Student Aid:  Loan Fund Accounting

UC Accounting Manual
X.  Loan Fund Accounting
S-772-12 (TL 56, 8/17/90)
*****************************************************************

                    STUDENT AID:  LOAN FUND ACCOUNTING



                                 Contents

                                                Page

I.   Introduction                                2

II.  Procedures                                  2

III. Short-Term In-School Loans                  3

IV.  Long-Term Loans                             4

V.   The FWSFS Subsystem                         5

     A. General Overview                         5
     B. Definitions                              6
     C. Interface with the General Ledger System 6
     D. Adjustments to the General Ledger        8
     E. General Ledger Reconciliations          13
     F. Functional Responsibilities Plan        13
     G. University Student Aid Program          13

VI.  Responsibilities                           14

VII. References                                 14

Appendix   I.  Recording Receipt of Loan Funds and
        Federal Capital Contributions           15

Appendix   II. Journal Entries to Record Loans
                Granted                         17

Appendix   III.   Journal Entries to Record
                Transfers of Loans to FWSFS     18

Appendix   IV. Recording Collections,
                Cancellations, Bankruptcies,
                Write-Offs, and Refunds         19

Appendix   V.  Closing Entries                  28

Appendix   VI. Functional Responsibilities Plan 31

Appendix   VII.   Loan Funds Chart of Accounts  34

Appendix   VIII. Loan Funds by School/Program
                Campus and Fund Numbers         36





                    STUDENT AID:  LOAN FUND ACCOUNTING

                            "The man who trusts men will make
                            fewer mistakes than he who distrusts
                            them."

                                                    --Cavour



I.   INTRODUCTION

     Campuses receive funds to be used for student loans from
     private sources, The Regents, and the Federal Government. 
     This chapter presents procedures for recording and
     accounting for these funds and for the collection of
     student loans.

II.  PROCEDURES

     A. RECEIPT OF FUNDS

        Funds from private sources are ordinarily received
        directly by the campus cashier's office.  Regents funds
        are transferred to the campuses by the Office of the
        President (OP) via intercampus financial journals. 
        Federal funds are drawn by wire transfer from the
        Department of Education (DE) or Health and Human
        Services (HHS) and placed in local campus depositories.

     B. FIRST WACHOVIA STUDENT FINANCIAL SERVICES

        Since 1977, the University has contracted with financial
        agents to provide accounting and collection services
        pertaining to student loans.  Effective July 1, 1987,
        First Wachovia Student Financial Services, Incorporated
        (FWSFS), a subsidiary of the First Wachovia Corporation,
        has been awarded a three-year contract:  (1) to provide
        recordkeeping, billing, collection, and reporting
        services for University Loan Funds (ULF), various
        Federal Loan Programs (FLP), and Educational Fee
        Deferment Loans (EFDL), and (2) to provide the
        University with an adequately tested student loan
        collection system--a system which FWSFS has developed
        for colleges and universities.

        Accounting procedures presented in this chapter pertain
        to FWSFS procedures and the FWSFS accounting subsystem. 
        Refer to the FWSFS Student Loan Management Operations
        Manual for information regarding accounting reports of
        the FWSFS subsystem.  Refer to the FWSFS Student Loan
        Management Datalink Manual for information regarding the
        on-line procedures of the subsystem.

        Problems associated with new or additional loans,
        cancellations or adjustments, etc., which may require
        changes or modification of the computer program(s),
        should be resolved without undue loss of time.  

        Questions concerning such problems should be referred to
        FWSFS (see Customer Orientation section of the FWSFS
        Student Loan Management Operations Manual for mailing
        addresses and phone numbers).

     C. JOURNAL ENTRIES

        Examples of journal entries to record the loan funds
        given by individuals, private organizations, and the
        University, including capital contributions made by the
        Federal Government are presented in Appendix I. 
        Appendix II illustrates journal entries to record loans
        granted.  Journal entries to record transfers of loans
        to FWSFS are presented in Appendix III.  Appendix IV
        illustrates journal entries to record collections,
        cancellations, bankruptcies, write-offs, and refunds. 
        Closing entries are presented in Appendix V.  The
        account and fund number groupings presented in this
        chapter should be used consistently University-wide. 
        Thus, any campus currently using such an account or fund
        number for some other purpose should modify its systems
        accordingly, as soon as possible.  The uniform use of
        account and fund numbers facilitates the compilation of
        data electronically at OP and eliminates the need for
        numerous individual reports from each campus.
     
III. SHORT-TERM IN-SCHOOL LOANS

     Recordkeeping, collection, and follow-up functions for
     short-term ULF loans (loans repayable within the academic
     year) will continue to remain the responsibility of the
     campuses.  However, these loans may be transferred to FWSFS
     at the campus' option.

     Effective controls and reconciliation procedures for in-
     school loans should be established by the campus accounting
     offices to ensure:

     1) that the notes receivable held by the loan collection
        offices and the control accounts in the general ledger
        are in agreement and reconciled on a monthly basis,

     2) that verification procedures have been established
        whereby confirmation of outstanding balances can be
        obtained from the borrowers, 

     3) that financial aid officers are adequately informed of
        the current available loan fund balances and changes in
        loan fund terms, 

     4) that the campus in-school loan repayment clearing
        account balances are identified and loan repayments are
        applied promptly, and 

     5) that the supporting loan documentation and students'
        promissory notes are adequately safeguarded in the loan
        collection office, i.e., only authorized personnel are
        permitted access to such documents.

     Examples of journal entries to record loans granted to
     students while in school are illustrated in Appendix II.

IV.  LONG-TERM LOANS

     A. CATEGORIES OF FEDERAL LOAN PROGRAM NOTES FOR DIRECT
        LOANS

        Federal Loan Program notes for direct loans are
        classified into three main categories, as follows:

           Category   I  -- National Direct Student Loans (NDSL)
           Category  II  -- Perkins Loans
           Category III  -- Perkins/NDSL-2 Loans

        Careful consideration should be given to the wording
        used in these notes, which varies according to category. 
        (When printing notes for Category III, it is recommended
        that the exact wording for Perkins/NDSL-2 Loans be used
        as outlined in Federal Register dated December 1, 1987,
        Volume 52, Number 230.)

        Provisions of the three categories of loans are as
        follows:

        1. National Direct Student Loans

           A borrower who has an existing NDSL program note (at
           a particular campus) against which loan advances can
           still be posted (at that campus) should continue to
           receive advances based on the provisions of that
           note, i.e., at 5% interest, with a 6-month initial
           grace period, and a $6 per quarter late penalty.

        2. Perkins Loans

           A borrower who did not have a balance owing on an
           NDSL or Perkins Loan at any location on July 1, 1987
           should receive a Perkins Loan program note at 5%
           interest, with a 9-month initial grace period,
           specified deferment and cancellation provisions, and
           a maximum late penalty of 20% of installment payment.

        3. Perkins/NDSL-2 Loans

           A borrower who had a balance owing on an existing
           NDSL note at any location on July 1, 1987 but does
           not currently have a note at a particular campus
           against which advances can be posted should receive a
           Perkins/NDSL-2 Loan note at that campus, at 5%
           interest, with a 6-month initial grace period, and a
           maximum late penalty of 20% of installment payment.

     B. TRANSFER TO THE FWSFS SUBSYSTEM

        When a student with an outstanding loan leaves school,
        the campus must transfer all applicable loan information
        to FWSFS.  Information may be transferred to the FWSFS
        subsystem via either (1) a transfer document or (2) a
        computer tape.  (See section 204 of the FWSFS Student
        Loan Management Operations Manual for detailed
        procedures.)

