Since You Asked:
Questions & Answers
December 20, 2018
Periodically we are asked questions regarding an interpretation of the laws, regulations, or policies related to the administration of the Title IV Federal Student Aid (FSA) Programs. In this series we provide questions, and the related answers, generated by our interaction with clients and the U.S. Department of Education (ED).
Contents by Topic
Institutional Recertification Emergency Contact Info
Valid High School Diploma/Transcript
Citizenship and Third-Step Verification
Cost of Attendance
Verification and Deadlines
Satisfactory Academic Progress and Excused Absences
Disbursements of Subsequent Loans
Does it seem like ten years is a long time? That is the period of time over which those working with Federal Student Aid (FSA) have to address the effects of “sequestration.” For those who have been around a year or more, you will recall that sequestration came about as a result of the Budget Control Act (BCA) of 2011. The financial aid community was first impacted with the first round of sequestration effective in March of 2013. BCA is commonly called the sequester law. A portion of the BCA mandates comprehensive cuts in certain programs annually. The sequestration effects of the BCA are still with us for a few more years, barring any future legislative action to end or reverse the BCA’s impact on the FSA programs.
It is important to remember that the BCA impacts various Title IV FSA programs differently. For example, the Federal Pell Grant program is exempt from sequester. But, other programs are impacted, specifically the Federal Direct Loan (DL) programs and the Iraq-Afghanistan Service Grants (IASG), as well as the TEACH Grant program. The DL programs are required to experience an alteration in the applicable l
The economy is one topic that stays relevant and is regularly a subject of news stories. Closely related is the topic of interest rates. Without going into a long discourse on economic conditions or policy, suffice it to say that interest rates have a significant impact on the economy. And, with student loans now reportedly to have grown to be a $1.4 trillion[i] segment of the debt of the population of the United States as of the end of last year, the interest rates applied to student loans is of interest to a large segment of people.
The interest rate for all loans made after July 1, 2013, is set at a fixed rate. This rate structure was implemented with the Bipartisan Student Loan Certainty Act of 2013, which overh
Financial aid administrators at times may wonder if a student is striving to become a professional student. But, at other times, the financial aid officer wonders if the student is ever going to complete any educational program! Interestingly, the U.S. Department of Education (ED) wants to know whether or not they have completed a program, as well—especially a “gainful employment” (GE) program.
ED has announced in the Gainful Employment (GE) Electronic Announcement #114 that it has distributed institutions’ Draft Gainful Employment “Completers Lists” to the institutionally designated Student Aid Internet Gateway (SAIG) mailbox for GE message
The U.S. Department of Education (ED) has distributed revised Federal Pell Grant Payment and Disbursement Schedules for the 2018-2019 award year. The new schedules were released with ED’s Dear Colleague Letter GEN-18-04 (DCL GEN-18-04) on April 10, 2018. The newly updated schedules were necessitated due to the passage of the Consolidated Appropriations Act of 2018 (Public Law 115-141), which was signed into law on March 23, 2018.
Crux of the DCL and New Payment Schedules
The new maximum Pell Grant award for 2018-2019 is now $6,095. The minimum scheduled award for a full year for 2018-2019 will now be $650. The maximum possible expected family contribution (EFC) that an applicant may have and still receive some amount of Pell Grant for the award year, if otherwise eligible, is 5486. It is important that institutions ensure that all 2018-2019 Federal Pell Grant awards are made based upon the “revised” schedules included with DCL Gen-18-04.
Books, Supplies, and Equipment. Oh My!
There is a familiar line in the cinema classic, Wizard of Oz, as Dorothy and her unique companions were walking in the dark forest: “Lions and tigers and bears! Oh, my!” No doubt the line in this timeless film could be paraphrased for the world of financial aid: “Books and supplies, kits and equipment! Oh, my!” Yes, in the financial aid realm—especially in the proprietary sector—this topic has, on occasion, perhaps brought apprehension similar to what the traveling trio experienced while traversing down the yellow brick road.
It has become clear that not all institutions are charging by the payment period, and thus, accordingly may not charge books, supplies, and kits, as a first payment period charge. Let us explore concerns related to this refrain about books, supplies, kits, and equipment.
One of the first concepts that requires a clear understanding is the meaning of “institutio
It has been almost 10 years since the signing of the Higher Education Opportunity Act (HEOA) in 2008. One of the provisions added in that Reauthorization of the Higher Education Act (HEA) of 1965 was the requirement for most institutions to have a Net Price Calculator (NPC) available on the institution’s Web site. So, it would seem that everyone should know about the NPC requirement and what the law stipulates about it. But, undoubtedly, there are numerous institutions that are lacking in a thorough understanding of the NPC provisions, or are remiss in fulfilling the mandate of the law. With the recent release of the 2018 Net Price Calculator template, it is time to take another look at t
“Draft” is an interesting word with many different meanings. A “draft” is a process used in sports in the United States of America to select players for various teams within a league. A person can also be “drafted” into politics based upon a large base of public support, as was the case for both major political parties’ candidates in the 1952 presidential election, resulting in the election of President Dwight D. Eisenhower. And, in days gone by, young men were worried about the “draft” resulting in their potential involuntary selection for military service. But, more generally, we think of a “draft” as being the initial effort at, or version of, a project, report, or writing.
With the U.S. Department of Education’s (ED) calculation of cohort default rates, it is no different. There is an initial “draft” of the rates calculated before the final, official release
October 2017 marked the anniversary of the implementation of what has been called “the early FAFSA,” and the use of prior-prior year (PPY) income when submitting the Free Application for Federal Student Aid (FAFSA). Two years earlier, on September 14, 2015, President Obama announced major changes in the historic application process for Federal Student Aid. Those changes included the earlier application processing start-up for subsequent financial aid award years (July 1 through June 30), beginning with the 2017-2018 award year. This allowed students’ early submission of FAFSAs—for the first time—for the 2017-2018 award year, beginning October 1, 2016. Likewise, this year students across the country began submitting their FAFSA as of October 1, 2017, for the 2018-2019 award year, even as they are finalizing plans and preparations to attend the postsecondary institution of their choice in the upcoming academic 2018-2019 year.
Each year the bulk of those students seeking to enroll in postsecondary education submit the Free Application for Federal Student Aid (FAFSA). Today, the vast majority of FAFSAs are typically complet
It is time to commence the annual ritual, of recent years, for many postsecondary schools. That is, it is time for the annual update of institutions’ Gainful Employment (GE) Disclosure Templates, or the GEDT. The U.S. Department of Education requires all postsecondary institutions that have GE programs to disclose applicable information via the GEDT.
The 2018 GE Disclosure Template (GEDT)
ED announced the release of the 2018 GEDT on the Information for Financial Aid Professionals (IFAP) Web site via GE Electronic Announcement #110 on Friday, January 19, 2018. For a number of years, the GEDT had been made available in the
At times leaders and managers like to “go with their gut” in making decisions. This may be adequate in familiar situations and scenarios. However, once a leader or manager encounters unfamiliar territory, it is helpful to have data upon which to inform his or her decisions as to which next actions to take. This leads to a need for reliable data. It has been said that, “leaders themselves need to adopt a more rational, data-driven mindset themselves, instead of relying solely on largely irrational human instincts.”
Many may find discomfort with data as a means of making decisions. But, perhaps there are instances in which most all agree one must use applicable data—that is, when regulatory or legislative language requires knowledge of and action upon such specified data. One such example is the FY 2014 3-Year official cohort default rate (CDR
Determining when it is “time to say goodbye” to a student is often a situation that may cause angst. Various ways to maintain the individual as a student are explored. Yet, that study generates questions as a result of uncertainty in how to proceed.
There have been times when an institution has “suspended” a student from his/her enrollment in an academic program. Such a practice, whether due to academic performance, financial matters, poor attendance, disciplinary measures, or other reason, must be carefully considered. There are several points related to Title IV Federal Student Aid to ponder when deliberating the possible suspension of a student.
Do current regulations allow for the concept of a “suspension?”
We, the People…
Knowing who we are on Constitution Day, and Every Day.
A question came to mind a number of years back. “Why do I believe what I believe?” And, perhaps just as importantly, “what do I believe?” As citizens of the United States of America, we have certain rights that are foundational in our beliefs and way of life, that make us distinct from any other country in the world. In our unique system of government, our Constitution guides the federal government in matters of interstate commerce, revenue generation for limited purposes (e.g., finance a war effort if necessary), and resolution of disputes between states. These limited powers of the federal government are fundamental to our
Gainful Employment (GE) programs with their related debt-to-earnings (D/E) rates, disclosures, and alternate earnings appeals have become a frequent topic in the world of Title IV Federal Student Aid. Last week, the U.S. Department of Education (ED) provided further guidance related to GE alternate earnings appeals deadlines, and associated disclosures.
Imperative Dates Clarified
In GE Electronic Announcement #108 (GE EA #108), ED provided clarification about, and an update on, the deadlines for institutions that wish to submit an alternate earnings appeal to use institutionally gathered data to substantiate its graduates’ 2014 earnings instead of the 2014 earnings data ED obtained from the Social Security Administration (SSA) for the 2014-2
When Things Stay the Same…
The Gainful Employment Reporting Deadline Has Not Changed
This year has been a bit of a roller coaster ride as it relates to postsecondary institutions’ Gainful Employment (GE) programs. We have noticed more than once this year, that the U.S. Department of Education (ED) has granted slight reprieves for the deadlines to meet some GE requirements.
