The Department of Education has released guidance on closing out the 2024–25 Direct Loan award year, outlining key deadlines and reconciliation expectations for institutions.
Key Deadline
- The Direct Loan closeout deadline is July 31, 2026 (the last processing day of July following the award year).
Final Reconciliation is Critical
To be considered successfully closed out, a school must
- have an ending cash balance of $0 and total net unbooked disbursements of $0 both internally and as reflected on the School Account Statement (SAS) and
- complete the “School Balance Confirmation” form on the COD website
Staying on top of the process is essential for achieving successful reconciliation and closeout. Schools should complete the important steps below.
- Perform required monthly reconciliation:
- Internal reconciliation – Compare internal student accounts and business office or bursar records with financial aid office records. If your school uses a third-party servicer, you also should ensure that your internal and servicer records match.
- External reconciliation – Compare internal records to your Direct Loan SAS sent via your Student Aid Internet Gateway (SAIG) mailbox.
- Resolve any discrepancies and document outstanding timing issues.
- Verify that all drawdowns and refunds of cash are applied to the correct program and award year.
- Send all batches to the COD System and import all responses once they are accepted.
- Resolve all outstanding rejected records and ensure that all disbursements and adjustments are accurately reflected.
- Review all pending disbursements and determine whether these need to be reported as actuals (Disbursement Release Indicator (DRI) = True). If not, reduce these to $0.
- Return all refunds of cash electronically via G5.
- Request any remaining funds if supported by actual disbursement data.
After the Closeout Deadline
- The COD system will no longer accept new or increased awards or disbursements unless the school receives Extended Processing approval
- Decreases and non-financial changes can still be submitted without approval
Best Practices for Schools
- Reconcile early and regularly, not just at year-end
- Review both internal records and COD data to ensure alignment
- Document and resolve any discrepancies before the deadline
For full details, refer to the official announcement: (DL-26-01) Direct Loan Closeout Information for 2024–25 Award Year