        The responsibility for recordkeeping and posting of
        financial transactions to out-of-school accounts passes
        to FWSFS when the transfer documents or tapes are
        processed through the FWSFS Data Processing Center and
        the related data appears on FWSFS Accounting Reports. 

        Loan balances and other pertinent loan information must
        be verified by the campus against the general ledger
        prior to and after transfer to FWSFS.

        After a loan transfer has been recorded on the
        subsystem, a financial journal must be prepared
        transferring the balance from the Campus Notes
        Receivable Control account to the appropriate FWSFS
        Notes Receivable Control account.  Examples of journal
        entries to record transfers of loans to FWSFS are
        presented in Appendix III.

        Category III borrowers include those borrowers who
        transfer to a particular campus from another University
        of California campus or from another institution and
        also those borrowers who remain at or return to a
        particular campus but whose NDSL loans are not suitable
        for augmentation for some reason.  (However, if it is
        possible to combine the advances associated with a new
        award with a previous balance and collect the entire
        amount as one loan, the loan may be classified as a
        Category I loan.)

        For additional information regarding promissory notes,
        contact the Office of Financial Aid and Loan Collection
        in OP.

V.   THE FWSFS SUBSYSTEM

     A. GENERAL OVERVIEW

        First Wachovia Student Financial Services, Incorporated,
        provides complete billing and reporting services for all
        loans entered in its system.  In addition to cyclical
        billing and posting of repayments to individual borrower
        accounts, the FWSFS subsystem:

        1) provides campuses with the ability to update both
           financial and non-financial data.  Non-financial
           data, for example, includes names and addresses,
           status codes, separation dates, loan payment dates,
           social security information, and data on loans
           assigned to collection agencies, etc.  Financial
           data, for example, includes non-cash payments,
           payment reversals, write-offs, and increases or
           decreases in loan balances.

        2) provides student borrowers with bills for all loan
           obligations transferred to the FWSFS subsystem.

        3) provides comprehensive collection data for follow-up
           and analysis of past due portfolios.

        4) provides reconciliations of bank statements, wire
           transfers, and transaction journals.

        5) provides various reports (for detailed information,
           see the FWSFS Student Loan Management Operations
           Manual).

        6) provides immediate direct on-line access to student
           borrower accounts.

     B. DEFINITIONS

        Cash Payment:  Any student loan payment received by
        FWSFS directly from the student borrower, from a campus,
        from a collection agency (see section D.4. below), or
        from a bankruptcy trustee and must be recorded on FWSFS
        Accounting Reports.

        Non-Cash Payment:  Any student loan payment received and
        deposited to the campus local depository bank which the
        campus has posted directly, or for which a notification
        of receipt has been sent to FWSFS for processing.  A
        payment on an outstanding loan made by an employee
        through payroll deduction would also constitute a non-
        cash payment. 
           
        Payment Reversal--Cash or Non-Cash:  The removal of an
        uncollectible check or misapplied payment from FWSFS
        current month Accounting Reports.  FWSFS offsets
        reversals against cash or non-cash payments, as
        applicable.  (See section 1000 of the FWSFS Student Loan
        Management Operations Manual.)

     C. INTERFACE WITH THE GENERAL LEDGER SYSTEM

        1. Daily Transactions

           The FWSFS subsystem does not generate automated
           campus journal entries for loan collections,
           cancellations, and adjustments.  Journal entries are
           made at the campus or at OP.

           Billings on loans in a collectible status are
           generated by the FWSFS program at predesignated
           intervals.  The payments are received by FWSFS,
           deposited in a bank account, and wire-transferred to
           the University.

           At times, the borrower may forward payment to the
           campus in cash or by check payable to The Regents. 
           In such cases, (1) the cash or check can be deposited
           in the campus local depository bank and posted
           directly through the FWSFS on-line system as a non-
           cash payment, (2) a University check and a completed
           payment transmittal form can be forwarded to FWSFS,
           or (3) the student check itself can be forwarded to
           FWSFS with the payment stub.


           Note:  When a University or student borrower's check
                  is sent to FWSFS, it should be addressed as
                  follows:

           University check with    Student borrower's check
           payment transmittal      with payment stub

           First Wachovia Student   First Wachovia Student 
           Financial Services, Inc.     Financial Services, Inc.
           P. O. Box 2902           P. O. Box 70095
           Winston-Salem,           Winston-Salem, 
           North Carolina  27102    North Carolina  28272-0095

           If a borrower remits funds to the campus and the
           funds are retained locally at the campus, the journal
           entry illustrated in transaction 6), Appendix IV,
           should be made.

        2. End of the Month

           At the close of each month's activity, i.e., on the
           last working day of the month, FWSFS will forward
           Accounting Reports to the campuses.  For details and
           examples, see the FWSFS Student Loan Management
           Operations Manual.  In addition, FWSFS will forward
           to the Office of Financial Aid and Loan Collection in
           OP, a monthly bank statement showing the wire
           transfers, along with copies of the University of
           California System Cash and Tax Offset Reconcilements
           by school/program number. (A list of school/program
           numbers and related fund numbers are presented in
           Appendix VIII.)  The list of school numbers will
           enable OP to reconcile the two documents with the
           General Ledger and make the appropriate entries in
           the campus financial control accounts.

           After reconciling the cash received by the Treasurer
           during the month with the Cash and Tax Offset
           Reconcilements, as prepared by FWSFS, OP will
           transfer to the campuses the total receipts as
           illustrated in transaction 2), Appendix IV.  These
           total receipts must equal the distribution amounts as
           recorded in the campus general ledger control
           accounts, as discussed below.

           A microfiche copy of the Transactions and Adjustments
           Journals and the New Loans and Adjustment Report
           which reflect the new loans, additional loans,
           cancellations, payments, reversals, and miscellaneous
           adjustments, will be sent to the campus by FWSFS
           along with the Cash and Tax Offset Reconcilements,
           and the 

           Accounting Reports for each loan fund.  This
           information will enable the campus to distribute the
           funds from the campus financial control account as
           illustrated in transactions 3), 4), and 5), Appendix
           IV.  (Regarding these entries, it is suggested that a
           reconciliation summary be prepared and an endorsement
           be made on each financial journal stating that the
           journal entries have been reconciled to those shown
           on the FWSFS Accounting Reports.)

           After the amount of cash received and deposited by
           the campus has been forwarded to FWSFS with a
           completed non-cash payment transmittal form, the
           campus should keep the cash receipt posted in the
           loan repayment control account until the FWSFS
           Accounting Reports reflect the payment received. 
           When the entry appears on the FWSFS Accounting
           Reports, the campus repayment control should be
           cleared as shown in transaction 7), Appendix IV.

        3. Fiscal Year-End

           Any undistributed balance shown in the campus loan
           repayment or financial control account at June 30
           should be temporarily transferred to the appropriate
           FWSFS Notes Receivable account by a 14 reversing
           journal.

     D. ADJUSTMENTS TO THE GENERAL LEDGER

        1. Elimination of Small Credit Balances

           Whenever a payment is applied to a loan and a credit
           balance of $.99 or less is created, FWSFS will list
           the amount on its Accounting Reports as a credit
           entry to the Loan Principal and/or Interest Written
           Off--Low Balance account.  The credit balance written
           off will appear as a credit entry under the heading
           FWSFS Other Costs and Losses--Principal, Interest and
           Fees Written Off.