As those impacted are aware, institutions with any GE program that is in the zone or that is a failing program are allowed by law to submit an alternate earnings appeal if the use of alternate earnings would:
improve a zone program to passing, or
a failing program to either passing or zone.
Going ‘Round, and ‘Round
(or, the Latest Rendition of “Year-Round” Pell)
Those who have been around postsecondary education for the last eight years or so, likely recall the quickly implemented “year-round” provision of the Federal Pell Grant (Pell Grant) program in 2009-2010. That was the “first” edition. The original “year-round Pell” was created by the Higher Education Opportunity Act (HEOA) of 2008. It authorized schools to disburse up to two Pell Grants in a single award year to eligible Pell Grant students. The first edition of year-round Pell provided for implementation beginning in 2009-2010. Although it was short-lived due to the pr
On Again, Off Again, and On Again?… Gainful Employment Disclosure Requirements
In recent weeks and months, many institutions have worked hard to determine the best way to handle new requirements related to Gainful Employment (GE) program disclosures and, what was anticipated to be, warnings to current and prospective students. Much angst was experienced as institutions explored what the potential ramifications of such disclosures and warnings would be on admissions and current enrollment at institutions. While all of that effort and thought was not for naught, institutions do have opportunity to take another long breath of fresh air.
And, I Start the New Disclosures and Warnings, When?
Institutions that have GE programs that did not yield a passing rate for the debt-to-earnings (D/E) rates released by the U.S. Department of Education (ED) back in
On July 5, 2017, the U.S. Department of Education (ED) announced a temporary hold on 2017-2018 FWS and FSEOG drawdowns in G5. This temporary hold began at 3:00 P.M. (ET) on July 5th due to a recently discovered error in the underlying calculations of tentative and final awards for some schools.
As a result, FWS and FSEOG awards will be recalculated for all schools. The hold is expected to last no longer than 7 business days. In most cases, this recalculation will have little or no impact on final award levels. ED has indicated the average change will be less than $3,500 for FSEOG and less than $2,500 for FWS.
Pell Grant and Direct Loan funds are not impacted by this temporary G5 hold.
ED will post a subsequent Electronic Announcement to inform schools when recalculated awards are available and G5 drawdown access is restored.
The U.S. Department of Education (ED) has provided updated instruction related to the effects of sequestration that first took place effective March 1, 2013. ED gave this most recent guidance in a June 19, 2017, Electronic Announcement, based on the changes effective October 1, 2017, which is the beginning of the 2018 federal fiscal year (FY 2018). This latest update pertains only to FY 2018. This sequester announcement continues the implementation of the Budget Control Act (BCA) of 2011, also known as the sequester law. The law required across-the-board cuts in certain programs. The sequestration effects of the BCA are applicable for 10 years.
Schools are reminded that the Federal Pell Grant program is exempt from sequester. Therefore, the 2017-2018 Pell Grant Payment and Disbursement Schedules continue to be in effect. The changes required by sequestration effective October 1, 2017, are applicable to the Federal Direct Loan fees and the percentage reductions that must be made to awards offered in the Iraq-Afghanistan Service Grant and TEACH Grant Programs where the first disbursement is on or after October 1, 2017.
Some things just naturally keep your interest. One item of which most college students are acutely aware, and which attracts “interest” each year, is the interest rate that will be applicable to loans taken out for the new award year. Although federal student loans taken out after July 1, 2013, have a fixed interest rate structure, loans borrowed in each award year have a different interest rate than the prior year. The loans to be borrowed in the award year of July 1, 2017, through June 30, 2018, are no exception. And, it is of note that interest is rising.
As those keen on this topic may recall, a new method of rate determination came about as a result of the Bipartisan Student Loan Certainty Act of 2013, which overhauled the Federal Direct Student Lo
It is important to be familiar with the following verification changes and be reminded of the requirements for subsequent ISIRs and conflicting information. FAME is enhancing our financial aid software products to assist schools with these requirements and schools will be notified of any changes in product release announcements.
Beginning with 2016–2017, a student may move from Verification Tracking Group V1, V4, or V6 to group V5 based on corrections made to their CPS record or on other information available to the U.S. Department of Education. If verification was already completed for the previous group, the student is only required to verify the V5 information that was not already verified. If verification was not completed for the previous group, the student only needs to verify the V5 information. No disbursements of Title IV aid may be made until the V5 verification is satisfactorily completed. If the applicant does not complete verification, the school is not liable for any Title IV aid it disbursed prior to receiving the group V5 ISIR. The student is liable for the full amount because without verification there is no ev
Happy New Year! As if one did not know, it is the start of a new calendar year! The beginning of a new year has come to be known, for postsecondary education institutions with Gainful Employment (GE) programs, as the time for updating the U.S. Department of Education’s (ED), Gainful Employment Disclosure Template (GEDT). But, if you are waiting for the new year’s GEDT as the sign of the new year’s start, you may be a little late in realizing the new year has already begun!
Delayed Release of GE Disclosure Template
Currently, ED anticipates the release of the 2017 GE Disclosure Template in the latter part of January 2017. The template has typically been made available in the fall of each year so that schools could ensure they had their GE Disclosure Information posted and distributed by January 31 of each year following the most recently completed award year. This year, 2017, ED does not yet have the GEDT available for schools to use to update their GE Disclosure Information for the award year ending June 30, 2016. The main reason stated for the delay in availability this year is due to extensive revisions to the GEDT that ar
(Or, Uncertainty in the Face of the
Gainful Employment Debt to Earnings Rates)
It was a long time coming! But, the first calculation of the Gainful Employment (GE) draft Debt-to-Earnings (D/E) rates have arrived! Almost six years to the date after the publication of the original October 29, 2010, Program Integrity Regulations which contained the original version of GE regulations, the U.S. Department of Education (ED) recently released the long-awaited draft GE D/E rates! Without doubt, many schools opened that message in their Student Aid Internet Gateway (SAIG) mailbox with much trepidation when it arrived! So that we may assist in alleviating any apprehension, let us review the overall GE D/E rate process, including current options as well as upcoming ones.
Draft GE/DE Rates
The draft GE D/E rates were calculated by the U.S. Department of Education (ED) after allowing institutions the opportunity to review and submit corrections to the GE Completers List this past summer. The final submission of the GE Completers List was due July 28, 2016. This GE Completers List w
(see corrections in red font below)
Should Books and Supplies be Included in Tuition and Fees?
The Program Integrity Regulations issued on October 30, 2015, contain several new changes, most of which became effective on July 1, 2016. This Regulatory Bulletin is only going to cover 668.164 which addresses disbursing funds. Specifically, we will discuss the use of Federal Student Aid funds to pay for books and supplies. You may click on 34 CFR — Part 668, Subpart K – Cash Management for the actual regulations.
668.164 Disbursing funds.
(m) Provisions for books and supplies. (1) An institution must provide a way for a student who is eligible for title IV, HEA program funds to obtain or purchase, by the seventh day of a payment period, the books and supplies applicable to the payment period if, 10 days before the beginning of the payment period—
(i) The institution could disburse the title IV, HEA program
With the recent decision of the U.S. Department of Education (ED) to end its recognition of the Accrediting Council for Independent Colleges and Schools (ACICS) as a national entity approved to accredit postsecondary institutions, schools that are accredited by ACICS have to make a decision to wait out an appeal from ACICS or gain another ED-recognized accrediting agency’s approval and submit that change to ED. ACICS has 10 calendar days to inform ED of its intent to appeal and another 20 days to file the appeal. If their appeal is denied by ED, then schools have 18 months to obtain the approval of another primary accrediting agency that is recognized by ED.
A few steps will be taken by ED at this time. ED will revise the school’s Program Participation Agreement (PPA) to update its ending date to coincide with the end of the 18 months. ED will place the school on Provisional Certification or update their current Provisional Certification to amend the expiration date to also coincide with the end of the 18 month period. ED could also place additional conditions of the provisional certification such as a limitation on growth, etc.
FAME cannot help you make the decision of w
How in the world did we get started? We know and understand that we fought the Revolutionary War and created this wonderful nation of ours with the Declaration of Independence. But, how did we know how to proceed from those tumultuous beginnings of war and a brave declaration? We needed a Constitution.
But, how many really know what our Constitution is and says? How many know what the amendments to the Constitution are? True, many people talk about “first amendment rights,” or perhaps “second amendment rights.” But, who knows about the rest of the amendments? Who even knows how many there are? How many understand or remember the purpose for our Constitution, as stated in the Preamble to it?
Our nation’s Constitution has weathered 227 years, and still remains strong. As a testament to its enduring effectiveness, although it has had a few amendments (hint: more than just the first ten,
A requirement of a Title IV eligible institution is to ensure students are provided voter registration information. It seems that just as our votes are cast for one election, another election cycle is rolling full-steam ahead! It generates a feeling that it is an ongoing process. But, in reality, in many cases it is every two to four years between such elections. The sense of frequency comes from the combination of both state and federal elections. Depending upon your state, it could be either a state election for governor or state chief executive officer, or a general or special election for federal offices that is on the horizon in any particular year.
