Since You Asked: Questions & Answers

April 24, 2015

Q1:  We have a cost of attendance (COA) that uses national standards or averages for room and board, personal, and transportation expenses.  But, as of January 2015, for all future starts we would prefer to use the results of a student survey we have conducted.  Can we do that?

A1:  There is no prohibition on ED’s part.  A school is able to review and update its Title IV policies and procedures (of which COA is a part) when appropriate.  However, the school must be clear in documenting its policies and procedures in regard to when the change occurred and how it was implemented, etc.  Naturally, the data upon which the new COA figures are based should be maintained as documentation for the COA.  Also, students should be appropriately notified and consumer information updated, etc.   There may be other points to consider regarding such changes in the middle of an award year.  For example, it can create additional challenges for staff to communicate easily and accurately with students when dealing with differing costs during the same award year.  It also has potential to generate more questions from auditors during the annual audit.

Q2:  If a student is suspended for 3 weeks due to poor conduct, does the school still keep them as enrolled for enrollment reporting purposes, but not disburse their federal aid?

A2:  Assuming the student plans to come back in the same payment period, yes, you would likely want to keep them enrolled.  It may depend on the type of program, for example, term vs. non-term.  Naturally, in a clock-hour or non-term credit hour program, there would be the reinstating of aid when the student returns within 180 days.  But, in a term-based program it is difficult to miss 3 weeks and then return and be successful in completing the classes for that term.  Finally, if it is a planned anticipated reinstatement, it is best to get that intent to return after the suspension in writing from the student.

Q3:  Many schools have term dates that end later than the last day of attendance (LDA), depending on the school’s academic schedule.  If the term end date is a Saturday, but the student’s last day of class is a Tuesday or Thursday, which date is reported as the graduation date?  Is the actual LDA or the last date of the term reported?

A3:  Our latest guidance from ED is that they give schools the flexibility to determine what graduation date to report according to what effective date they give the graduation.  And, keep in mind that this is specifically addressing the difference in the literal LDA and the effective graduation date in the same term.  Note that this response is only addressing students who completed the term and will have a graduation date of the same term.

Q4:  If a school offers a cosmetology program which is approved for Title IV purposes and wants to offer a barbering program, does ED consider cosmetology and barbering similar enough programs such that a school would not have to submit the barbering program to ED to add to the ECAR until the school goes through recertification or otherwise had to do another application?  The school already has state and accrediting agency approval.

A4:  Cosmetology and barbering are different programs, and the school must report each to ED and each program must be approved before students would be able to receive Title IV aid when enrolled in the program.

Q5:  Can a school add a new academic program while on HCM2 status?

A5:  Whether or not a school that is on Heightened Cash Monitoring level 2 (HCM2) status can add programs for approval is dependent on a number of factors.  One such factor is whether the school is on provisional approval, among others.  ED makes the determination based upon the specifics of the HCM2 status.  Therefore, a school on HCM2 status desiring to add a program will need to have communication with ED.  (For FAME clients that contract for such service, FAME can help facilitate the communication.)

Q6:  If we have a non-term program consisting of 74 credits that is 73 weeks long, can we have the first academic year scheduled as 39 credits and 36 weeks with the second academic year resulting in 35 credits and 37 weeks?  Or, do we have to figure out how to have equal academic years of 37 credits each, and the weeks are just an odd configuration either way?  If we define equal academic years but disburse later, is the Subsidized Usage Period (SUP) affected?

A6:  The academic year definition has to be the same and consistently applied throughout all years of a program.  A program cannot have two different academic year definitions.  The school must come up with one definition that at least meets the regulatory minimums and if parts of the program do not fit neatly into the definition, you may end up with some small portions left over, or a large period that still has to be prorated as the last period of enrollment.  And, concerning disbursements, the SUP should not be affected by disbursement dates as long as the loan period and academic year are properly identified.

Q7:   A court order in calendar year 2000 gave custody of a minor child to the child’s grandmother, at which time the child was 8 years old.  Custody was given with consent of the natural mother, while the father’s whereabouts are unknown.  There was nowhere on the court document that they could have checked off “legal guardianship.”  Is the grandmother’s “custody” the same as legal guardianship for this student to answer “yes” to question 55 on the FAFSA?