        2. Outstanding Loans--Small Balance

           When a payment is received on a student loan which
           leaves a remaining balance of $.99 or less,
           University policy permits automatic write-off of the
           balance.  Such a write-off is recorded by FWSFS in
           the Loan Principal and/or Interest Written Off--Low
           Balance account.  The total small balance written-off
           will be reflected under the heading FWSFS Other Costs
           and Losses-- Principal, Interest and Fees Written
           Off.  The accounting entries for small balance write-
           offs processed through FWSFS are the same as for
           campus generated write-offs.  It is recommended that
           campuses with on-line capabilities for loans which
           are held for collection by FWSFS write-off balances
           of $.99 or less via "datalink".  For detailed
           procedures on how to write-off loans directly, see
           the FWSFS Student Loan Management Datalink Manual. 
           For such write-offs, the entries will be the reverse
           of those shown in Appendix IV, transaction 9) (i) a),
           b), and c).

           For campus generated write-offs of Federal loans, the
           general ledger entries will be as follows:

           Dr.  X-102103-039XX-0   Other Costs and Losses
                                   (principal and interest)

           Cr.  X-102188-039XX-0   Loan Principal Adjustments
           Cr.  X-102100-039XX-0   Interest Income

           The Loan Principal Adjustments balance (X-102188-
           039XX-0) will be transferred at fiscal year-end to
           the Notes Receivable account (X-102021-039XX-0) on a
           14 reversing journal.  At fiscal closing, the Other
           Costs and Losses balance (X-102103-039XX-0) will be
           offset against Federal and University Capital
           contributions as illustrated in the closing schedule. 
           During the fiscal year, it will be necessary to
           offset manually the Loan Principal Adjustments
           balance against the prior year-end Notes Receivable
           ledger balance to obtain the current Notes Receivable
           balance.

           a.  Write-off of a FLP loan balance when a compromise
               settlement has been approved by a court or campus

               When a compromise settlement has been approved by
               a court or campus, the campus should write the
               loan off directly via the FWSFS on-line terminal. 
               The general ledger entries which should be made
               will be similar to those listed above.  The
               journal entries to be made at fiscal closing will
               also be similar to those listed above.  During
               the fiscal year, it will be necessary to offset
               manually the Loan Principal Adjustments balance
               against the prior year-end Notes Receivable
               ledger balance to obtain the current Notes
               Receivable balance.

           b.  Write-off of Regents Loans (including Educational
               Fee Deferment Loans)

               When a campus has determined that a loan is
               uncollectible and write-off approval has been
               given by the Chancellor, the campus should write
               the loan off directly via the FWSFS on-line
               terminal.  See Appendix IV, transaction 19) for
               journal entry.

        3. Intercampus and Inter-School Transfers

           Occasionally, a student borrower may have more than
           one loan recorded at more than one campus.  If a
           misapplication of payment is made by FWSFS and it is
           found that an inter-school transfer of payment is
           necessary, FWSFS will:

           1)  include the cash on the correct campus/program
               Cash and Tax Offset Reconcilements Report and
               process the item, and

           2)  deduct the misapplied amount from the Cash and
               Tax Offset Reconcilements Report of the incorrect
               campus/program.

           Therefore, no entries to the general ledger are
           required to offset the transfer of cash between
           campuses (through the financial controls).  Sample
           journal entries to record the transfer are presented
           under transactions 3) to 5), Appendix IV.

        4. Collection Agency Procedures

           Collection agencies are selected and retained by
           campuses to perform collection functions pertaining
           to the FWSFS billing system.  An agency may be
           instructed to transfer all payments and associated
           documents to the campus, allowing the option of
           processing via on-line terminal or as a non-cash
           payment, or it may transfer all payments and
           documents as follows:

           To: First Wachovia Student Financial Services (see
               section V. subsection C. for complete mailing
               address or refer to the FWSFS Student Loan
               Management Operations Manual).

                  Items: (1)   Check for gross amount
                            (2)    Detailed listing (two copies)

           To: The campus

                  Items: (1)   Copy of checks
                            (2)    Detailed listing (copy number
                                   two)
                            (3)    Invoice for commissions, by
                                   funds

           The campus should verify that the invoice for
           commissions has been calculated correctly.  The
           entries to be made to record collection agency
           commissions appear in transaction 11), Appendix IV.

           In cases in which the collection agency has deducted
           its commission from the loan payment, the entries to
           be made will be in accordance to those appearing in
           transaction 10), Appendix IV.

           On occasion, a collection agency may report a payment
           and the return of a bad check to the borrower on the
           same invoice.  In such cases, FWSFS will record both
           the payment and the corresponding reversal. 
           Similarly, if the payment is reported in one month
           and the returned check in a subsequent month, both
           transactions will be recorded.

        5. Assignment of Defaulted Federal Loans to Federal
           Government

           Assignments of defaulted FLP loans should be
           processed after:  (1) the defaulted loan has been
           accepted by the Federal Government, (2) the loan
           assignment has been coded by the campus on the FWSFS
           subsystem, and (3) a deletion from the outstanding
           notes receivable appears on the FWSFS Accounting
           Reports and the journal entries outlined in
           transaction 24), Appendix IV, have been prepared.

           Any payments made by the borrower after the loan has
           been accepted by the DE should be deposited by the
           campus in a Cash Received Undistributed account and a
           check for the same amount should be sent to the DE.

           The journal entries to record the return of an
           accepted defaulted loan from the DE are presented in
           transaction 25), Appendix IV.

        6. Assignment of Defaulted Non-Federal Loans to Federal
           Government on a "Referral" Basis

           Defaulted non-Federal loans assigned to the DE on a
           "referral" (or collection) basis will remain as
           outstanding receivables with FWSFS.  Twenty percent
           of any funds collected by the Federal Government will
           be retained to defray its costs (similar to a
           collection agency commission); the remaining balance
           will be forwarded to the campus.  Procedures for
           recording funds collected by the Federal Government
           and its retention fee will be similar to the
           procedures for recording funds collected by a
           collection agency and its commission.  Payments
           received from the Federal Government may be processed
           on-line or a notification of a non-cash payment may
           be sent to FWSFS.  Examples of the journal entries to
           be made are presented as transaction 26), Appendix
           IV.

        7. Cancellations of FLP Loans Due to Teaching, Military
           Service, Volunteer Service, Disability or Death

           All cancellations will be reflected on the FWSFS
           Accounting Reports.  For details regarding
           cancellation procedures, refer to Federal Register
           dated December 1, 1987, Volume 52, No. 230, part
           674.52 or, for clarification, contact the Office of
           Financial Aid and Loan Collection in OP.

           The entries to be made to the general ledger to
           record cancellations are presented in transactions 

        8. Bankruptcy

           The entry to record the write-off of FLP loan(s) due
           to bankruptcy is presented in transaction 18),
           Appendix IV.

        9. Write-off of Uncollectible ULF and EFDL Loans

           The entries to record the write-off of ULF and EFDL
           loans are presented in transactions 19) and 20),
           Appendix IV.

          10.  Administrative Cost Recovery

           Information regarding Administrative Cost Recovery is
           presented in Accounting Manual chapter A-115-62,
           Accounting Procedures for Recording Federal Financial
           Aid Administrative Allowance.

          11.  Transfer of Loans Back to Campuses

           If, for any reason, a loan is transferred back to a
           campus, the entries to the general ledger should be
           the reverse of the entries illustrated in
           transactions 1), 2), and 3), Appendix III.