Of course, this year is a federal election for president, which has generated much commentary on all sides, as depicted in the seemingly unending political advertisements and news commentators’ diatribes and sound bites. By election
Students are in full swing applying for financial aid as they look toward beginning or resuming their postsecondary education soon. That request for financial assistance in many cases, if not most, includes applying for a Federal Direct Student Loan. These loans, known more commonly as Direct Loans (or DLs), have an interesting rate structure—pun intended.
This interest rate structure came about as a result of the Bipartisan Student Loan Certainty Act of 2013 which overhauled the Direct Loan Programs’ prior interest rate configuration. The result of that legislation is that interest rates are now determined based upon the high yield of the last auc
It is that time when millions of students are finalizing plans and preparations to attend the postsecondary institution of their choice during 2016-2017.
Each year the majority of those students submit the Free Application for Federal Student Aid (FAFSA). With more frequency, the FAFSA is typically completed as the FAFSA on the Web (FOTW). This expedites the opportunity for their FAFSA results to be processed more quickly. That is, unless they are selected for the process called “verification.”
Verification is not anything new. It is the process of making sure that the applicant for Federal Student Aid “got it right” on their FAFSA, so to speak. The whole verification concept began with its predecessor back in the 1980s. The, at the time, recently created U.S. Department of Education (ED), promulgated the idea of “validation.” That validation method had a primary concentration on the accuracy of data in applications for Federal Pell Grants. But, we must remember that correctness of data has always been a preeminent focus of the Higher Education Act (HEA) related to students’ applications. Even before validation and verification, the HEA required
Almost twenty years ago, a movie that is classified across multiple genres was released: Deep Impact. In this disaster drama, people learn of the impending impact of a comet on earth. Efforts are made to negate the potential for impact from the point of discovery of the comet and its trajectory, until the comet’s projected arrival about a year later. Suspense mounts, but there is no initial panic, because, although it would cause devastation, there was still time, and there were options to explore. While it would create a deep impact, it was not immediate. Thus, there was less alarm to the average person.
In our professional world, schools must remain vigilant, as well, to what is barreling through the financial aid skies of legislation, regulation, authorization, and guidance. One more recent
The Program Integrity Regulations issued on October 30, 2015, contains several new changes, most of which became effective on July 1, 2016. This Regulatory Bulletin is only going to cover 668.164 which addresses disbursing funds. Specifically, we will discuss the use of Federal Student Aid funds to pay for books and supplies. You may click on 34 CFR -- Part 668, Subpart K - Cash Management for the actual regulations.
668.164 Disbursing funds.
(m) Provisions for books and supplies. (1) An institution must provide a way for a student who is eligible for title IV, HEA program funds to obtain or purchase, by the seventh day of a payment period, the books and supplies applicable to the payment period if, 10 days before the beginning of the payment period—
The 2016-17 Federal Student Aid Handbook, Volume 5, The Return of Title IV Funds, pages 5-84 and 5-85 clarifies the amount of Title IV funds to include in the R2T4 calculation for clock hour and non-term credit hour programs with overlapping loan periods. This latest guidance requires the institution, when the loan period (LP) does not correspond with the payment period as defined in 34 CFR 668.4 and used in the R2T4 calculation, to prorate Title IV funds to determine the amount that should be attributed to the payment period from which the student withdrew.
The student attended School A and was disbursed a $1,750 subsidized (sub) loan and $3,000 unsubsidized (unsub) loan. The academic year at School A ends on 10/09/15.
The student starts School B on 8/24/15 in a 1200 clock-hour program with a 900 hour academic year, and is awarded the remaining $1,750 sub and $3,000 unsub for the 1st short LP of 8/24/15-10/09/15 due to completing the academic year at School A.
The 2nd loan is processed for a 900 hour academic year with a LP of 10/10/15 – 3/11/16 for a $1,750 sub loan and a $3,000 unsub loan.
Title IV payment period 1 is
Based on additional recent guidance from the U. S. Department of Education (ED), we would like to share the following information. This guidance may impact the credits that you submit on your E-APP from the clock to credit conversion that ultimately appear on your ECAR.
When a school does a clock-to-credit hour conversion and the financial aid credit hour calculation for an individual course equals a fraction (e.g., 3.25), the school may use the actual fraction to determine the total number of financial aid (FA) credits in the program rather than rounding to the nearest 1 or .5 as some accrediting agencies require. However, the school may not round up the fraction (example: 3.255 can be 3.255 or 3.25, but not 3.26). This is for the calculation of FA credits only. Note: The school may not use the FA credits if they are more than the academic credits per individual course or program.
Example: Medical Assistant Program (quarter credits)
The U.S. Department of Education (ED) will soon be distributing institutions’ Draft “GE Completers Lists” to the institutionally designated Student Aid Internet Gateway (SAIG) mailbox, if an institution had one or more GE Programs with program completers in award years 2010-2011 and 2011-2012.
The GE Completers List is used by ED in calculating an institution’s Debt-to-Earnings (D/E) rates using the debt and earnings of students who completed Gainful Employment (GE) programs. Once ED distributes the Draft “GE Completers’ List,” schools will have 45 days to submit any necessary corrections.
ED has strongly encouraged that schools should, no later than May 13, 2016, report to NSLDS any missing GE Program information and make any necessary corrections to information previously reported. Making any necessary corrections to data now will help to ensure that the Draft “GE Completers Lists” ED sends to the school are accurate and complete. ED “currently” anticipates creating and releasing the Draft GE Completers Lists to schools by June 1, 2016.
Schools that have not yet done so should review the data that ED has post
Attendance Monitoring and Charges for Absences or Being Tardy
FAME recently completed its 2016 FAME Annual Financial Aid and Management Conference. A question arose shortly before the conference for which guidance had been received from the U.S. Department of Education (ED) related to the appropriate response.
The Question about Fees or Fines for Absences or Being Tardy
A question arose inquiring whether a school could assess fees or fines to a student for being late to class or for being absent from class, and have Title IV funds cover those fines or fees. In our dialog with the U.S. Department of Education (ED), their initial response was that fees or fines a school assesses a student that are not required of all students in the program, would be considered non-institutional charges, and therefore, not included in a Return to Title IV Funds (R2T4) calculation, similar to library fines or parking fines, etc. As with library or parking fines, ED indicated that, with the appropriate written student authorization, Title IV funds could be utilized to pay such charges as a fine or fee for being t
Q1: What is the cost of attendance (COA) for student financial aid purposes?
A1: The COA is an estimate of the expenses a student may be expected to incur in an award year while pursuing their academic program. It is the underpinning upon which the process of financial aid need determination begins for a student. The COA includes both the direct and indirect costs of attending school. The direct costs are those charged directly by the school, such as tuition and fees. The indirect costs are the other basic necessary expenses a student experiences in order to attend and complete his or her education.
Q2: Why does the COA budget have to include things other than the costs for tuition, fees, books and supplies?
A2: The quick answer is that the components of the COA are dictated in the Higher Education Act (HEA), as amended. The answer in more practical terms, upon which the HEA dictates are based, is that most students would not be able to attend school if the only aid they received was to cover direct tuition and fee costs. In many instances a student is not able to work, or not as many hours, while
Prohibited! That has been the word on the streets about incentive compensation offered by postsecondary educational institutions. More specifically, the October 29, 2010, Program Integrity Regulations made this prohibition applicable to individuals involved in the recruitment or admission of students, as well as those involved in making decisions about student financial aid. These regulations related to incentive compensation were generally effective July 1, 2011. But, was the ban on incentive compensation for recruiters all encompassing? What is the latest from ED on the matter?
When the October 29, 2010, regulations were finalized, it was not long before a legal challenge to the incentive compensation section of the rules was presented.
Periodically we are asked questions regarding an interpretation of the laws, regulations, or policies related to the administration of the Title IV Federal Student Aid (FSA) Programs. In this series we provide questions, and the related answers, generated by our interaction with clients and the U.S. Department of Education (ED).
Q1: We are a school that teaches in quarters. The program has three 10-week terms in the program with new students starting each term. Can we also have a version of the program that has a 5-week term, two 10-week terms, and a 5-week term on every other “start?”
A1: The latest guidance from ED indicates that schools have the ability to create different versions of a program with different calendars (even if both are in the day). But, the school really needs to treat these programs as two separate programs (e.g., in regard to coding, cohorts, no crossing over between programs, consumer information, and if a student switches programs they must be dropped and re-enrolled, etc.). Every student within a particular program would follow the same academic calendar; otherwise, you would have one program taught in differ
The Program Integrity Q&A Website has been recently updated in response to questions about acceptable documentation for foreign high school diplomas. As the New Year begins, we remind you to review your current policies and procedures and make adjustments as needed. The following are the two questions with answers as posted by the Office of Postsecondary Education in regards to foreign high school diplomas (http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/hsdiploma.html#fhd).
Foreign High School Diploma (FHD)
FHD-Q1. Is a high school diploma from a foreign country recognized as a valid diploma?
FHD-A1. Yes, if the institution determines whether the foreign secondary school credentials are evidence of completing the equivalent of a secondary education in the United States. Institutions that do not have the expertise to make that determination themselves may use a foreign diploma evaluation service. [Guidance issued 1/24/2014]
FHD-Q2. What documentation may an institution accept to verify high school completion status for an applicant who indicates that he or
Action: All currently participating schools with GE programs must submit to ED by no later than December 31, 2015, a Transitional Certification of their GE Programs’ accreditation approval and State approval. See the June 11, 2015 Electronic Announcement for details.
