Education (TEACH) Grant), schools are encouraged to reconcile at least monthly or as frequently as necessary to identify issues and maintain compliance with the cash management and disbursement reporting requirements outlined above.
Additional information on reconciliation can be found in the following publications on the Knowledge Center::
- Electronic Announcements (published annually by program)
- Federal Student Aid Handbook
- Federal Student Aid Training Conference Presentations
Final Reconciliation
For schools meeting all disbursement/adjustment reporting, excess cash, and reconciliation requirements, a final reconciliation should begin no later than the last award or payment period end date at the school for a given program and year. A school should be able to reconcile to a zero cash balance soon after its final disbursements and should not carry a cash balance (positive or negative) for an extended period. Note: Schools must reconcile to both zero ending cash balance and zero total net unbooked for Direct Loan and TEACH Grant; and to zero cash > net accepted and posted disbursements for Pell Grant.
Schools can officially confirm closeout via the “School Balance Confirmation” page on the COD website after completing final reconciliation of the Direct Loan, Pell Grant, and TEACH Grant programs. Balance confirmation allows schools to receive a Program Year Closeout letter to document completion of final reconciliation. Balance confirmation also provides tighter controls over available funding and data submission so that the school can then focus on processing and reconciliation in more current award years. Note: The balance confirmation process is available for all award years for Direct Loan and Pell Grant; it is available for TEACH Grant for the 2016–17 award year and forward.
Contact Information
For disbursement reporting, excess cash, or reconciliation and processing questions, contact the FSA Partner and School Relations Center at 1-800-848-0978. The contact center is open Monday through Friday, 10 a.m. to 6 p.m. Eastern time. You may also email CODSupport@ed.gov.
SOURCE: (GENERAL-26-02) Title IV Aid Disbursement Reporting, Excess Cash, and Reconciliation Requirements