          12.  Offset Payments

           Offset payments consist of tax refunds or state
           lottery winnings which have been transferred from the
           State of California to the Office of Financial Aid
           and Loan Collection in OP for offset against
           delinquent student loan accounts.  Offset payments
           will be treated as non-cash payments.  However, if an
           offset payment cannot be applied by FWSFS because the
           applicable loan has been transferred to the Federal
           Government, the payment will appear on the monthly
           FWSFS Accounting Reports.  In such cases, the funds
           must be sent to the Federal Government.

          13.  Short-Term Investment Pool

           Short-Term Investment Pool (STIP) investment income
           will be automatically credited to campus local
           accounts as outlined in Appendix VII.  The
           appropriate general ledger fund number will be shown
           in the reference column for identification.


     E. GENERAL LEDGER RECONCILIATIONS

        It is essential that the FWSFS subsystem be reconciled
        to the general ledger each month.  Such reconciliation
        should include, but not be limited to, the following
        items:

        1) Receivable balances shown in the FWSFS Accounting
           Reports.

        2) Interest and principal cancellations, principal
           adjustments, interest income, late charges and
           collection costs in the general ledger clearing
           accounts.

        3) Accounts X-102097, Funds Received But Not Applied,
           and X-102199, Clearing Account--Miscellaneous.  The
           items in these accounts should be cleared as soon as
           possible.

        4) Account X-102190, Loan Repayment Clearing Account,
           which is reconciled to funds received from OP.

     F. FUNCTIONAL RESPONSIBILITIES PLAN

        Presented in Appendix VI is a plan reflecting functional
        responsibilities at OP, the campus, and FWSFS. 
        Procedural guidelines regarding responsibilities for
        reconciliation of accounting records are also presented
        in Appendix VI.

     G. UNIVERSITY STUDENT AID PROGRAM

        Beginning with the 1983-84 academic year, the
        Educational Fee Grant and EFDL programs were eliminated,
        and funding previously allocated to those two programs
        was allocated to the University Student Aid Program
        (USAP).  These changes were made to allow the campuses
        greater flexibility in awarding need-based financial
        aid.

        Previously, student repayments of EFDL had been returned
        to the OP and had been considered part of Annual
        Educational Fee income.  By eliminating the EFDL
        program, income is expected to begin to decrease in a
        few years, and eventually disappear.  As this income
        decreases, USAP funding is also expected to decrease. 
        To offset this future decrease in funding, all campuses
        are required to award as loans 15 percent of their
        annual USAP allocation through the University Student
        Loan program.  Collections on University student loans
        are retained by the campuses.  To offset future
        reductions in USAP funding, it will be necessary to
        build-up campus revolving loan balances.

        Some campuses may prefer to make the required loans
        through the Federal NDSL program rather than through the
        University Student Loan program.  This option was made
        available to campuses by Academic Vice President Frazer
        in a letter to Chancellors dated March 26, 1983.

        Transaction 4), Appendix I, presents sample budgetary
        and financial entries regarding the USAP program.

VI.  RESPONSIBILITIES

     The accounting officer is responsible for recording of and
     accounting for loan funds received by the campus and for
     the collection of outstanding student loans in accordance
     with the procedures outlined in this chapter.

VII. REFERENCES

     Federal Register, Federal Rules and Regulations (as
     amended), Parts 673, 674, 675, and 676, November 30, 1987
     and December 1, 1987.

     Department of Education Code of Federal Rules, Part III.

     Title IV Higher Education Act of 1965 (as amended).

     Director Donald L. Alter, Memoranda to Accounting Officers
     on Loan Fund Accounting, May 3, 1983, March 4, 1985, April
     18, 1985, and December 18, 1985.

     FWSFS Student Loan Management Operations Manual.

     FWSFS Student Loan Management Datalink Manual.

     Accounting Manual chapter:

        S-772-31  Student Fees:  Educational Fee


________________________
Historical note:  The original Accounting Manual chapter was
published 7/1/73 for centralized student loan accounting. 
Revised and published 9/1/78 and 1/1/80 for the decentralized
operations of student loan accounts.  Present revision 8/15/89;
analyst--Jim Williams.


Appendix I:  Recording Receipt of Loan Funds and Federal Capital
  Contributions


UC Accounting Manual
X.  Loan Fund Accounting
Student Aid:  Loan Fund Accounting
S-772-12 (TL 56, 8/17/90)
*****************************************************************
APPENDIX I:    RECORDING RECEIPT OF LOAN FUNDS AND FEDERAL CAPITAL
               CONTRIBUTIONS (See also Section II.C., text.)


    1)  To record receipt of loan funds provided by individuals
        and private organizations to the campus:

     Dr.  X-1100XX Campus Depository               XXXXX

     Cr.  X-102200 through 103989-XXXXX-0-8000  Funds
         Balances--ULF                                 XXXXX

    2)  To record the receipt of Federal Capital Contributions:

     Dr.  X-1100XX Campus Depository               XXXXX

     Cr.  X-2235XX-235XX DE Letter of Credit           XXXXX

     Dr.  X-2235XX-235XX DE Letter of Credit       XXXXX

     Cr.  X-102080-0399X-0  Federal Capital 
         Contributions-- FLP                           XXXXX

     Note: The same procedure will be followed for all FLP. 
           The appropriate accounts assigned to these loan
           programs, as shown in Appendix VII, should be used.

    3)  To record the required campus matching contributions from
        the EFDL funds (or appropriate fund source) to the NDSL
        funds balance (this amount is equal to one-ninth of the
        Federal Capital Contributions):

     Dr.  X-119850-20095-0-0450  Unexpended 
         Balance--Educational Fee                  XXXXX

     Cr.  X-103981-03981-0-8240  Fund Balance--FLP     XXXXX

     Note: The same procedure will be followed for all FLP. 
           The appropriate accounts assigned to these loan
           programs, as shown in Appendix VII, should be used.


    4)  To fund the USAP Programs:

     Financial Entry.  To record transfer to the USAP Program:

     Dr.  X-119850-20094-0-0435  Unexpended 
         Balance--Educational Fee                  XXXXX

     Cr.  X-104355-04355-0-8214  University Student 
         Loan Fund                                     XXXXX

     Budgetary Entry.  To adjust the provision for Student Aid
     account:

     Dr.  X-80XXXX-20094-8  Educational Fee--
         Provision for Student Aid              XXXXX

     Cr.  X-119850-20094-0  Unexpended Balance--
         Educational Fee                           XXXXX


Appendix II:  Journal Entries to Record Loans Granted


UC Accounting Manual
X.  Loan Fund Accounting
Student Aid:  Loan Fund Accounting
S-772-12 (TL 56, 8/17/90)
*****************************************************************

APPENDIX II:   JOURNAL ENTRIES TO RECORD LOANS GRANTED (See also
               Section II.C., text.)

All campuses use reference number control on Loan Fund Receivable
accounts; therefore, although not specifically indicated in the
following journal entries, this control is implied.

    1)  To record cash disbursed to student borrower(s) on ULF
     promissory notes:

     Dr.  X-102050-XXXXX-0  Notes Receivable--ULF, 
         Campus Control                            XXXXX

     Cr.  X-110XXX  Campus Revolving Fund                 XXXXX

    2)  To record cash disbursed to student borrower(s) for NDSL
        promissory notes:

     Dr.  X-102051-0399X-0  Notes Receivable--NDSL, 
         Campus Control                            XXXXX

     Cr.  X-110XXX  Campus Revolving Fund                 XXXXX

     Note: The same procedure will be followed for all FLP. 
           The appropriate accounts assigned to these loan
           programs, as shown in Appendix VII, should be used.