Action: All schools must have their GE disclosure information updated utilizing 2014-2015 data by January 31, 2016. Schools must use the updated GE disclosure template (GEDT). This template can be located online at http://ope.ed.gov/GainfulEmployment/.
Action: IRS requires that you have all 1098-T generated and postmarked by January 31, 2016.
Action: Waiver Request for Underuse of 2016-2017 Funds to ED are due by February 8th, 2016.
Action: Collection opens for Winter IPEDS December 9, 2015 and will be closed for Keyholders February 10, 2016 and for Coordinators February 24, 2016. The components included in this submission are: Student Financial Aid; Graduation Rates; 200% Graduation Rates, Admission; and Outcome Measures. The preliminary data will be available Mid-September.
It goes without saying that most institutions of higher education in the United States today rely significantly on the ability of their students to receive funding through the U.S. Department of Education’s (ED) Federal Student Aid programs. These Federal Student Aid (FSA) programs are authorized through the section of law commonly referred to as Title IV of the Higher Education Act (HEA), as amended. But, these institutions are not granted, via their students’ eligibility, such resources carte blanche. As the old saying goes, “He who has the gold makes the rules.” Not surprisingly, ED requires institutions to exercise care in their fiduciary responsibilities of the more than $128 billion dollars being dispensed to almost 12 million students.
Time stands still for no one! It seems as though reporting of gainful employment (GE) data to the U.S. Department of Education (ED) was just completed—with hopes that everything was reported accurately. And, here we are again, talking about GE! All of that information that you have worked with in the last few months since the first “new” GE reporting in July, now comes into play again. With that being the case, it is no time to let one’s guard down. Rather it is time to ensure you have gained the upper hand on the upcoming GE requirements. There are at least three key items to keep in mind in the coming months regarding GE.
GE Transitional Certifications Due By December 31, 2015
This topic has been discussed in various venues since the advent of “GE 2.0.” But, part of the regulatory requirements pertaining to GE is that schools must ensure they have certified that all of their Title IV-eligible gainful employme
When students are interested in attending school, naturally they look for one that offers academic programs that prepare them for their career ambitions. But, once they have found one that offers the academic program they are interested in, there is always a question that soon follows. That question is: “How much does it cost?” The answer given in response to that question may, at times, be less than clear. (Effective as of January 1, 2016, more specificity will be required in data provided by FAME clients. Continue reading for more details.)
Naturally, a student is interested in the direct costs applicable to the educational program; things such as tuition, required fees, typical amounts charged for required textbooks, and so on. But, the reality is that the various costs a student incurs as they attend school include a broader scope of expenses than just those charged by the institution directly. In order for a student to at
The U.S. Department of Education (ED) is distributing email notifications to schools that may be non-compliant with GE Reporting. The letters have indicated severe consequences such as suspending recertification, approval of new programs or additional locations applications, and initiating an administrative action against the institution. Such administrative action may include fines, limitations, suspension or termination of eligibility to participate in the Title IV, HEA programs.
Institutions must report student details or the acceptable reason why reporting is not required for every program included on the NSLDS GE Program Tracker List for each award year. It is important that all students who received Title IV aid for a program have been reported and that the information is complete and accurate. If an acceptable reason for not reporting student data has been indicated, then you must be able to document why reporting was not required.
To confirm if your institution is in compliance, you can review the NSLD
The long and winding road has ended on 9/30/15. This was the end of a one year extension for the Federal Perkins Loan Program. According to the latest guidance received from the U. S. Department of Education (ED) (Electronic Announcement dated 10/2/15) Congress did not extend the Federal Perkins Loan Program. As a result schools can longer originate Perkins loans to new borrowers after 9/30/15. However, there are some exceptions to the rule as indicated in Dear Colleague Letter GEN-15-03.
If a school makes a first disbursement of a Perkins loan for the 2015-2016 award year prior to 10/1/15, the school can make any remaining disbursements for that 2015-2016 loan after 9/30/15.
There is also a “grandfathering” provision for 2014-2015 or earlier Perkins loans as long as all of the following conditions are met:
One Perkins loan disbursement has to have been made to a student on or before 6/30/15.
The student is enrolled at the same institution where the last Perkins loan disbursement was received.
The student i
Our early days as a nation endured a bumpy start. As the original states were floundering in the New World, the need to live up to the name, “United States of America,” was beginning to become evident. There was a need for unity. Each of the states had their own interests they wanted to satisfy, but the confederation of independent states, established as a “league of friendship,” was not organized to fully meet those needs. The Articles of Confederation, adopted in 1781, lacked in the areas of authority and ability to govern the states in matters of commerce, issues of revenue, and resolution of disputes between states. Those “simple” matters—interstate commerce, ab
The passage of The Consolidated and Further Continuing Appropriations Act of 2015 (Pub. L. 113-235) reinstituted the opportunity for a student’s Title IV eligibility through ability to benefit (ATB) alternatives. But, this ATB alternative opportunity is only available if such a student is enrolled in an "eligible career pathway program." The U.S. Department of Education (ED) has provided some guidance in regard to eligible career pathway programs in Dear Colleague Letter GEN-15-09, but it has been quite limited in scope. As such, numerous clients have inquired about what they consider to be an eligible career pathway programs (CPP). We appreciate our clients' interest in the perceived opportunity they anticipate to be available via the CPPs. Yet, the legislation allowing for CPPs is not as broad as would be hoped. And, there has been limited and,
Sailing on the ocean is a wonderful thing. There is the vast expanse of the horizon that is in view, and the gentle rocking of the waves that calm the soul. But, it is a totally different picture when a major weather event comes on scene. No longer is the view as expansive or the waves as gentle. Clouds block the horizon and the surface gets rough and unsettling. That is the way it sometimes happens in financial aid. Things are going smoothly as you think you have all things appropriately in view. You have completed the first round of gainful employment (GE) reporting, and you are enjoying the gentle scene until the next round of reporting is due. Then, all of a sudden, another GE gale arrives and you wonder if you will be sailing on the Sea of Confusion or Consternation instead of the Sea of Clarity and Calm. Just when you thought you had it all figured out and put to rest for a while…GE comes to the fore once more!
The latest GE information presented by the U.S. Department of Education (ED) appeared as Gainful Employment Announcement #58 on
They said it would happen. And, it is almost here! The deadline for the first round of Gainful Employment (GE) reporting is July 31, 2015, based upon the requirements of the October 31, 2014, final regulations. This is a date you do not want to miss!
URGENCY and CONSEQUENCES STRESSED
FAME staff attended a recent conference at which U.S. Department of Education (ED) staff spoke on the topic of GE reporting. It was clearly stated that schools must have completed their GE reporting by July 31, 2015. Failure to do so will have consequences. Two things will happen if a school misses the July 31, 2015, reporting deadline.
ED will send a letter by e-mail to the president of each institution that has GE programs. The letter will list each of the GE programs for which the institution did not report in a timely manner. These le
Swimming in murky waters is generally not what one likes to experience. Much preferred for swimming is the crystal clear water in a newly cleaned pool, a mountain spring-fed lake, or in the waters near a coral reef off a south Pacific island. Murky waters leave much to the imagination as to what may be just beneath the surface, with none too pleasant outcomes envisioned. Recent news accounts of several shark attacks in shallow waters near the beaches have accentuated the need to be able to see what is in the water around you. In similar fashion, murkiness seems to be the environment in which schools find themselves when viewing the latest guidance related to the State authorization regulations.
The Murky Waters of State Authorization
State authorization has been a requirement for schools to be considered eligible to participate in Title IV Federal Student Aid programs for years. But, in 2010, in what has come to be called the Program Integrity Regulations of October 29, 20101, the U.S. Department of Education (ED) gave more specificity to what the minimum standards consis
The news reports are out1. The US Internal Revenue Service (IRS) was hacked! This is of specific interest to schools participating in the Title IV Federal Student Aid (FSA) programs. Students and parents who apply for FSA and are selected for “verification” in the application process have potential for being directly impacted due to the hack of the IRS system.
The IRS announced2 on Tuesday, May 26, 2015, that its Get Transcript Web site was hacked between February and mid-May of 2015. It is important to note, however, that the IRS’ main database system was not accessed. Only the Get Transcript system, which is operated separately from the main IRS computer system, was compromised in this attack. The hackers were successful in approximately 100,000 of 200,000 attempts at gaining unauthorized access. The IRS has indicated that it is notifying those tax filers whose information was hacked.
The response to the one word question in the title of this article resounds with a definite, “Yes!” That is especially the response for student loan borrowers this coming award year. The much anticipated announcement of the new interest rates for loans first disbursed on or after July 1, 2015, has been made. And, the notice is favorable for borrowers who will be obtaining one of the loans available through the Federal Direct Student Loan Programs. Interest rates have nudged downward!
As a reminder, the Bipartisan Student Loan Certainty Act of 2013 overhauled the Direct Loan Programs’ interest rate structure. The result of that legislation is that interest rates are now determined based upon the high yield of the last auction of the 10-year Treasury notes held prior to June 1 each year. That yield becomes the “index” in the interest rate formula. To the index is added a margin, or what is called an “add on”. The rat
Those in the world of financial aid are always wondering what our friendly Fed had to say. So, we are going to tell you about what the Fed SAID. OK. Yes, the title of this Regulatory Bulletin is a bit of a play on words and acronyms. But, it is to focus on the importance of what the Feds (i.e., the US Department of Education or, ED) have said is occurring as of May 10, 2015. That is, the long-time use of the Federal Student Aid PIN is going by the wayside, just like those old car headlight dimmer switches you have seen pictures of on one of those Facebook, “who remembers what this is?” postings. But, the FSA PIN was a necessity for students applying for Federal Student Aid (FSA)! What happens to that process now? As of Sunday, May 10, 2015, all students who wish to use login access for Federal Student Aid Web sites will need to utilize a new Federal Student Aid ID or, as it will be known in shorthand: FSA ID.
