Student Loans

Procedure Statement 8: Payment Reversals

Policy

Payment reversal transactions should be used to update the Master File for returned checks and for payments processed in error.

1. Returned Checks

   The Student Loans Office:

   1. Receives all returned checks. Notifies borrower of returned check.
   2. Writes a check to "cover" the amount of bad checks to the University Cashier's Office.
   3. Codes payment reversal for each returned check according to the appropriate coding instructions.
   4. On-line payment reversals. Make sure hash total equals total of bad checks.

2. Payments processed in error
   1. When correcting payments from various warning messages which indicate a payment was accepted but needs to be reversed and reentered differently.
      1. DOLLARS OR COUNT DO NOT BALANCE - A payment amount may have been miskeyed but not rejected. Payment accepted would require reversal; correct payment would have to be reentered.

      2. NEGATIVE BALANCE, EXPECT REFUND - A payment may have been distributed incorrectly such that one loan fund has a credit balance. Payment would need to be reversed and reentered with loan funds specified.