Appendix III:  Journal Entries to Record Transfers of
  Loans to FWSFS


UC Accounting Manual
X.  Loan Fund Accounting
Student Aid:  Loan Fund Accounting
S-772-12 (TL 56, 8/17/90)
*****************************************************************


APPENDIX III   JOURNAL ENTRIES TO RECORD TRANSFERS OF LOANS TO
               FWSFS (See also Section II.C., text.)

    1)  To transfer Notes Receivable--ULF from Campus Control to
        Notes Receivable--FWSFS:

     Dr.  X-102026-XXXXX-0  Notes Receivable--ULF, 
         FWSFS                                  XXXXX

     Cr.  X-102050-XXXXX-0  Notes Receivable--ULF, Campus
         Control                                       XXXXX

    2)  To transfer Notes Receivable from Campus Control to Notes
        Receivable--Federal Loan Fund (FLF), FWSFS:

     Dr.  X-102021-039XX-0  Notes Receivable--FLF, 
         FWSFS                                  XXXXX

     Cr.  X-102051-039XX-0  Notes Receivable--FLF      XXXXX

     Note: The same procedure will be followed for all Student
           Loan Programs by using the appropriate fund
           numbers.  The appropriate accounts assigned to
           these loan programs, as shown in Appendix VII,
           should be used.

    3)  To transfer Notes Receivable--EFDL from Campus Control to
        Notes Receivable--EFDL, FWSFS:

     Dr.  X-102020-02612-0  Notes Receivable--EFDL, 
         FWSFS                                  XXXXX

     Cr.  X-102040-02612-0  Notes Receivable--EFDL, Campus
         Control                                       XXXXX


Appendix IV:  Recording Collections, Cancellations, Bankruptcies,
  Write-Offs, and Refunds


UC Accounting Manual
X.  Loan Fund Accounting
Student Aid:  Loan Fund Accounting
S-772-12 (TL 56, 8/17/90)
*****************************************************************

APPENDIX IV:   RECORDING COLLECTIONS, CANCELLATIONS, BANKRUPTCIES,
               WRITE-OFFS, AND REFUNDS (See also Section II.C.,
               text.)


    1)  To record cash received by the Treasurer's Office via wire
        transfers from FWSFS (OP entry):

     Dr.  J-110000  Treasurer's General Cash       XXXXX

     Cr.  J-102190  Loan Repayment Control             XXXXX

    2)  To distribute to the campuses cash received by the
        Treasurer's Office via wire transfers from FWSFS (OP
        entry):

     Dr.  J-102190  Loan Repayment Control         XXXXX

     Cr.  J-1195X0  Campus Financial Control           XXXXX

    3)  To record collections of ULF interest and principal
        payments received by FWSFS:

     Dr.  X-119500  OP Financial Control           XXXXX

     Cr.  X-102026-XXXXX-0  Notes Receivable--ULF, 
         FWSFS                                     XXXXX

     Cr.  X-102200 through X-103989-XXXXX-0-8020  Funds
         Balances-- ULF (Interest)                 XXXXX

     The above entry--and any of the following entries--may, at
     the option of the campus, clear the Financial Control
     account into the Campus Loan Repayment Control account (X-
     102190).

    4)  To record collections of FLP loan interest and principal
        payments received by FWSFS:

     Dr.  X-119500  OP Financial Control           XXXXX

     Cr.  X-102021-039XX-0  Notes Receivable-FLP, 
         FWSFS                                     XXXXX

     Cr.  X-102100-039XX-0  Interest Income--FLP       XXXXX

        Note:  The same procedure will be followed for all FLP
               loans.  The appropriate accounts assigned to these
               loan programs, as shown in Appendix VII, should be
               used.


    5)  To record collections of EFDL interest and principal
        payments received by FWSFS:

     Dr.  X-119500  OP Financial Control           XXXXX

     Cr.  X-102020-02612-0  Notes Receivable--EFDL, 
         FWSFS                                     XXXXX

     Cr.  X-267900-20094-0  Interest Income--EFDL      XXXXX

    6)  To record cash or check payment received by the campus and
        deposited locally to the campus depository bank and posted
        immediately on-line via FWSFS terminal as a non-cash
        payment:

     Dr.  X-1100XX  Campus Depository              XXXXX

     Cr.  X-102190  Loan Repayment Control--Campus     XXXXX

     Note: When funds are deposited locally and a University
           check is sent to FWSFS together with the Regular
           payments transmittal, the Cash Receipts
           Undistributed account may be used to make the
           entries.

    7)  To record distribution of cash or check collected by the
        campus and deposited at its depository bank [see
        transaction 6), above]:

     Dr.  X-102190  Loan Repayment Control--Campus XXXXX

     Cr.  X-1020XX-XXXXX  Notes Receivable--FWSFS      XXXXX

     Cr.  X-XXXXXX-XXXXX  Interest Income (or Loan Fund
         Principal)                                    XXXXX

    8)  To record loan overpayment refunds of more than $5.00 to
        borrowers:

     Dr.  X-1020XX-XXXXX-0  Notes Receivable--FWSFS
                            or
         X-102095         Refund Due Borrowers     XXXXX

     Cr.  X-102190  Loan Repayment Control--Campus     XXXXX

     Note: Overpayment credits of $5.00 or more are to be
           credited to X-102190 Campus Repayment Control, then
           this same account is charged when the refund
           payment is made.

    9)  To eliminate loan overpayments or outstanding loan
        balances:

     a) Loan Overpayments should be eliminated via the Datalink
        Terminal

        (1)    University Loans

           Dr.  X-102026-XXXXX-0  Notes 
                Receivable--ULF, FWSFS             XXXXX

           Cr.  X-102200 through X-103989-XXXXX-
                0-8023  Funds Balances--ULF            XXXXX

        (2)    Federal Student Loans

           Dr.  X-102021-039XX-0  Notes 
                Receivable--FLP, FWSFS             XXXXX

           Cr.  X-102103-039XX-0  Other Costs and 
                Losses                                 XXXXX

           Use appropriate fund number for each program.

        (3)    Educational Fee Deferment Loans

           Dr.  X-102020-02612-0  Notes 
                Receivable--EFDL, FWSFS            XXXXX

           Cr.  X-102612-02612-0-8023  EFDL Fund       XXXXX


        Note:  Small under- and overpayments are offset at
               FWSFS and a net amount is recorded on the
               Accounting Reports.  It is important that
               campuses eliminate overpayments directly via
               FWSFS on-line terminal when possible.  This
               procedure is illustrated under transaction 8),
               Appendix IV.

     
    10) To record collection agency commissions as deducted from
        the loan payment by the agency:

     a) University Loans

        Dr.  X-102200 through X-103989-XXXXX-0-8127  
            Funds Balances--ULF                    XXXXX

        Cr.  X-102026-XXXXX-0  Notes Receivable--FWSFS XXXXX

     b) Educational Fee Deferment Loans

        Dr.  X-102612-02612-0-8127  Fund Balance--
            EFDL                                   XXXXX

        Cr.  X-102026-XXXXX-0  Notes Receivable--FWSFS XXXXX

     c) Federal Student Loans

        Dr.  X-102102-039XX-0  Collection 
            Commissions                            XXXXX

        Cr.  X-102021-039XX-0  Notes Receivable--FWSFS XXXXX

     Note: The same procedure will be followed for all FLP. 
           The appropriate accounts assigned to these loan
           programs, as shown in Appendix VII, should be used.