The change to
PLUS Loans have been in the news in the last few years. Specifically, the topic of interest has been the impact of an adverse credit history on PLUS Loan applicants. For nearly twenty years, the PLUS Loan program had no noteworthy issues. However, in 2011 the U.S. Department of Education (ED) modified the criteria to include unpaid collection accounts and charge-offs in their review of PLUS applicants’ credit history. This was to be more closely in agreement with then current regulations. This change was not officially announced before implementation, but rather felt by applicants and schools. Since that time, after much public opinion was expressed, and some intermediary proactive notifications by ED to applicants who may gain eligibility after a credit history reconsideration, a slow move to change the regulations related to adverse credit meandered through the regulatory process. The Federal Direct PLUS Loan final regulations were published on October 23, 2014.
The final regulations were scheduled to be operational as of July 1, 2015. But, ED stated in the preamble to the rules that it may implement a
As spring has just begun, there are a number of upcoming dates to keep in mind. In this Regulatory Bulletin reminder, we provide a brief list of important events and dates that schools need to have on their calendar. It is important to plan your schedule of activities accordingly.
March 29, 2015 – The new PLUS Loan regulations regarding adverse credit standards go into effect. These regulations were published in the Federal Register on October 23, 2014 and posted on IFAP. The published effective date for the regulations was July 1, 2015. However, in a Federal Register notice on January 14, 2015, ED announced that the regulations would be implemented on March 29, 2015. An Electronic Announcement was posted on IFAP on January 27, 2015 emphasizing this date change. Schools must implement the new regulatory standards pertaining to adverse credi
We all likely know people who insist upon being the one who is right. While such individuals may come across as a bit difficult to interact with, the reality is that we all do want to be right. And, in our work-a-day world, it is important that we get it right in the critical areas of our profession. We work in a $150 billion dollar industry as financial aid professionals,1 so there is ample need for not missing the mark in operational accuracy and effectiveness. In this intermittent series on getting it right, we are highlighting some of the key areas in which it is critical to employ best practices in order to accomplish this goal. The components covered in this series are: the right people, the right service, and the right exposure. In this segment of our series we will highl
The statement in the title of this edition of the Regulatory Bulletin is often attributed to the fictional character of Sherlock Holmes of Sir Arthur Conan Doyle’s famous works. However, that exact phrase never appeared in his works. Nevertheless, it has become associated with the character of Sherlock Holmes who was known for his amazing detective skills, enhanced by his deductive reasoning capabilities. With the ongoing popularity of the character of Holmes, as evidenced by a current television program based upon the original works’ premise, there is an apparent interest in the concept of applying detective skills. In the world of financial aid, it is not uncommon that financial aid directors are charged with the responsibility to play detective. Now is one of those times. It is time to pull out the magnifying glass (or other symbolic tools of the trade) and begin investigating the details of your newly released draft Cohort Default Rates (CDR). Yes, close inspection of the underlying data in this most recent draft 3-year CDR—the FY 2012 edition—is critical. The accuracy of data in this draft rate is important to your institution’s continued parti
Recently, we began a series on getting it right. We talked about the potential impact on operations and effectiveness when we miss the mark in our work environment. In the $150 billion dollar world of financial aid administration1, the effect of not getting it right may cripple an institution. There are at least three components in getting it right: the right people, the right service, and the right exposure. The concept of getting it right is often referred to as employing best practices. In this segment of our series we will highlight getting it right in regard to the people in the organization.
Schools that participate in the Title IV Federal Student Aid programs are aware of the regulatory requirement in
We humans have a common trait among us. We do not like to be wrong, or even to be perceived as being wrong. Students in school—whether in elementary school or at postsecondary levels—frequently do not want to answer questions in class due to a fear of answering incorrectly, not getting it right, and being perceived as the class dunce. Likewise, in our professions we also have that fear of not “getting it right,” not knowing the right information, or making mistakes. So, in wisdom we seek guidance on how we should do things. In fact, a term has been developed over the years that indicate a professional’s desire to know the answer on pertinent topics and to ensure that he or she is performing at expected standards. The descriptor that has developed is “best practices.” In the realm of financial aid we also hear of best practices. The National Association of Student Financial Aid Administrators (NASFAA) at one time conducted an
It slips the memory at the moment as to where and when, but as a child growing up this writer heard that terminology used to describe an individual. As the adults were talking they said, “He is a boy of strong constitution.” The word was new in my vocabulary, or at least as used in that context. But, the meaning was immediately understood. They were referring to the individual’s health, stamina, and demeanor. But, more importantly, their words spoke of his character. By use of that phrase they were actually speaking to the very make-up or nature of the individual, his overall being, and what made him who he was. Some things the boy could change, such as his attire, his favorite flavor of ice cream, or perhaps his hobbies. But, who he was—his inmost character—no, that would not change. He had a recognizably strong constitution.
Our nation, the United States of America, has a strong Constitution. The Constitution has weathered 227 years, but remains strong. It
For those who subscribe to Maslow’s Hierarchy of Needs, the need for safety and security is foundational, just after the basic physiological needs of air, water, food, shelter, etc. As humans, with or without Maslow’s chart, it is a given that we place a strong emphasis on safety and security. This is evidenced in our society partly by the laws we enact. Even the higher education community has legislation for which it is responsible that is related to individuals’ safety and security needs. Those in the postsecondary education arena know well what that means, especially at this season of the year. It is once again time for the 2014 edition of the annual Campus Safety and Security Survey, which the U.S. Department of Education (ED) so graciously provides. But, before we delve into the requirements and time frame for completing the survey, let us explore some concepts and terminolo
The fact that change occurs has been our topic for the past three weeks. Change happens and it presents in many areas that have practical implications. Thus far, we have discussed the reality that change may bring positive results. Other changes on campuses for which we have addressed points for consideration include changes in key personnel and changes in ownership or control of an institution. In this edition of the Regulatory Bulletin we consider another change which we observe a greater preponderance of today than in the past. That situation is when a school either changes locations or adds a new location. It is almost like multi-Grammy Award winner Michael W. Smith singing that he is trying to “find my place in this world”; or perhaps a similar sentiment expressed by more recent Grammy winner, Taylor Swift, as she sang she was
Change can create a loss of control. But, conversely, change brings new control. Otherwise, change would result only in chaos. Our discussion last week included important considerations when there was a change in personnel in a key role at a school, i.e., the director of financial aid. This week’s focus is on another frequent occurrence of change in some segments of higher education. That situation is when there is a change of control of an institution. Some involved in such a change may, depending upon their era growing up, believe they are like Frank Sinatra and want to “have it my way.” Or, for those in more recent years, they may see such change as expressed by Janet Jackson when she sang, “I wanna be the one in control.” Yes, changes in institutional control or ownership may have some of that thought process behind the reasons for the change, but we will leave that f
Change does happen. We talked last week about what some of the impacts of change may be, along with how to see change as an opportunity. This week we continue with the same topic, but look specifically at one of the common changes that occur in the financial aid world. Hank Williams sang, “You’re gonna change, or I’m gonna leave.” That may be what a financial aid director is saying to his boss! Or, it may be that the boss slightly modified the song to sing to the financial aid director, “you’re gonna change, and you’re gonna leave!” Either way, whether the financial aid director makes an abrupt decision to change jobs, or the boss helps her make the decision, it is not an infrequent occurrence to see a change in who fills the role of financial aid director. What is the impact when there is a switch in the person in this role?
We hear much about “change” from such great authors as Spencer Johnson in Who Moved My Cheese? and Stephen Covey in 7 Habits of Highly Effective People, among many others. As we know, change is a constant factor in financial aid—from ongoing changes in legislation, regulation, and policy changes on a federal or state level, to changes in key staffing roles and perhaps, even institutional direction. In such conditions, how does one maintain and even enhance excellence in the financial aid environment? Let us consider the topic of “change” and some common changes in the financial aid arena in a short series. This week we will address general concepts of change and implications of such. In the following weeks, we will look more specifically at some of the familiar changes that schools encounter that impact financial aid. Specifically, we will address consideration
The U.S, Department of Education announced on July 18, 2014 that close to 200,000 Institutional Student Information Records (ISIRs) will be reprocessed the evening of Monday, July 21, 2014. The cause for the reprocessing is due to the fact that at least that many applicants for Federal Student Aid (FSA) incorrectly entered data on their Free Application for Federal Student Aid (FAFSA) when completing the FAFSA-on-the-Web. The errors have the potential to significantly impact those students’ eligibility for aid such as the Federal Pell Grant, as well as other types of FSA programs such as Federal Direct Subsidized Student Loans (Direct Loans) and Federal Supplemental Educational Opportunity Grants (FSEOG), etc.
