Program Administration

• For all districts, the amount shown on the GAN represents the total of all maximum monthly payments made to each of the district’s listed participants. This will account for both back payments due to each individual participant and monthly payments due to those participants, going forward to the end of SOM FY 24.
• This information was provided by districts at the time of application, and districts should be careful to compare the calculation provided on the GAN with their roster of participant information that was submitted to MDE.
• The maximum monthly payment is $200, or $400 if the participant works in a district falling under Band 6 of the Opportunity Index as reported by the Office of State Aid and School Finance in the 2023-24 At-Risk Estimate spreadsheet.

For districts whose initial Student Loan Repayment Program applications were free of errors, Grant Award Notifications (GANs) are expected to be sent to districts by the first half of July 2024.

• For these districts, first payments are anticipated to be delivered with the July State Aid payment.
• Two payments will represent the funds available from which to pay participants through the end of the State of Michigan’s (SOM) Fiscal Year (FY) 24.
  • The July payment will be equal to 10/11 of the amount shown on the GAN.
  • The final 1/11 will come to the school district in August.

For districts who successfully submitted corrections to their initial applications at the end of May 2024 after being contacted by MDE, GANs are expected to be sent to districts in mid-August 2024.

• For these districts, first payments are anticipated to be delivered with the August State Aid payment.
• This payment will be equal to the amount shown on the GAN.

• Districts should first refer to the Section 27k Student Loan Repayment Program Financial Considerations and Accounting Guidance, published May 10, 2024, from the Office of State Aid and School Finance. 
• KEY CONCEPT: Districts have the responsibility to make “regular monthly payments on an equal basis” (MCL 388.1627k) to participants equal to the actual payments they make to their loan servicer, up to the maximum amount of $200 or $400 (see above).
  • Note that this means that many participants may be paid less than the maximum amount, even though districts have been sent the maximum amounts per participant in their State Aid payments.
  • The maximum amount sent to districts thus becomes an “escrow” against which payments can be made, and potential future increases in monthly payments can be accommodated.
  • Districts must then create systems to account for the excess paid to each participant, with accurate recordkeeping of payments paid against maximum balances.
• It is important to understand that the money paid to eligible participants under the Student Loan Repayment Program is not a wage or salary. MDE recommends using the accounting code 2390 to designate monthly payments to participants as an “Other Special Allowance.”
• Districts should create financial systems that efficiently pass both initial and monthly payments to participants, minimizing delay to the extent possible.
• Districts are encouraged to keep the Office of State Aid and School Finance in mind for best practices governing financial accounting and monitoring.
• IMPORTANT: MDE does not provide tax advice. However, districts are encouraged to communicate with participants about IRS Publication 970 and to direct participants to tax professionals for information about thresholds for non-taxable benefits.

• After receiving funds from MDE with State Aid payments, districts should first plan to calculate and pass an initial payment to each listed participant which represents the sum total of all actual monthly payments made to the participant’s loan servicer, to the maximum of $200 or $400 per month (see above), between October 1, 2023 and the month in which the district received the Student Loan Repayment Program funds.
• At the time of creating the GANs for distribution, MDE already used reported numbers of “back” payments to October 1, 2023 in its calculations for total award, multiplying this number by $200 or $400. It then added to this amount a calculation for the maximum monthly payments needed to finish out the State of Michigan’s FY 24. More details about the MDE calculation process are found in the Section 27k Student Loan Repayment Program Financial Considerations and Accounting Guidance document (see “Overview,” section above).
• Thus, districts will be sent enough funds to pay each of their listed participants an initial payment that accounts for the total of the actual payments made to their loan servicer between October 1, 2023, and the month when their applicant district received funds in the State Aid payment.
• Districts should refer to their own participant records to calculate this payment; the method of payment is left up to the district, but MDE recommends this initial payment remain separate from each monthly payment going forward for ease of recordkeeping.

• Once an initial payment is calculated and made, districts are expected to use the actual monthly payment information collected by eligible participants to make regular monthly payments to participants going forward.
• The method and schedule of payments are left up to the district, but MDE recommends that districts communicate with their participants to establish a regular schedule of when monthly payments are passed to participants for best financial planning on both ends.
• Districts should plan for a seamless transition to FY 25 as possible with the next cohort application in mind.
  • Districts should plan for the lack of a September State Aid payment so that individual participants who were eligible since the Cohort 1 application do not experience an interruption in their monthly payments.
  • The Cohort 2 application will be streamlined to minimize delay in distributing awards and continuing funds for eligible participants into SOM FY 25 (see below).

Staff members included as eligible participants on a district’s Student Aid Repayment Program application who left employment at a point between the submission of the application and the first State Aid payment made to the district should still receive their initial payments as described above.

• The district is expected to determine a method for sending a departing participant the initial payment in a manner as efficient as possible given the circumstances of departure.
• The district should not plan to continue paying monthly payments after the initial payment is made.

• Since districts cannot modify past Student Loan Repayment Program application data for past cohorts, participants who may have been eligible and who may have been listed in a previous district’s application will have to wait for their new district to include them in the next cohort.
• Districts should not plan to provide these new employees monthly payments when they join their district, even if they were eligible under their previous employer’s application and subsequent award.
  • The district should plan to add these eligible participants to the next cohort application.
  • The district should also re-verify eligibility under its own policies and procedures, since circumstances may have changed in the transition time.

• MDE encourages cooperation between intermediate school districts (ISDs) or Regional Education Service Areas (RESAs) and the districts within their service area to ensure a continuity of personnel services for employees that transfer between employment for an ISD or RESA and an individual district (or vice-versa), where possible.
• Pursuant to an agreement between a district and its ISD or RESA, a participant receiving monthly payments under the Student Loan Repayment Program can continue to receive those payments even if they transfer employment to or from a district and its ISD or RESA.
• The district and the ISD or RESA can use a future cohort application (see below) to reflect this transition, ensuring the transitioning employee continues to receive the benefits under the Student Loan Repayment Program.

• Under MCL 388.1627k, it is the responsibility of the individual participant to notify their applicant district of any changes in actual payment amount, as well as whether or not their student loan(s) have been paid off or forgiven.
• If a participant leaves employment, the district should stop monthly payments starting on the month following leaving employment.
  • Note that the participant may still be due an initial payment for back months paid (see above).
• If a participant remains employed but drops out of eligibility for any reason (for example, begins working less than 32 hours per week, or takes a role that the district deems no longer working directly with students), then the district should stop monthly payments starting on the month following the transition out of eligibility.

• It is the duty of the district to establish protocols for participants to annually certify that the funds allocated to them were used as intended, specifically to help offset payments towards student loans. (thus, either fully or partially offsetting actual payments made on student loans).
  • The method of gathering and reviewing participant information is left up to the district, although MDE recommends the following:
    • Maintain the same level of confidentiality and security with all participant loan records as with any other HR or personnel related documentation.
    • Create procedures which are as streamlined and non-invasive as possible into the private financial transactions of participants.
  • This report is internal to the district and is not shared with MDE; and in general, NEVER send personally identifiable information (PII) to MDE.
• Look for forthcoming communications from the Office of Educator Excellence (OEE) on monitoring and reporting.