    11) To record collection agency commissions shown on bills
        submitted by the agency and paid by the campus:

     a) University Loans

        Dr.  X-102200 through X-103989-XXXXX-0-8127  
            Funds Balances--ULF                    XXXXX

        Cr.  X-110XXX  Campus Revolving Fund           XXXXX

     b) Educational Fee Deferment Loans

        Dr.  X-102612-02612-0-8127  Fund Balance--
            EFDL                                   XXXXX

        Cr.  X-110XXX  Campus Revolving Fund           XXXXX


     c) Federal Loan Programs

        Dr.  X-102102-039XX-0  Collection 
            Commissions                            XXXXX

        Cr.  X-110XXX  Campus Revolving Fund           XXXXX

     Note: The same procedure will be followed for all loan
           programs for payments of litigation expense and
           other collection costs.  The appropriate accounts
           assigned to these loan programs, as shown in
           Appendix VII, should be used.

    12) To record bad checks, stopped payment checks, etc., as
        debited in the current month bank statement, but not
        posted to the borrowers' account by FWSFS:

     Dr.  X-102097  Funds Received But Not Applied XXXXX

     Cr.  X-119500  OP Financial Control               XXXXX

    13) To record bad checks, stopped payment checks, etc., as
        debited in the prior month bank statement, but not posted
        to the borrowers' accounts until the current month:

     Dr.  X-10202X-XXXXX-0  Notes Receivable--FWSFS    XXXXX

     Cr.  X-102097  Funds Received But Not Applied     XXXXX

    14) To record cancellation of Teaching Services--Federal
        Student Loans:

     Dr.  X-102104-039XX-0  Cancellation of Principal--
         Teaching Services                         XXXXX

     Dr.  X-102105-039XX-0  Cancellation of Interest--
         Teaching Services                         XXXXX

     Cr.  X-102021-039XX-0  Notes Receivable--FWSFS       XXXXX

     Cr.  X-102100-039XX-0  Interest Income            XXXXX

    15) To record cancellation of FLP loan(s) due to death or
        disability:

     Dr.  X-102016-039XX-0  Cancellation of Principal
         due to death or disability                XXXXX

     Dr.  X-102107-039XX-0  Cancellation of Interest due 
         to death or disability                    XXXXX

     Cr.  X-102021-039XX-0  Notes Receivable--FWSFS       XXXXX

     Cr.  X-102100-039XX-0  Interest Income            XXXXX

     Note: The same procedure will be followed for all loan
           programs.  The appropriate accounts assigned to
           these loan programs, as shown in Appendix VII,
           should be used.

    16) To record cancellation of Nursing Student Loan(s), due to
        Nursing Service:

     Dr.  X-102144-03995-0  Cancellation of Principal--
         Nursing Services, NSL                     XXXXX

     Dr.  X-102145-03995-0  Cancellation of Interest--
         Nursing Services, NSL                     XXXXX

     Cr.  X-102025-03995-0  Notes Receivable--NSL, 
         FWSFS                                     XXXXX

     Cr.  X-102140-03995-0  Interest Income-NSL        XXXXX

    17) a) To record cancellation of FLP loan(s), due to Military
           Service:

        Dr.  X-102151-039XX-0  Cancellation of Principal--
            Military Services                      XXXXX

        Dr.  X-102152-039XX-0  Cancellation of Interest--
            Military Services                      XXXXX

        Cr.  X-102021-039XX-0  Notes Receivable--FWSFS XXXXX

        Cr.  X-102100-039XX-0  Interest Income         XXXXX

     b) To record cancellation of outstanding balance on FLP
        loan(s) for service as a volunteer:
 
        Dr.  X-102161-039XX-0  Cancellation of 
            Principal--Volunteer Service, FLP      XXXXX

        Dr.  X-102162-039XX-0  Cancellation of 
            Interest--Volunteer Service, FLP    XXXXX

        Cr.  X-102021-039XX-0  Notes Receivable--FLP,
            FWSFS                                  XXXXX

        Cr.  X-102100-039XX-0  Interest Income--FLP    XXXXX

    18) To record write-off of Federal loan(s) due to bankruptcy:

     Dr.  X-102156-039XX-0  Cancellation of 
         Principal--Bankruptcy, FLP                XXXXX

     Dr.  X-102157-039XX-0  Cancellation of 
         Interest--Bankruptcy, FLP              XXXXX

     Cr.  X-102021-039XX-0  Notes Receivable--FLP,
         FWSFS                                     XXXXX

     Cr.  X-102100-039XX-0  Interest Income--FLP       XXXXX

    19) To record write-off of uncollectible ULF loan(s):

     Dr.  X-102200 through X-103989-XXXXX-0-8125 Funds
         Balances--ULF                             XXXXX

     Cr.  X-102026-XXXXX-0  Notes Receivable--ULF,
         FWSFS              X                      XXXX

     In the case of ULF, the write-off may be charged, at the
     campus' option, to the Loan Fund Pool Reserve.

 20) To record write-off of EFDL:

     Dr.  X-102612-02612-0-8125  Fund Balance--EFDL    XXXXX

     Cr.  X-102020-02612-0  Notes Receivable--EFDL,
         FWSFS                                     XXXXX

    21) To appropriate on July 1, the yearly estimated
        Administrative Cost Recovery Allowance for the current
        fiscal year (Budget Journal):

     Dr.  X-119700-75040-0  Reserve--Financial Aid
         Administrative Allowance                  XXXXX

     Cr.  X-XXXXXX-75040-X  Expenditure(s)             XXXXX

    22) To adjust to the actual amount at June 30, the yearly
        estimated Administrative Cost Recovery Allowance for the
        fiscal year ended:

     Dr.  X-102178-03991-0  FLP Administrative Cost    XXXXX

     Cr.  X-119700-75040-0-0140  Reserve--Financial 
         Aid Administrative Allowance                  XXXXX

    23) To record transfer of Notes Receivable--FWSFS back to a
        campus:

     Note: These entries will be the reverse of transactions
           1), 2), and 3) shown in Appendix III.  The source
           for these entries will be the information on the
           transactions and adjustments journal received from
           FWSFS on its standard monthly reports (may be
           requested weekly) which will show the item being
           transferred as a reversal of principal collected.

    24) To record assignment of FLP defaulted loans to the Federal
        Government:

     Dr.  X-102109-039XX-0  Cancelled Principal--Assigned
         to Federal Government                     XXXXX

     Dr.  X-102158-039XX-0  Cancelled Interest--Assigned
         to Federal Government                     XXXXX

     Cr.  X-102021-039XX-0  Notes Receivable--FWSFS       XXXXX

     Cr.  X-102100-039XX-0  Interest Income            XXXXX

    25) To record repurchase of invalid defaulted loans from DE:

     a) To record reversal of accumulated interest (100%) on
        defaulted note repurchased from DE:

        Dr.  X-102100-0399X  Interest Income       XXXXX

        Cr.  X-102158-0399X  Cancelled Interest--Assigned
            to Federal Government                      XXXXX


     b) To write-off the U.C. equity (10%) in the defaulted
        note repurchased from DE:

        Dr.  X-10399X-0399X-X-8125  U.C. FLP 
            Contribution                        XXXXX

        Cr.  X-102109-0399X  Cancelled Principal--Assigned
            to Federal Government (10%)                XXXXX

     c) To write-off the Federal equity (90%) in the defaulted
        note purchased from DE:

        Dr. (Source of funding to be determined by campus in
           accordance with section IV.I of Accounting  Manual
           chapter R-212-2--Receivables
           Management)                             XXXXX

        Cr.  X-102109-0399X  Cancelled Principal--Assigned
            to Federal Government (10%)                XXXXX

     d) To buy back a defaulted loan at 90% of value from the
        Federal Government because of an invalid note:

        Dr.  X-102081-0399X  Repayment of Federal Government
              Contribution                         XXXXX

        Cr.  X-110XXX  Campus Revolving Fund           XXXXX

        Note:  The DE has indicated that if an invalid note is
               discovered before acceptance by the DE, the
               campus will have to buy back the loan from the
               DE at 90% of value.  Under these circumstances,
               the accounting procedures are as illustrated in
               transaction 25), Appendix IV.  If, however, the
               valid note is discovered after the loan has been
               received by the DE, the acceptance may be
               revoked.  Under these circumstances, the journal
               entries shown in transaction 24), Appendix IV
               will be reversed.  It should be noted that the
               DE may revoke acceptance of an invalid note up
               to 7 years after receipt of the note.