The ISIR Issue
The issue arises from applicants that incorrectly entered income earned from work and adjusted gross income (AGI) figures with a decimal point. The instructions for completing those f
The world of financial aid stays interesting…all year round! Just as you are working on awards for 2014-2015 for students about to start this new award year, you have to switch gears in your thinking—in two directions. It is now time to start thinking ahead to 2015-2016 if your institution is interested in participating in any of the Campus-Based programs of the Title IV Federal Student Aid Programs. That is, if you desire your institution’s participation in any one or more of the Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), or Federal Perkins Loan (Perkins) programs in the 2015-2016 award year, it is time to begin preparation for, and completion of, the Fiscal Operations Report for 2013-2014 and Application to Participate for 2015-2016 (FISAP). [Note: Based upon current funding authorization by Congress, no new Perkins Loan program participants will be authorized in 2015-2016 since no new Federal Capital Contribution (FCC) will be allocated in the Perkins Loan program. Schools with current Perkins Loan funds may continue to request Levels of Expenditure for 2015-2016.] As the name of the FISAP indicates, it is also time t
Subsidy on Federal Direct Subsidized Loans in Grace Period Returns
and Updated Addendum to Entrance Counseling Guide for Direct Loan Borrowers
Where does time go? It seems like only yesterday we were talking about the nation’s Federal Fiscal Year 2012 (FY 2012) budget. But, it was December 23, 2011, that President Obama signed into law the Consolidated Appropriations Act, 2012 (Public Law 112-74). That legislation had significant impact on the Title IV Federal Student Aid Programs. Most of the changes made by that law have become routine in our understanding and day-to-day operations. However, there was one provision in the law that had a specific limitation to it. That limited provision was regarding interest subsidy on Federal Direct Subsidized Loans during a borrower’s grace period.
Grace Period Interest Subsidy Resumes
In the Consolidated Appropriations Act, 2012, the law directed that interest subsidy on Subsidized Direct Loans during the borrower’s grace period would
There is a bit of mystery in the concept of codes. Codes are thought of, many times, as a way to talk or communicate in a unique way such that only the informed can understand. And, the code may be used to disguise secret or classified information. But, codes may also be seen as a way that would seem to simplify a larger concept. A case in point: Zip codes are used by the U.S. Postal Service to represent a geographic location that otherwise would have to be spelled out in great length. For example, Kleinfeltersville, Pennsylvania—which is one of the longest non-hyphenated single word city names in the United States—would be quite the chore to write regularly in the postal distribution process. So, the use of its assigned Zip code of “17039” works quite handily in the Postal Service’s processing of mail addressed to folks there. Likewise, in our field of postsecondary education, we like to expedite things by the use of codes and acr
It is the iconic symbol of an official meeting’s action. When the gavel comes down, it is done. In the case of a proposed law in the United States, a legislative bill’s passage is affirmed by the gavel’s strike. The bill then awaits the stroke of a pen, the historic presidential pen. Likewise, the regulatory process implements changes. These changes are also brought to life by the stroke of a pen, the Secretary’s pen. For our purposes, it is the signature of the Secretary of the U.S. Department of Education (ED) that brings life to much discussed language as prescriptive rules.
The recent legislative and regulatory changes of interest today are those related to NSLDS Enrollment Reporting. Formerly, the information now included in NSLDS Enrollment Reporting was called the Student Status Confirmation Report (SSCR). That prior nomenclature had been around for decades. But, with the shift of enrollment reporting to being accomp
It seems that it is almost an annual occurrence. It is either a state or federal election that is on the horizon. And, with an election in view come the seemingly unending political advertisements. Most would probably agree that by election time, one has seen and heard more than enough of what seems to have become endless diatribes rather than civil and intelligent discourse on issues. But, regardless, such an event highlights the privilege and responsibility of citizens to exercise their vote. In preparation for doing so, naturally, eligible citizens should ensure they are not only cognizant of the issues and candidates on the ballot, but also are appropriately registered to vote.
Responsibility for Schools
Interestingly, postsecondary schools that participate in the Title IV Federal Student Aid programs are required to make a good faith effort to distribute vo
Just charge it! That sounds like a theme from a credit card commercial. But, the reality is that for a good number of schools that is what they do. They charge it to the students—their program costs that is. It is not uncommon for schools in the technical and career training sectors of higher education to charge students the full program costs up front as they begin the program. Said differently, the charges assessed at enrollment are for the entire length of the program. This has several implications when doing so. Naturally, it gives a boost to the school’s accounts receivables. And, depending upon the school’s institutional refund policy, it could have some advantages in funds being able to be retained if a student does withdraw. It also may make it simpler to determine the appropriate “program” costs when completing the Net Price Calcu
May 27, 2014
Ms. Ashley HigginsU.S. Department of Education1990 K Street, NWRoom 8037Washington, DC20006-8502
DOCKET ID: ED-2014-OPE-0039
34 CFR Parts 600 and 668
Program Integrity: Gainful Employment; Proposed Rule (dated March 25, 2014)
Dear Ms. Higgins:
On behalf of FAME, and the hundreds of institutions we serve, and the thousands of students they serve, we submit the following items for the Department of Education’s consideration in regard to the above identified Notice of Proposed Rules (NPRM) published in the Federal Register on March 25, 2014.
FAME is dedicated to meeting the diverse needs of postsecondary educational institutions. From its inception in September of 1978, FAME has provided service excellence to institutions participating in federal financial aid programs and for those seeking quality, affordable Student Information Systems. FAME has a long history in providing comprehensive, high quality, cost effective Student Information Systems and efficient, accurate fin
This time of year is always interesting! (Yes, that is a bit of a play on words.) In the world of financial aid, this time of year is when schools and students anxiously await the announcement of what the new interest rates will be on Federal Direct Student Loans. As you may recall, last year the Bipartisan Student Loan Certainty Act of 2013 was signed into law. The focus of this legislation was to overhaul the Federal Direct Student Loan Programs’ interest rate structure. With this new law, interest rates are determined based upon the high yield of the last auction of the 10-year Treasury notes held prior to June 1 each year, plus a margin, or what is called an “add on”. The change in the law set the rates for the Subsidized and Unsubsidized Direct Loans to undergraduate students at equal rates. Also, the law established the interest for Direct Unsubsidized Loans for graduate/pro
Students of journalism become very familiar with the “who what, when, where, why, and how” questions of fact gathering. These five questions are sometimes called the “Five Ws and one H”, or more simply, the “Five Ws”. These basic investigative questions are utilized to get to the crux of a matter being considered. The origin of such method for inquiry dates back to the ancient Greeks (e.g., Hermagoras and Cicero), although it was revitalized in more recent times by Rudyard Kipling in his writings, and specifically in “The Elephant’s Child”. So, what does this have to do with financial aid?
Financial aid can, in many situations, be viewed as a prime opportunity for utilizing the Five Ws. One specific case in point is the recent guidance offered by the U.S. Depart
In modern technology parlance, the Violence Against Women Reauthorization Act (VAWA) of 2013 (Pub. Law 113-4) would be called VAWA.2013. This edition of VAWA is the fourth “version” of the law which was originally signed into existence on September 13, 1994. Subsequent reauthorizations occurred on October 28, 2000 and January 5, 2006. This latest version, VAWA.2013, was signed into law on March 7, 2013.
The New Version Specifications
Yes, one year ago, VAWA was reauthorized. The newest version of this important legislation brought with it various new reporting requirements for postsecondary institutions that participate in the Title IV Federal Student Aid programs. These new requirements were accomplished by VAWA’s amending the Clery Act portion of the Higher Education Act (HEA) of 1965, as amended.
The specifics of the law that affect reporting requirements include stipulations that institutions compile statistics for certain crimes that are reported to campus security authorities or local police agencies. The newly added crimes for which institutions must now gather dat
It is that time of year again! It is time to brush off those dancing shoes and refresh your steps so you do not miss a beat as you waltz through the draft Cohort Default Rates (CDR) review. Yes, the dance is recommended to be more of a waltz than a salsa as the review of the draft CDR is important to your institution’s continued participation in Title IV Federal Student Aid programs. Thus, it is necessary to take it steady and slow as you move through the annual review.
New FY 2011 Draft 3-Year CDR
The U. S. Department of Education (ED) announced the release of the new FY 2011 3-year draft CDR in an Electronic Announcement on February 18, 2014. This is the first year in which there is only a 3-year draft CDR bein
It is a routine question asked of students: “When will my loans be disbursed?” Likewise, the Business Office regularly inquires of the Financial Aid Office: “When do we expect Ima Student’s loans to be disbursed?” Well, that is a good question! One response heard across the country is the old standby, “It depends….” That response can be apropos at times, for example when the Financial Aid Office is waiting on a student to turn forms in to complete his or her file. But, more specifically, there is a definite point in time when the students’ loans are disbursed. This precise definition of “disbursement date” at times may be misunderstood. To clarify the explicit meaning of the term, the U.S. Department of Education (ED) recently disseminated an Electronic Announcement to schools to remind everyone what “disbursement date” truly means, especially as it applies to Federal Direct Loans.
The fact that ED distributed this reminder would indicate that they note schools are having issues in utilizing the correct disbursement date, especially for Direct Loans. What is the “disbursement date”? The disbursement for Direct Loans occu
Each year schools are required by law to update the information used in their Net Price Calculator (NPC). The U.S. Department of Education (ED) provides an updated template annually. ED’s plan is that it will usually be available in January each year for the most recently completed award year. As an example, this year ED has released the updated template on January 27, 2014 for updating a school’s NPC utilizing data from the 2012-2013 award year. (The 2012-2013 award year is the most recently completed award year prior to the release of the updated template). This year’s updated template was released in the January 27, 2014 Electronic Announcement.
