Chapter 6: Payment Procedures

 

 

6.00 Payment Methods

HESC does not pay any grants or scholarships directly to students. All awards are paid through the school where the student is enrolled. Schools' Payment Options are as follows: 

a. Prepayment Option
HESC forwards to the school a percentage of the total value of all awards listed on the Payment Roster before the school certifies student eligibility. HESC will make prepayments no sooner than 30 days before the start of any term. 

HESC makes prepayments in a single lump-sum payment to the school for each Payment Roster. If the prepayment amount is insufficient to cover the value of all certified awards, HESC forwards a supplemental payment to the school after HESC processes the certified roster. The supplemental lump-sum represents the difference between the value of certified awards and the prepayment amount. If the lump-sum prepayment exceeds the value of all certified awards after HESC processes the Payment Roster, the school must refund the excess prepayment amount to HESC. 

Prepayment Deadlines. For schools selecting the prepayment option, HESC will make prepayments for summer rosters issued before September 30; fall rosters issued before November 30; winter rosters issued before February 28; and spring rosters issued before April 30 of the applicable academic year. Rosters issued after these dates will be nonprepay.

Certification RatePrepayment Percentage
93% + 90%
88% - less than 93% 85
83 - " " 88 80
78 - " " 83 75
73 - " " 78 70
68 - " " 73 65
63 - " " 68 60
58 - " " 63 55
53 - " " 58 50
48 - " " 53 45
43 - " " 48 40
38 - " " 43 35
33 - " " 38 30
28 - " " 33 25
23 - " " 28 20
18 - " " 23 15
13 - " " 18 10
0 - " " 13 0%


b. Nonprepayment Option

Under this option no payment is sent to the school until the school certifies the Payment Roster and HESC processes it. HESC pays the school for the total value of all certified student awards for a payment roster, as indicated on the Remittance Advice. 

6.01 Remittance Advice (HE8071)

The Remittance Advice (RA) is produced weekly for the current academic year and lists all certification activity on a particular payment roster. RAs reflect student award status based on current transaction processing. The Remittance Advice is the official accounting document which records the students eligibility and the approval for payment. As such school officials must review the RAs to ensure that HESC accurately processed the school's certification data. 

a. Groups
For each payment roster, the RA lists the following groups of students: (Students are listed alphabetically within groups.)

  • Students who have informed HESC that they are no longer in attendance. Students or schools submit this information on a college code change form. HESC has decertified these students from the payment roster. The students will appear on a payment roster at another school.
  • Students who have been decertified by their schools. Students appear in this group because the school determined that the student failed to meet one or more of the eligibility criteria for an award.
  • Students whose awards have changed since being placed on the payment roster indicated. This category results from changes* either the school or the student submits for students initially certified for an award. Awards, therefore, may increase or decrease.
  • Students whose awards are the same as on the payment roster.
  • Students are grouped by roster number or numbers if they appear on more than one roster.


*Types of Changes 

School-initiated. Changes made as a result of school certification activity or by the school submitting certification changes. 

Student-initiated. Changes to information in student application data resulting from the student submitting a Change Form.


HESC-initiated.  Changes based on HESC's transaction processing which changes the student's payment history. 

b. Nonappearance
If a student who has been certified or decertified by the school fails to appear on the appropriate Remittance Advice, one of the following situations has probably occurred:

  • The school did not certify or decertify the student according to required procedures.
  • HESC did not process some certified roster information.
  • A problem occurred with the student's payment history. HESC must review and correct the problem.


HESC will notify the school if it needs to take specific further action. If the school does not receive instruction from HESC, the school can recertify the student. 

HESC considers students to be in pending status until they appear on an RA. 

c. Production Schedule
HESC will produce an RA only if there are processed transactions for a particular payment roster. HESC produces RAs once a week during the current academic year. 

d. Fields
The following entries are provided for each student listed on an RA. An asterisk (*) before a student's name indicates that the student was on a previous RA pertaining to the same payment roster. 

FieldDescription
STUDENT NAME, SSN/CD & DOB Basic student identification information.
SCHOL ID Program code indicating through which grant or scholarship program the student is receiving assistance (TU-Undergraduate TAP, CV-Regents Award for Children of Deceased or Disabled Veterans, etc.).
FIRST YEAR The first year in which the student received a state award.
TERM TUITION EDUC EXPENSES The term tuition charge and/or the term charge for educational expenses, as certified on the roster or on a certification change form (the original roster tuition remains for a decertified student).
OTHER BENEFITS The term other benefits as certified on the roster or certification change form.
PREV TAP AWARD If there is an asterisk before the student's name, the previous award is the student's TAP award as indicated on a prior RA for the same payment roster. If there is no asterisk before the student's name, the previous award corresponds to the TAP award listed on the payment roster.
CURR TAP AWARD The current TAP award is the student's TAP award as listed on the payment roster unless it has been adjusted based on changes initiated by the school, the student, or HESC.
TOTAL CURR AWARD The total award the student will receive, which is derived by adding the current TAP award to the current scholarship or other award.
NET DIFF The result of subtracting the previous award from the current award.
REASON CODE A short explanation of the current award. Following is a list of the messages and the related certification code:

Reason

Code

Certified 1
Award recalculation 1
TAP - but no scholarship 2
Award recalculation - TAP only 2
Withdrew - tuition liability 3
Award recalculation - tuition liability 3
Not registered 4
Not full-time 5
Not matriculated 6
Does not meet Accelerated Study requirements 7
Not in good academic standing 8
Miscellaneous denial 9
College Code change *
*A college code change results in HESC automatically decertifying the student if the change is processed before certification.
GAS INF The total payment points the student has accumulated for good academic standing purposes through the current term. Pay points are listed under the term associated with the roster.
WAIVER A "W" is preprinted in this field if the student has used the one-time waiver of good academic standing ("W" will appear only for students who first received TAP or other state awards as of 1981-82 academic year or thereafter).
TOTAL COLLEGE CODE CHANGES The number of students for whom a college code change was submitted before certification.
TOTAL STUDENTS DECERTIFIED Total number of students who were decertified on the payment roster. The previous, current, and net difference of all decertified awards is also listed.
TOTAL ROSTER AWARD CHANGES The total number of students whose award changed since being placed on a payment roster. The previous, current, and net differences of all awards in this category are also listed.
TOTAL CERTIFIED NO AWARD CHANGE Total number of students whose previous awards remain unchanged after certification.
GRAND TOTAL ALL GROUPS The total number of students on the RA. Previous awards, current awards, and the net difference of the awards for all students on the RA are also indicated.
ROSTER TOTALS NET NUMBER OF STUDENTS The number of students on the RA excluding students with an asterisk preceding their names (who appeared on a previous RA for the same roster).
DOLLAR TOTAL OF CERTIFICATIONS Total value of certified awards. Includes current award for all students without an asterisk before their names and the net difference of students with an asterisk before their names.
TOTAL NET DIFFERENCE The sum of all the net difference entries on the RA. It can be either a positive or negative amount.
TOT PREV AWD The sum of all the previous award entries on the RA.
TOT CURR AWD The sum of all the current award entries on the RA.


6.02 Pending List

The Pending List is a list of all students, by institution, on a particular payment roster who are neither certified nor decertified, according to HESC records. Students remain in pending status because either the school has not yet submitted a certification transaction, or HESC has not yet processed the transaction, or the transaction resulted in an error during processing. HESC produces a Pending List when initiating a close-out for an academic year. The Pending List enables HESC to identify students who are listed as pending on Accounting Reports. 

6.03 Institution Accounting Report

a. Description
The Institution Accounting Report (IAR) is a cumulative accounting document that accompanies each RA and details all financial transactions affiliated with each special scholarship payment roster. 

b. Fields
HESC provides the following entries in the IAR headings: 

EntryDescription
DATE The date HESC produced the report.
INSTITUTION The college code number and name of the school.
PREPAYMENT PERCENTAGE The amount of funds advanced to the school, expressed as a percentage of the total value of the Payment Roster.
TERM The term for which HESC is producing the IAR, expressed in a three-digit numerical format, for example, 102=summer 02/03 or 202=fall 02/03, etc.
ROSTER The number of the payment roster for which HESC is producing this IAR.The entries in the activity section of the IAR are:
ACTIVITY DATE The processing date for each of the following activities:

Payment Roster - date produced by HESC

Remittance Advice - date produced by HESC

Returned Checks - date processed by HESC 

Supplemental Payment - date HESC produced the voucher requesting a supplemental payment from the State Comptroller 

Adjustments - date processed by HESC

ACT. TYPE The particular activity that generated the line of data:

PR - Payment Roster

R - Returned Checks and Refunds

RA - Remittance Advice

S - Supplemental Payment (or initial payment for nonprepay schools)

A - Adjustments for HESC relating to a transfer of liability

REFERENCE NUMBER This number is associated with each activity type in the following way:

PR - voucher number used to request a prepayment check from the State Comptroller (entry is blank for rosters that are not prepaid and for all rosters at nonprepay schools)

R - no reference number listed

RA - the sequential number of the Remittance Advice

S - voucher number used to request a supplemental payment check from the State Comptroller (or an initial payment check for nonprepay schools)

STUDENTS A number will be indicated only across from PR and RA entries.

PR - total students on the payment roster

RA - students decertified on the RA. If no decertification, field is blank. Number always has a negative sign associated with it, as it represents decertified students.