    26) To record cash collections on loans which have been sent
        to the DE on a "referral" (or collection) basis:

     Dr.  X-110XXX  Campus Revolving Fund              XXXXX

     Dr.  X-102102-039XX-0  Collection Commissions XXXXX

     Cr.  X-102021-039XX-0  Notes Receivable--FWSFS       XXXXX


Appendix V:  Closing Entries


UC Accounting Manual
X.  Loan Fund Accounting
Student Aid:  Loan Fund Accounting
S-772-12 (TL 56, 8/17/90)
*****************************************************************


APPENDIX V:  CLOSING ENTRIES (See also Section II.C., text.)

(Similarly illustrated in the annual fiscal closing schedule)

A.   To establish on reversing journal entries the Notes
     Receivable and Loan Fund balances for emergency and student
     loans granted by the Dean's Office during the year and
     outstanding at June 30 (reversing journal type 14):

 Dr.  Notes Receivable--Loan Fund
        X-102050-02XXX-0                        XXXXX

 Cr.  Student Aid
        X-7XXXXX-4XXXX-3-7200                          XXXXX

 Dr.  Unexpended Balances--Private Gifts and Grants
        X-119800-4XXXX-0-0410                      XXXXX

 Cr.  Loan Fund Balances
        X-102XXX-02XXX-0-8205                          XXXXX

B.   1) To establish a Loan Fund Receivable from the Federal
        Government for the University's share (1/10) of interest
        and principal cancelled by Federal incentive provisions,
        i.e., teaching, military or public service that are
        reimbursable (to apply only to FLP 039XX):

     Dr.  Receivable Federal Program--Various Cancellations
           X-102015-039XX-0                        XXXXX

     Cr.  OP Financial Control
           X-119500                                    XXXXX

 2)  To record responding entry for the establishment of a Loan
     Fund Receivable from the Federal Government made in B.1),
     above:

     Dr.  Campus Financial Control
           J-1195X0                                XXXXX

     Cr.  Unexpended Balances--EFDL
           J-119850-20094-0-0199                       XXXXX


 3)  To establish a loan fund receivable from the Federal
     Government for the reimbursement of teaching and military
     service cancellation of principal and interest of FLP
     Loans (039XX):

     Dr.  Receivable Federal Programs--Various Cancellations
           X-102015-039XX-0                        XXXXX

     Cr.  Federal Reimbursement of Service Cancellations
              X-102153-039XX-0                            XXXXX

C.   To adjust Federal and University capital contributions for
     entries shown in the clearing accounts (the following 5
     financial entries are required on a reversing journal (type
     14) after all adjustments have been made, prior to the final
     ledger cutoff):

 1)  To adjust Federal and University capital contributions by
     the amounts of loans and interest written-off in clearing
     accounts 102104, 102105, 102106, 102107, 102151, 102152,
     102153, 102156, 102157, 102162, and 102162:

     Dr.  Federal Loan Programs--Capital Contributions, 9/10
           X-103978-03978-0-8125                XXXXX

     Dr.  University Capital Contributions, 1/10
           X-103999-039XX-0-8125                XXXXX

     Cr.  FLP Income and Expense Control
           X-102108-039XX                              XXXXX

 2)  To adjust Federal and University capital contributions by
     the amounts of loans and interest assigned to the Federal
     Government in NDSL 10209 and 102158:

     Dr.  Federal Loan Programs--Capital Contributions, 9/10
           X-103978-03978-0-8126                XXXXX

     Dr.  University Capital Contributions, 1/10
           X-103999-039XX-0-8126                XXXXX

     Cr.  FLP Income and Expense Control
           X-102108-039XX                              XXXXX

 3)  To adjust Federal and University capital contributions by
     the amounts of income in clearing account 102100:

     Dr.  NDSL Income and Expense Control
           X-102108-039XX                          XXXXX


     Cr.  Federal Loan Programs--Capital Contributions, 9/10
           X-103978-03978-0-8020                   XXXXX

     Cr.  University Capital Contributions, 1/10
           X-103999-039XX-0-8020                   XXXXX

 4)  To adjust Federal and University capital contributions by
     the amounts of other income in NDSL clearing account
     102101:

     Dr.  FLP Income and Expense Control
           X-102108-039XX                          XXXXX

     Cr.  Federal Loan Programs--Capital Contributions, 9/10
           X-103978-03978-0-8023                   XXXXX

     Cr.  University Capital Contributions, 1/10
           X-103999-039XX-0-8023                   XXXXX

 5)  To adjust Federal and University capital contributions by
     the amounts of litigation and collection costs in NDSL
     clearing accounts 102102, 102103, 102154, 102155, and
     102178:

     Dr.  Federal Loan Programs--Capital Contributions, 9/10
           X-103978-03978-0-8127                XXXXX

     Dr.  University Capital Contributions, 1/10
           X-103999-039XX-0-8127                XXXXX

     Cr.  FLP Income and Expense Control
           X-102108-039XX                              XXXXX

     Note: The same procedures will be followed for all loan
           programs.  The appropriate accounts assigned to
           these loan programs, as shown in Appendix VII,
           should be used.  All clearing accounts must be
           zeroed out at this time, with the same reversing
           entries, as illustrated above.

D.   To reclassify Federal Liability (102080) to Funds Balance for
     year end reporting.  Account 102098 is a contra account to be
     established at each campus as an offset for Federal capital
     contributions.