The purpose of the NPC is to assist interested parties such as prospective students and their parents in understanding the estimated “net price” of attendance at the school before they actually enroll. It also serves as a tool in comparing the net price of any number of schools before finally deciding which school they desire to attend. Any school that enrolls full-time undergraduate students in a degree or certificat
If a school did not use all of its 2012-2013 Title IV Campus-Based programs' federal allocations, and that amount not used exceeds 10% of its federal allocation, a school has until February 7, 2014 to submit a request for a waiver of the penalty for not using all of the allocation. If an acceptable request for waiver of the penalty is not submitted by that date, the institution’s Campus-Based federal allocations for 2014-2015 will be reduced by the amount not utilized in 2012-2013. A waiver may be granted only if the school is able to explain that the underuse was due to circumstances beyond its control and why those circumstances are not expected to recur.
A school can tell if they may be subject to the underuse penalty by reviewing its most recent Fiscal Operations Report for 2012-2013 and the Application to Participate for 2014-2015 (FISAP). A school may also tell if they are potentially subject to the penalty by reviewing their Campus-Based Tentative Funding Worksheet for 2014-2015. [The Campus-Based Tentative Funding Worksheets for 2014-2015 are scheduled to be posted to the eCampus-Based (eCB) Web site not later than Ja
Now that the U.S. Department of Education (ED) has come out with its Gainful Employment Disclosure Template (GEDT) in the November 22, 2013 GE Electronic Announcement #46, many have experienced confusion as to what is required.
First, and foremost, it is important to understand the difference between GE disclosure requirements and GE reporting requirements. As schools will recall, there was much legal battling that occurred over the October 29, 2010 Gainful Employment regulations and related guidance. The 2012 Court decisions “vacated”, or invalidated, the section of the regulations that required schools to “report” GE data. Specifically, schools do not have to report the information that was previously required the one time back in November 2011 (which included the reporting of several prior years’ data all at once). As stated in the GE Electronic Announcement #39 on July 6, 2012, “…the Court’s decision vacated the gainful employment reporting requirements in 34 CFR 668.6(a). Therefore, institutions are not required to submit gainf
The long-anticipated Gainful Employment (GE) disclosures template has finally been released by the U.S. Department of Education (ED). This template was a requirement of the historic Program Integrity regulations of October 29, 2010. As schools are aware, there was much legal battle over the concept of the GE regulations. However, the Court’s decision resulted in the GE disclosures requirement being upheld. Therefore, schools have been responsible for providing the stipulated disclosures related to GE programs at their institution. Heretofore, in the absence of the ED-developed template, schools were obligated to determine the best means of collecting and, within certain parameters, disseminating the disclosure information.
With the release of ED’s template for GE disclosures on November 22, 2013, schools are now mandated to utilize this tool. The deadline for disclosing information for the 2012-2013 award year is January 31, 2014.
The template was made public in the Gainful Employment Electronic Announcement #46. As instructed in the announcement, schools may access the template at the URL given for the 2009-2010 Negotiated Rulemaking Web page. (The URL for direct access
The United States Department of Education (ED) provided clarification on October 23, 2013 as to what constitutes acceptable documentation regarding IRS Tax Return Transcript requirements for the remainder of 2013-2014. In the announcement, ED specifies further situations when a paper Federal tax return may be accepted for verification purposes. Previously, financial aid administrators were informed that there were limited circumstances in which a signed copy of a paper tax return may be accepted. The most common of those restricted scenarios included cases where a tax filer had experienced identity theft, filed an amended tax return, or filed a foreign tax return. ED now expands the situations in which a signed copy of a paper tax return may be accepted to include situations in which a tax filer requested an IRS Tax Return Transcript using the IRS paper or online methods for requesting the tax transcript but was unsuccessful in obtaining it. However, the signed copy of the paper tax return alone is not sufficient.
First, to be considered acceptable alternative documentation for verification purposes, the signed paper cop
The U.S. Department of Education (ED) has re-emphasized the requirement that schools which participate in the William D. Ford Direct Loan Program are required to have a quality assurance process in place. While this is a regulatory requirement specified in 34 CFR 685.300(b)(9), a school would be hard-pressed to find any information about it elsewhere on the “Information for Financial Aid Professionals” (IFAP) Web page at www.ifap.ed.gov. Thus, it is quite understandable that questions may have been raised when ED produced the November 13, 2013 Electronic Announcement with the reminder of the requirement. [And, to clarify, the requirement to have a DL quality assurance program and processes is separate and distinct from the option to participate in a Quality Assurance Program related to verification described in 34 CFR 668.53(a)(1)-(4); 668.54(a)(1),(2), and (4); 668.56; 668.57; and, 668.60(a).]
The Direct Loan (DL) quality assurance requirement stipulates that schools must implement a quality assurance (QA) process that ensures they are complying with the DL program requirements and meeting the DL program objectives. Schools must also be able to document
The U.S. Department of Education (ED) has initiated this e-mail contact to emphasize the availability of the “income-driven” repayment plan options. The intent is to ensure that all borrowers have the appropriate information to select the repayment plan that is appropriate for their individual circumstances “so that student loan debt does not stand in the way of life’s opportunities.”
The focus of this undertaking includes several categories of borrowers. The first priority is those borrowers whose grace period will end soon. Additionally, borrowers who have become delinquent in payments, along with those borrowers in deferment or forbearance due to financial hardship or unemployment are included in the aim of this thrust. And, finally, the last group encompassed in this particular drive is those who have higher-than-average student loan debts.
Borrowers are urged to access and review various resources pertinent to gaining an understanding of the diverse repayment plan options. They are also informed that their loan servicer will be contacting them soon, if they have not already, regarding the various repayment options. ED suggests the loan servicer as a
The U.S. Department of Education (ED) has modified its stance related to steps used when working with overlapping academic years in scenarios where students change schools. The updated guidance clarifies the authorized method for schools to use in determining the beginning date of the academic year at a student’s prior school in situations where there is a potential overlap of the academic year at the prior school and the student’s current school. Previously, and as remains an option, schools always had the choice to contact the prior school to obtain documentation of that school’s academic year begin and end dates in potential overlapping year cases. But, schools could also choose to assume the dates of the academic year at the prior school when the information was not available. Using this alternative assumption method, the new school could consider—in most cases—that the prior academic year began with the starting date of the student’s most recent loan period (as shown in NSLDS) and to have ended 30 calendar weeks later. ED no longer authorizes this alternative assumption method as an acceptable way for determining the dates of the prior academic year. Th
Yes, it seems that 2013-2014 has just begun, but it is already time to be planning for 2014-2015. ED has provided several items that schools should be aware of in anticipation of the start of 2014-2015 processing in January.
First, schools will want to review the initial 2014-2015 Federal School Code (FSC) List of Participating Schools. This list contains the codes that students use to select your institution to receive the results of their Free Application for Federal Student Aid (FAFSA). The FSC list must be kept current and correct with up-to-date school addresses and six-digit OPE codes to ensure you receive your students’ FAFSA results. Schools may access the list to review it at Initial 2014-2015 Federal School Code (FSC) List of Participating Schools. (Alternatively, you may find it on IFAP under “ILibrary” in the “Publications by Document Type”.) Any corrections that may be needed must be made on the E-App Web site utilizing the “Update your Federal School Code Addresses which are used by the FAFSA”, located on the left side of the page under
To perform the account validation process, each organization’s Primary DPA must follow the steps outlined below for both the organization's SAIG mailboxes (Destination Points/TG numbers) and Electronic Services accounts. Failure to complete this process by December 13, 2013will result in loss of access to Federal Student Aid data systems, including services such as Institutional Student Information Record (ISIR) deliveries, ISIR requests, Free Application for Federal Student Aid (FAFSA) corrections, and NSLDS enrollment reporting and updates.
Note: The Primary DPA must have an FSA User ID to complete the process described below. To obtain an FSA User ID, go tohttps://fsawebenroll.ed.gov/PMEnroll/PMAccountServlet.jrun, provide identifying information, and follow the remaining registration steps. Once the registration process is complete, including establishing a password, the FSA User ID will be e-mailed to the Primary DPA.
The Primary DPA of the primary TG number (Destination Point/mailbox) must perform the following steps to provide a
Every organization enrolled for a Student Aid Internet Gateway (SAIG) account is required to review and validate its assigned TG numbers by December 13, 2013. Failure to complete this process by December 13, 2103 will result in the loss of the user’s access to Federal Student Aid data systems, including access to such items as Institutional Student Information Records (ISIRs), duplicate ISIR requests, Free Application for Federal Student Aid (FAFSA) corrections via FAA Access to CPS Online, and NSLDS enrollment reporting and updates.
Accounts that must be validated include TG numbers (SAIG mailboxes) with access to the NSLDS Professional Access Web site, the eCampus-Based (eCB) Web site, and all FAA Access to CPS Online user accounts. It also includes TG numbers enrolled for SAIG batch services for the National Student Loan Data System (NSLDS), the Central Processing System (CPS), the Common Origination and Disbursement system (COD), and the Financial Management System (FMS).