A7:  Typically, no, unless they can provide documents that show that custody in their state is considered the same as legal guardianship.  If the state has separate definitions for legal custody and legal guardianship the student would not be able to answer the question “yes.”  There may be other considerations for looking at a dependency override, but again, that will be contingent upon the current circumstances and appropriate documentation.

Q8:  In reference to this paragraph in the 2014-2015 Federal Student Aid Handbook, Volume 3, Chapter 5, page 3-122:

  1. 2.     For a first-time borrower who is enrolled for three-quarter or one-half-time, the calculated subsidized usage period is prorated by .75 or .5, respectively.

Will the proration of .75 actually round to be .80 SLEU the same way that SUP is rounded to the nearest tenth of a year?

A8:  Technically, rounding is always the last step of the calculation. Therefore, if you had a SUP of 0.5 (for a one-term loan), and the student is enrolled three-quarter-time, 0.5 years would be multiplied by 0.75, to get 0.375, which would then be rounded to 0.4 years.  In this example, the effect is the same as rounding the proration factor from 0.75 to 0.8, but in terms of order of operations, it must be rounded at the end, because it won’t always work that way.

For example, if you have a non-prorated SUP of 0.45, if it was prorated based on 0.75 the result would be 0.3375, rounded to 0.3.  If the proration factor was rounded to 0.8, the result would be 0.36, rounded to 0.4.

Q9We have a student who graduated with a credit balance on his account from a Pell Grant disbursement.  After graduation, we learned that the student passed away.  We had written the check at the end of the payment period and before the student passed away.  We had called the student to pick up the check.  Upon calling for the student, we learn that the student has died during that interim period between graduating and the time we called.  Do we send the credit balance back to ED?  The spouse brought in the death certificate and wants to pick up the check.

A9:  Yes, the credit balance goes back to ED.  Unless Federal Work-Study funds for hours worked are being paid, no Title IV funds can be disbursed to a deceased student’s estate.  The last section of Appendix D of the 2014-2015 Federal Student Aid Handbook talks about credit balances and the death of a student.  Regardless of whether a return of Title IV funds (R2T4) calculation applies, the guidance in that section on postwithdrawal disbursements is used to address credit balance funds when someone dies.  For example, the order of addressing the credit balance is given:  you pay off existing school costs, return any student overpayments, or return it to the Title IV programs.

Q10:  A student has a Pell Grant Lifetime Eligibility Used (LEU) in the amount of 599.99% of the Pell Grant maximum of 600%.  She has a remaining eligibility of only 5 cents of Pell (yes, 5 cents).  Is there a minimum amount below which Pell does not have to be awarded?

A10: Dear Colleague Letter GEN-13-14 states that:

Minimum Pell Grant Awards –

There is no de minimus award amount for purposes of determining a student’s award because of the 600% LEU limitation. For example, for the 2013-2014 award year, a student with an EFC of 0 and an LEU of 593.000% would be eligible for the remaining 7.000% which is $395.15. Even a student with a very small remaining LEU is eligible to receive the calculated amount of Pell Grant. For example, a student with an EFC of 2550 and an LEU of 599.500% would be eligible for the remaining 0.500% which is $15.475 truncated to $15.47 or, if necessary, rounded down to $15.00.

However, it also states:

“Note:  If the institution only awards Pell Grants in whole dollars, a first disbursement may be increased to the next higher dollar as long as a subsequent disbursement is reduced by the next lower dollar.”

Finally, the 2014-2015 Federal Student Aid Handbook, Volume 3, page 46 states:

“These rounding rules do not apply if the amount disbursed would exceed the student’s Scheduled Award or place the student’s LEU over 600%.”

Therefore, the one exception to having to award and pay Pell in an amount less than a dollar is if the school only awards Pell in whole dollars and they cannot round to a whole dollar because it will exceed the student’s 600% Pell Grant LEU.

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