CERT STUDENTS Number in this field will only appear across from an RA entry and represents the number of students certified on that RA. If a Change Form decertifies a previously certified student, a negative entry can appear in this field.
FACE VALUE This number is associated with the following activity types:

PR - total value of a roster upon certification, taken from the last page of the roster.

RA - total net difference on the RA for a particular payment roster.

PAYMENT TRANSACTIONS The dollar figure is associated with the activity types listed in the following manner:

PR - the prepayment amount for schools selecting this payment option (entry is blank for rosters that are not prepaid and for all rosters at nonprepay schools)

R - the dollar value of refunds returned to and processed by HESC (entered as a negative)

RA - the dollar value of certifications on the RA (entered as a negative)

S - the dollar value of supplemental payments HESC sends to schools selecting a prepayment option, or the dollar value of the initial payment to nonprepay schools.

BALANCE The cash balance from each transaction. A positive balance indicates that the institution has funds in excess of the certified value of the roster. A negative balance indicates money is due the school.
TOTAL Totals are provided for each of the following fields: 
STUDENTS - total number of students on the payment roster, less any decertified students

CERTIFIED STUDENTS - total number of students certified to date; when this figure equals total under STUDENTS, the entire roster is certified

FACE VALUE - the new Value of the payment roster after award changes from decertification and reductions are taken into consideration

PAYMENT TRANSACTIONS - the balance of payments as of the last activity listed. A positive figure indicates funds unaccounted for (pending students, etc.).

BALANCE - the cash balance as of the last activity indicated. A positive balance indicates funds due HESC.

TOTAL STUDENTS PENDING - the number of students on the Payment Roster still in pending status. It represents the difference between STUDENTS and CERTIFIED STUDENTS

TOTAL NET PAYMENTS - the total of all payments (prepayments and supplemental payments) made to the school for the particular payment roster, less any checks returned to HESC. Adjustments are also reflected in this total.

TOTAL DOLLARS PENDING - the total value of awards for students in pending status

TOTAL LIABILITY TRANSFERS - the total amount of dollars affected by a transfer of liability from the school to students for a particular payment.

TOTAL L.T. AFFECTED STUDENTS - the total number of students on the Payment Roster for whom a transfer of liability has been processed.

REFUND DUE - the amount due HESC when the TOTAL NET PAYMENTS exceeds the FACE VALUE of the payment roster. An entry in this field represents a refund request by HESC to the school that must be paid within 45 days after HESC issues the IAR. HESC does not send a separate refund request.

REFUNDS IN DISPUTE - the dollar value of any individual student refunds due HESC that the school has disputed and HESC has agreed to review. HESC temporarily reduces the REFUND DUE field by this amount until the matter is resolved.

 

6.04 Accounting Reports

The following Accounting reports are used to reconcile student payments by term.  Supplemental payments and refunds are associated to term. All accounting reports are available for viewing and printing at HESC Web. 

a. Eligibility Roster Accounting Report
This report contains a listing of the number of students by roster and identifies changes in certified value.

Decertified students are identified as a negative number under the "students" field. 

Net face value is increased by positive amounts or decreased by negative amounts. 

Certified value reflects positive amounts for students that were certified eligible. Negative amounts represent either decertified students or students who were certified eligible but their awards were decreased. 

b. Summary Accounting Report
A standard accounting report which lists all payment activity for a term. 

Remittance advice entries will not be broken out by roster on this report. 

Balance represents the schools running total for the term. Positive value indicates money the school has to work with, negative values indicate a supplemental payment is needed. 

Certified value reflects positive amounts for student that were certified eligible and are subtracted from the balance. Negative amounts represent either decertified students or students who were certified eligible but their awards were decreased, this amount will be added to the balance. 

Refunds will be calculated and displayed only when they are due. 

c. Term Payment Accounting Report
This report is similar to the Summary Accounting Report but also lists all rosters included in a particular Remittance Advise. 

6.05 Electronic Payment Program

Electronic transfer of grants and scholarships payments is available through the office of the Statewide Financial System is: http://www.sfs.ny.gov/ . Funds are transferred directly to the institution's bank account. School officials receive notification via e-mail when payments are transferred. 

Each person, school, or college is considered a vendor with NYS and must obtain a vendor ID number to receive payment. Schools will maintain their vendor profile directly with the Office of the State Comptroller (OSC). Any changes to a school's address, bank, or other profile info must be submitted directly to OSCand HESC to ensure both agencies have updated information. Schools may use the above website for payment inquiry or call (855) 233-8363 for assistance. 