We remind you to please only validate services that are listed under your school’s TG number. Please do not update any services that are listed under agreement with FAME’s TG number that is associa
These include changes in COD that impact the COD Web Quick Credit Checks for PLUS Loans, enhancements to loan counseling modules, a new deadline of October 24, 2013 for submitting Annual Campus Safety and Security reports this year, and finally, a re-scheduling of the second round of meetings for the Gainful Employment Negotiated Rulemaking (Neg Reg) committee.
ED has announced that effective next week the online credit check process for PLUS Loans in COD is being enhanced. As of October 27, 2013, when a credit check is requested, there will now be the requirement to include both the borrower’s and the student’s identifier information, as well as the school information related to the loan request. Previously, the student’s information was not a requirement if the credit check was for a parent PLUS Loan. The form on the Web is being modified to include the selection of whether the credit check is for a parent PLUS Loan borrower or a graduate student PLUS Loan borrower. The student identifier information in both cases, whether for the parent PLUS borrower or the graduate PLUS borrower, will be compared against CPS data (ISIR) to verify a student match exists. If th
Last night Congress passed a bill to allow the government to re-open as early as today, October 17, 2013. President Obama signed the measure into law early this morning. The bill offers only a short-term stopgap response to the issues that led to the shutdown we just experienced. That is, the bill extends funding for the federal government through January 15, 2014, and raises the federal debt ceiling through February 7, 2014. As such, although the government is back in business, there is much work to be done between now and January.
The direct impact as it relates to student financial aid, of course, is that federal employees will be returning to work. This will prevent any further backlogs or delays in the Federal Student Aid system and processes. Fortunately, the government shutdown, although naturally affecting some situations, was comparatively low in overall disruption of day to day processing.
Of immediate importance are two points. First, the influences of sequestration are still in effect. The bill passed last night did not eliminate sequestration. Therefore, the prior guidance the U.S. Department of Education (ED) disseminated in various information
In the direction that ED gave on Friday, October 11, 2013, schools are informed that this most recent sequester guidance is based on the changes effective October 1, 2013, which was the beginning of the 2014 Federal fiscal year (FY 2014). The information in this latest update from ED pertains only to FY 2014. It does not replace or supersede the information provided in the three previous communications from ED related to the impact of the sequester on Federal Student Aid programs for FY 2013, which ended September 30, 2013. It is also important to realize that this sequester impact announcement is not related to the Federal government shut-down currently in place. Rather, this sequester announcement is the continuing implementation of the effects of the Budget Control Act (BCA) of 2011 (effective August 2, 2011) that required the across-the-board cuts in programs unless Congress had enacted legislation to reduce the Federal deficit by March 1, 2013.
Schools are reminded that the Federal Pell Grant program is exempt from sequester. Therefore, the 2013-2014 Pell Grant Payment and Disbursement Schedules continue to be in effect. Also, the 2013-2014 Campus-Based aid prog
While the U.S. Department of Education (ED) stated prior to the government shutdown on October 1, 2013 that it believed there would likely be little impact felt if the shutdown did not last long, there appears to be some circumstances that are impacting the Federal Student Aid process, other financial resources available to students in the near term, as well as reporting and information dissemination capabilities.
Tax Return Transcripts: The first area of concern that has surfaced to bring immediate questions to mind is in regard to tax return transcripts for those students required to submit them for verification purposes. The preferred method for verifying students’ and parents’ information submitted on tax returns is through the IRS Data Retrieval Tool (DRT) process utilized as part of the initial FAFSA application
The U.S. Department of Education (ED) has made enhancements to the Free Application for Federal Student Aid (FAFSA) on the Web related to the IRS Data Retrieval Tool (DRT) process. These most recent changes made in September, 2013 include the ability of the IRS DRT to import to the FAFSA the total “Income Earned from Work” for those with marital statuses of single, divorced, separated, or widowed. When the IRS DRT is used and the total “Income Earned from Work” field is updated, it results in the student and/or parent, as applicable, “Income Earned from Work” fields being updated to display dynamic text that indicates the value in that field was transferred from IRS. Additionally, if the student or parent modifies the field values, a message will display to indicate they changed them. Noteworthy is the fact that if the student or parent modifies the data in the “Income Earned from Work” field, it does not change the IRS Request Flag values. That is, a change in the amount of income earned from work does not affect the historic criteria for IRS Request Flags, which is based upon the original or amended adjusted gross income (AGI) or taxes paid figures, not income ear
The Department of Education (ED) has released the latest editions of both, the 2-year Cohort Default Rates (CDR) and the 3-year CDR. As is the case annually when there are both 2- and 3-year rates calculated, the 2-year CDRs were released one week before the 3-year CDRs. The 2-year CDR rates were released on September 16, 2013. The 3-year CDR rates were released on September 23, 2013.
Since the CDR rates are crucial to a school’s continued participation in Title IV Federal Student Aid programs, it is vitally important that each institution review its CDR packages that ED distributed, and specifically the data used to calculate the rates to ensure it is accurate. These CDR notification packages were distributed via the Student Aid Internet Gateway (SAIG). The information was sent to the SAIG mailbox for the destination point that the school had designated for that purpose. The information was sent only to those schools enrolled in the Electronic Cohort Default Rate (eCDR) process. Therefore, if a school has not signed up for the eCDR process, the information was not distributed to the school. If an institution did not sign up for eCDR, it is incumbent upon the school to acces
Important U.S. Department of Education (ED) deadline dates are approaching that may need your action. With the soon arriving end of the Federal fiscal year, a number of dates of which schools need to be aware are critical and require schools to take the necessary action applicable to their operations. Some of these dates are applicable to closing out the 2012-2013 award year, while others will impact 2014-2015 funding. Significant deadlines are highlighted in the following information.
September 21, 2013 – This is the deadline by which corrections to a SAR or ISIR must be submitted for the 2012-2013 award year. This date will likely affect few students and schools currently, but may impact some.
September 28, 2013 – This is the deadline by which all applicable valid 2012-2013 SARs or ISIRs must be received by the institution. Notwithstanding, the valid SAR/ISIR must have been submitted not later than the student’s last date of attendance in the award year (unless the student meets the conditions for a late disbursement).
September 28, 2013 – All verification documents for the
Did You Know? ED is sending out more money. That is, the Department of Education is sending out additional disbursements of Pell Grant Administrative Cost Allowances (ACA).
ED began sending subsequent disbursements of the ACA for the 2011-12 and 2012-2013 award years on August 26, 2013. These disbursements are the third and final ACA disbursement for 2011-2012 and the second ACA disbursement for the 2012-2013 award year. The amount of the total ACA disbursements for an award year is based upon the number of unduplicated Federal Pell Grant recipients an institution paid during the applicable award year. The amount authorized by Federal regulation for the Federal Pell Grant ACA is $5.00 per unduplicated Pell Grant recipient in an award year. Thus, an institution may determine how much total ACA it should receive in an award year by multiplying the total number of Pell Grant recipients by $5.00. The amount of $5 per Pell Grant recipient that is paid to the school is to be used to offset the costs of administering the Title IV programs. Specifically, the costs that may be offset are those associated with administering the Federal Pell
All schools participating in the Federal Pell Grant (Pell Grant) and Federal Direct Loan (DL) programs are required to submit disbursement and payment adjustments to the Common Origination and Disbursement (COD) system within 15 calendar days of such transactions taking place. Prior to April 1, 2013, schools had 30 days within which to report disbursements or adjustments to previously made disbursements. However, effective for all disbursements and payment adjustment transactions on or after April 1, 2013 schools must submit such transaction records within 15 calendar days of the transaction taking place. These changes in the time frames for reporting the disbursement transactions are critical to help avoid potential institutional and student liabilities for overpayments due to such factors as exceeding Pell Grant Lifetime Eligibility Used (LEU) limits or impacting students’ eligibility for Subsidized DLs due to the 150% of program length limit. ED has requested that schools not wait until the end of the 15 day period but rather report the transaction records to COD as quickly as possible. ED has also indicated that failure to report required changes within the appropriate timefr
ED began a process of notifying certain PLUS Loan applicants of their opportunity to be reconsidered for a loan. Those being notified were previously denied a PLUS Loan based upon their credit check that showed an adverse credit history, but are individuals whom ED believes will likely be approved if they request reconsideration of their original credit check. The first notification of such PLUS Loan applicants began on April 21, 2013. The individuals being informed of this opportunity are being notified by e-mail, unless ED does not have a valid e-mail address for them. In such cases, the individual is sent a letter by traditional mail. Applicants that are notified are instructed to contact ED’s Student Loan Support Center at 1-800-557-7394 for more information. If the applicant requests reconsideration in a timely manner, it may alleviate the need for an additional credit check. It is important that the PLUS Loan applicant is the one to contact the Student Loan Support Center and not the school or the student on behalf of the parent applicant. While ED does not guarantee that those who are reconsidered for the P
September 17th of each year is designated as Constitution Day.As required by the Consolidated Appropriations Act, 2005 (Pub. L. 108–447, signed into law on December 8, 2004), schools that receive Federal funding in a Federal fiscal year (e.g., Title IV Federal Student Aid) are required to “hold an educational program on the United States Constitution on September 17 of such year for the students served by the educational institution.’’ The regulation pertaining to this requirement is in the Federal Register dated May 24, 2005.
While the U.S. Department of Education (ED) does not stipulate what the requirements of such a program on Constitution Day should include, it does offer some resources in the Federal Register. Some of these may include such sources as the Library of Congress’ American Memory Web page, as well as the National Arch