 Dr.  Federal Capital Contributions
        X-102098-039XX                             XXXXX

 Cr.  Federal Loan Programs--Capital Contributions
        X-103978-03978-0-8038                          XXXXX


Appendix VI:  Functional Responsibilities Plan

UC Accounting Manual
X.  Loan Fund Accounting
Student Aid:  Loan Fund Accounting
S-772-12 (TL 56, 8/17/90)
*****************************************************************

APPENDIX VI:  FUNCTIONAL RESPONSIBILITIES PLAN

                  Policy or
                   Policy-  Opera-
Functions          Related  tions  Action         Responsibility

Converting of                 X    Campus         Campus
loan(s) to the
FWSFS System, 
conducting exit
interviews, re-
viewing, and up-
dating the files

Inputting borro-              X    FWSFS          Campus
wer billing and 
collection data 
with FWSFS auto-
mated system

Billing in con-               X    FWSFS          Campus
sonance with Fed-
eral standards of
"minimum due
diligence"

Processing payments           X    FWSFS          Campus

Processing cancel-            X    FWSFS          Campus/FWSFS
lation and defer- 
ment forms

Maintaining the-              X    FWSFS          Campus/FWSFS
billing and record 
keeping system

Performing of                 X    Campus         Campus
post-audit of 
cancellation and 
deferment forms

Maintaining                   X    Campus         Campus
borrower physical
files

Corresponding                 X    Campus/FWSFS   FWSFS/Campus
with borrowers
because accounts 
are past due



                  Policy or
                   Policy-  Opera-
Functions          Related  tions  Action         Responsibility

Responding to                 X    Campus/FWSFS   Campus
borrower inquiries

Rescheduling loans            X    Campus/FWSFS   Campus

Locating lost                 X    Campus/Skip    Campus
borrowers--skip                    Tracing Agencies
tracing

Assigning delinq-             X    Campus         Campus
uent accounts to 
collection agencies

"Reconciling" ac-             X    Campus         Campus
counts assigned to 
collection agencies 
with total accounts

Safeguarding of               X    Campus         Campus
accounts under 
litigation

Closing paid-in-              X    Campus         Campus
full accounts

Writing off of                X    Campus         Campus
uncollectible 
accounts

Reconciling loan              X    Campus/FWSFS   Campus
accounts

Reconciling sub-              X    Campus         Campus
sidiary ledger

Selecting and ad-             X    Campus         Campus
ministering specific
skip tracing and
collection agencies

Preparing campus              X    FWSFS/Campus   Campus
level management
reports

Preparing opera-              X    FWSFS          FWSFS 
tional management
reports



                  Policy or
                   Policy-  Opera-
Functions          Related  tions  Action         Responsibility

Formulating and               X      *OP              *OP
evaluating OP pol-                 (Coordinator)  (Coordinator)
icies and guidelines

Reviewing, evaluat-           X      *OP              *OP
ing, and disseminating             (Coordinator)  (Coordinator)
Federal, State, Regental,
and OP Administration
policies and guidelines.

Reviewing liaison             X      *OP              *OP
between OP Administra-             (Coordinator)  (Coordinator)
tion, campuses, Fed-
eral, and State agencies

Administering OP Stu-         X      *OP              *OP
dent Loan billing                  (Coordinator)  (Coordinator)

Developing management         X      *OP               *OP
information for OP                 (Coordinator)  (Coordinator)
officers (special 
reports and summary
reports)

Filing bankruptcy             X      *OP              *OP
claims                             (Coordinator)  (Coordinator)

Reviewing, auditing,          X        OP              OP
and assessing effec-               (Internal      (Internal
tiveness of collect-                  Audit)        Audit)
ion process

Performing as lia-            X         OP                      OP
ison with OP exter-                (Internal      (Internal
nal auditors                          Audit)         Audit)

Reconciliation and            X        *OP           *OP
distribution of funds              (Coordinator)  (Coordinator)
transferred from FWSFS  



*Office of the President "Director-Financial Aid and Loan
Collections".


Appendix VII:  Loan Fund Chart of Accounts

UC Accounting Manual
X.  Loan Fund Accounting
Student Aid:  Loan Fund Accounting
S-772-12 (TL 56, 8/17/90)
*****************************************************************

APPENDIX VII:  LOAN FUND CHART OF ACCOUNTS


(Chart not available on Gopher)





_____________________________________
(1) These accounts are controlled by reference number.
(2) This account may be used for repayments while in school.
(3) Interest income on Educational Fee is to be credited to
    account X-267900-20094-0.
(4) This account only exists at Office of the President.


Appendix VIII:  Loan Fund By School/Program Campus and Fund
  Numbers

UC Accounting Manual
X.  Loan Fund Accounting
Student Aid:  Loan Fund Accounting
S-772-12 (TL 56, 8/17/90)
*****************************************************************

APPENDIX VIII:  LOAN FUND BY SCHOOL/PROGRAM CAMPUS AND FUND
NUMBERS

SCHOOL
(Program)                               FUND TITLE AND
  #'s            NAME                       FUND #'s            

 70100    UC Berkeley         NDSL & Perkins (03990-03999)
 70110    UC Berkeley         Ed. Fee Deferral (02612)
 70120    UC Berkeley         Regents (03460)
 70130    UC Berkeley         H.P. Opt.-Pharm.-Vet. Med. (03996)
 70180    UC Berkeley         Various

 70200    UC San Francisco    NDSL & Perkins (03990-03999)
 70210    UC San Francisco    Ed. Fee Deferral (02612)
 70220    UC San Francisco    Regents (Various)
 70230    UC San Francisco    H.P. Opt.-Pharm.-Vet. Med. 
                                (03976 & 03996)
 70240    UC San Francisco    H.P. Medicine (03978 & 03998)
 70250    UC San Francisco    H.P. Dentistry (03977 & 03997)
 70260    UC San Francisco    Nursing - Undergraduate 
                                (03974 & 03994)
 70270    UC San Francisco    Nursing - Graduate (03973 & 03993)
 70280    UC San Francisco    Regents (Various)

 70300    UC Davis            NDSL & Perkins (03990-03999)
 70310    UC Davis            Ed. Fee Deferral (02612)
 70320    UC Davis            Regents/USL (03455)
 70330    UC Davis            H.P. Opt.-Pharm.-Vet. Med. (03996)
 70340    UC Davis            H.P. Medicine (03998)
 70380    UC Davis            Misc. Univ. Long-Term Loans
                                (Various)
 
 70400    UC Los Angeles      NDSL & Perkins (03990-03999)
 70410    UC Los Angeles      Ed. Fee Deferral (02612)
 70420    UC Los Angeles      Regents - Short-Term (Various)
 70430    UC Los Angeles      (Not being used at this time) --
 70440    UC Los Angeles      H.P. Medicine (03998)
 70450    UC Los Angeles      H.P. Medicine (03997)
 70460    UC Los Angeles      Nursing - Graduate (03995)
 70470    UC Los Angeles      Nursing - Undergraduate (03994)
 70480    UC Los Angeles      Regents - Long-Term (Various)
 70490    UC Los Angeles      Regents (Various)

 70500    UC Riverside        NDSL & Perkins (03990-03999)
 70510    UC Riverside        Ed. Fee Deferral (02612, 02613)
 70520    UC Riverside        Regents (03400, 03455-03457)



SCHOOL
(Program)                               FUND TITLE AND
  #'s            NAME                       FUND #'s            

 70600    UC San Diego        NDSL & Perkins (03990-03999)
 70610    UC San Diego        Ed. Fee Deferral (02612)
 70620    UC San Diego        Regents (Various)
 70630    UC San Diego        (Not being used at this time) --
 70640    UC San Diego        H.P. Medicine (03998)
 70680    UC San Diego        Regents - Medicine (Various)

 70700    UC Santa Cruz       NDSL & Perkins (03990-03999)
 70710    UC Santa Cruz       Ed. Fee Deferral (02612)
 70720    UC Santa Cruz       Regents (Various)
 
 70800    UC Santa Barbara    NDSL & Perkins (03990-03999)
 70810    UC Santa Barbara    Ed. Fee Deferral (02612)
 70820    UC Santa Barbara    Regents (03500)

 70900    UC Irvine           NDSL & Perkins (03990-03999)
 70910    UC Irvine           Ed. Fee Deferral (02612)
 70920    UC Irvine           Regents (Various)
 70930    UC Irvine           (Not being used at this time) --
 70940    UC Irvine           H.P. Medicine (03998)


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