6.06 State Checks

a. Security
Each school participating in the state's grant and scholarship programs is responsible for exercising due care when handling state funds. Certification of student eligibility for awards and the actual disbursement of awards should be separate responsibilities. To facilitate this, HESC makes available Payment Rosters for the school's designated certifying officer and the Office of the State Comptroller forwards checks or EFT transmittal information to the school's bursar. Schools should verify amounts against HESC's transmittal documents. 

b. Lost Checks
If a state check (either a prepayment check or a supplemental payment check) is lost, the school should contact the Office of the State Comptroller. 

6.07 Refunds

a. Term Accounting
Schools must pay HESC refunds if the value of the school's total payments for a term are greater than the certified value for that term. Schools will be notified 45 days after the term end date of refunds due. 

Failure to remit refunds can result in HESC suspending future payments to the school. HESC will notify the school if this action is to be taken. School must not forward refunds to HESC prior to notification of refunds due. 

b. Processing
HESC deposits refund checks as they are received. The canceled check will serve as a receipt. Once HESC processes and credits the refund to the proper term, it will be reflected on subsequent Term Accounting Reports. The school should verify the amount of the refund being credited and notify HESC's Refund Unit at This email address is being protected from spambots. You need JavaScript enabled to view it. of any discrepancy. 

c. Recovering Overpayments
HESC determines liability for repayment according to the following guidelines:

  • When HESC pays an incorrect award because of an administrative error by the school, the student, or HESC, or because a student failed to fulfill eligibility requirements for an award, HESC, or the school - acting as an agent for the state - may recover any overpayment from the student.
  • When HESC pays an incorrect award because the school failed to fulfill certification requirements, HESC may recover any overpayment from the school.

       The method of recovering overpayments is as follows:

  • When a school fails to refund overpayments within the specified period, HESC may reduce by the amount HESC overpaid any future payments to the school for currently eligible students. HESC will also issue the school a directive to consider each eligible student's account to have been credited with the amount of the student's award for that term of attendance. Otherwise, HESC may withhold payments from the school until the refund is satisfied.
  • When HESC reduces a student's award to less than the amount on the roster, the reduction is shown on the RA. The school should exercise due diligence in contacting the student and arranging for the student to pay the refund to the school. If, after a diligent effort, the school is unsuccessful in collecting the refund from the student, the school may transfer liability to the student by means of a Transfer of Liability Affidavit (see item 6.08). 

6.08 Transfer of Liability

a. Description
When a student receives an award overpayment, HESC first seeks recovery from the school. If, however, the school properly certified the student and disbursed the award in accordance with HESC policies and has made a diligent effort to recover the overpayment, the school may transfer liability to the student. The school cannot transfer liability if it decertified the student or took action that caused the student's award to be reduced but then disbursed the award in error. 

b. Procedure
To transfer liability for a refund to the student, the school must request and submit to HESC a Transfer of Liability Affidavit. The affidavit provides the following:

  • Section I - indicates the school's actions to recover the overpayment
  • Section II - provides detailed identification information on the student's award and the amount to be transferred
  • Affirmation - must be signed by the school's certifying officer 

c. Determinations
HESC evaluates and approves or denies each student's account submitted for a Transfer of Liability based on the due diligence criteria outlined on the affidavit. HESC notifies the school whether the request for transfer of liability is approved or denied. The request must be submitted within one year from the date of the reduction. 

d. Amount
The amount of liability that may be transferred is limited to:

  • the difference between the award listed on the payment roster and the award listed on the RA
  • if the student appears on a later RA with a reduced award, the difference between this award and the award listed on the previous RA.

6.09 Unclaimed Awards

If the school is unable to disburse an award, the award must be returned to HESC under the following circumstances:

  • the student is eligible for the award; and
  • the student's outstanding liability to the school for that term is less than the amount of the award; and
  • the student cannot be located; and
  • the school has tried and failed to locate the student over a reasonable length of time (the end of the term for which the award was made, or 90 days from receipt of the award funds, whichever is later).
  • If the student has an outstanding liability to the school that is less than the amount of the award, the surplus, which normally would be disbursed to the student, can be returned to HESC under the conditions listed above.


The school must provide the following information for all unclaimed awards being returned to HESC:

  • student's name
  • student's Social Security number
  • student's last known address and telephone number
  • the school code, term, and roster number to which the award pertains
  • an explanation of the amount refunded if it is less than the total award

6.10 Audits

The New York State Comptroller's Office periodically conducts audits. Audits will evaluate the school's procedures and record keeping with respect to the certification of student eligibility for State awards. They are intended to ensure compliance with Articles 13 and 14 of the New York State Education Law, relevant portions of the Regulations of the New York State Commissioner of Education, HESC regulations and policies and procedures outlined in this manual. The Comptroller's Office issues a draft audit report, based on its review of school records and discussions with school officials. The school then may comment on this report before the Comptroller's Office issues a final report. HESC will take appropriate action based on findings and recommendations contained in the final audit report.