University Foundation Short-Term Loan Program; Revised June 18, 2009
Executive Memorandum 95-021
October 09, 1995
From: Manuel A. Esteban, President
Subject: University Foundation Short-Term Loan Program; Revised June 18, 2009
UNIVERSITY FOUNDATION SHORT-TERM LOAN PROGRAM
Upon recommendation of the Vice President for Business and Finance and approval of the University Cabinet, the following revision to EM 95-021, University Foundation Short-Term Loan Program, is approved and is effective immediately.
The Foundation Short-Term Loan Program provides low-interest, short-term financial assistance to regularly enrolled California State University, Chico students for expenses related to their university attendance. The program is funded by private, University, and auxiliary donations. As a Foundation asset, the funds are held in trust and the program is administered by the University's Financial Aid and Scholarship Office, Student Financial Services, and Accounting Operations.
Program administration is governed by the current version of the Short-Term Loan Program Policies and Procedures, available from the Financial Aid and Scholarship Office or Student Financial Services. Amendment of the Policies and Procedures document requires the consensus of the University Financial Aid Advisory Committee (FAAC). FAAC will consult Foundation, Associated Students Accounting Services, or University Accounting Services personnel as appropriate prior to approving amendments and shall ensure proper distribution of any changes to the document.
SHORT-TERM LOAN PROGRAM POLICIES AND PROCEDURES
PURSUANT TO EXECUTIVE MEMORANDUM 95-021
EFFECTIVE FALL SEMESTER, 2009
The Foundation Short-Term Loan Program provides low cost, short term financial assistance to California State University, Chico students for expenses related to their University attendance.
A Foundation asset, the loan funds are held in trust and the program is administered by the University's Financial Aid and Scholarship Office (FASO), Student Financial Services (SFIN), and Accounting Operations (AO).
FUND TYPES, DONATIONS, AND NEW FUNDS
The program is funded by private, University, and auxiliary donations made to separate loan funds (Foundation projects) designated, for student-eligibility purposes, as "general" or "restricted." General funds can be used to make a loan to any eligible student and are, therefore, best utilized and easiest to administer. Restricted funds can be loaned only to those students meeting both the general eligibility requirements and specific additional requirements established by the donor. Restrictions must be in compliance with federal, state and University non-discrimination laws and policy.
Solicitations and acceptance of contributions shall be in accordance with EM 83-001 or its successor. Donors may direct contributions of any size to any existing fund, undesignated contributions to the program will be credited to the University loan fund (the largest of the general funds). Associated Students Accounting Services will receipt contributions to Foundation loan fund projects, prepare checks, and provide those checks to University Cashiering for final receipting to the Trust accounts.
Donors of $5,000 or more may request establishment of a new fund. University Advancement (UA) representatives should encourage the donor to designate such new funds for general use. If the donor wishes to place restrictions on the new fund, UA will consult with the FASO and SFIN directors regarding the feasibility of the restrictions prior to final acceptance of the contribution.
ELIGIBILITY FOR LOANS
To be eligible to receive a loan, a student:
- Must be regularly enrolled in the University in the current fall or spring term. Students enrolled through Continuing Education or Resident Extension only and not regularly admitted to the University are ineligible
- Must not have a faculty or staff appointment at California State University, Chico (exception for faculty applying for a short-term loan under the New Faculty Short-Term Loan program)
- Must not have an outstanding short term loan
- Must not have already received a loan from this program in the current academic year
- Must not have unresolved student record holds which affect eligibility for this service.
FASO shall be responsible for producing and providing application forms; receiving completed applications; confirming applicant eligibility; denying loans to ineligible applicants; and awarding loans (including establishing the amount to be lent, the fund from which the loan will be issued, and the due date) in accordance with this document.
The maximum loan amount and the maximum outstanding loan amount shall be $500, with the exception of loans granted from the International Students fund, or special circumstance loans approved by FASO administrator.
SFIN shall be responsible for receiving approved application data, producing promissory notes and checks, and disbursing loans.
LOAN TERMS AND COSTS
Loan terms shall be fully disclosed to the borrower through a promissory note/disclosure statement which the borrower must sign at the time of disbursement.
A loan service charge of $5.00 will be deducted from the approved loan amount and retained in the fund from which the loan is issued. The borrower shall receive the net amount (amount of loan less the service charge), but be obligated for repayment of the gross loan amount.
Repayment of loans shall be due 90 days from the issue date or upon any further disbursement (financial aid, scholarship, or other funds), whichever occurs earlier.
Loans not repaid by the scheduled due date shall be considered in default and a $25 late fee (retained by SFIN) will be assessed to cover the costs of collection. Defaulted borrowers shall pay all costs of collection including, but not limited to, skip-tracing fees, collection costs, court costs, and attorney fees.
SFIN shall be responsible for all collection activities and shall utilize all generally accepted and cost-effective legal means to secure repayment. Loans determined by SFIN to be uncollectible after an annual receivable analysis, will be written off (removed from the active receivable total) by June 30 of each year. Passive collection (student record holds and submission for offset of state moneys due the debtor) will continue until such loans are paid in full.
SFIN shall be responsible for maintenance of the loan database and the production of reports necessary for initiating and documenting all accounting entries.. SFIN shall also safeguard loan promissory notes and provide for records retention in accordance with state regulation. AO shall maintain the General Ledger (GL), reconcile accounts receivable to the GL, reconcile the GL to receivable confirmation requests from independent auditors, prepare bad debt analyses, and generate annual financial statements for each fund.