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 postalonly 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 acronyms.  In fact, the financial aid profession has been known to have a very interesting and long-simmering “alphabet soup” due to its voluminous use of acronyms such as FAFSA, ISIR, SAR, G5, COD, NSLDS, etc.  But, until recently, it is possible many in the financial aid world were not very familiar with the acronym, CIP, and its associated codes.

Classification of Instructional Programs (CIP) Codes

cipClassification of Instructional Programs (CIP) codes are a key item in higher education.  The use of CIP codes are employed to uniquely identify what academic programs are being referenced.  The CIP taxonomy was originally developed in 1980 by ED’s National Center for Education Statistics (NCES) as a tool to support accurate tracking and reporting of academic activity by specific fields of study and completion.  Of interest is the fact that once developed, the CIP codes did not remain static.  The list of codes has undergone several revisions and updates, the first being in 1985, followed by a revision in 1990.  Subsequently, there have been modifications made to the codes every ten years thereafter.  Thus, the most recent version of the CIP and its related codes is the 2010 edition.

CIP Codes and Financial Aid

Schools have a responsibility to ensure that all reporting of data that requires use of CIP codes is conveyed accurately with the most recent version of the CIP codes being utilized.   As stated earlier, historically financial aid types had little familiarity with CIP and its codes.  The infrequent use and exposure to the codes likely caused them to be placed on the “back burner” of thought.  While the academic side of the house in postsecondary circles would design new courses and programs and assign a code to them for Integrated Postsecondary Education Survey (IPEDS) purposes, the world of financial aid remained relatively untouched by the CIP codes.  There would be an occasional need to report a new academic degree or certificate program on ED’s electronic Application for Approval to Participate in the Federal Student Aid Programs (E-App), but by and large, financial aid professionals were rarely exposed to CIP codes.   Then, along came the National SMART Grants that were implemented in 2006-2007.  With this new grant, schools did have to ascertain which of its programs and majors met the eligibility criteria for awarding students this new form of aid.  As this program was being implemented, ED did not consider the requirement to determine student eligibility by program major an issue since schools already used CIP codes.  This grant, however, is no longer funded.

capitolOctober 2010 saw another CIP code impact on financial aid personnel with the advent of the Program Integrity Regulations (effective July 1, 2011) and the Gainful Employment (GE) reporting requirement.  These GE regulations required the submission of five years’ financial aid data (e.g., loans received, etc.) by academic program, using the CIP codes to identify them.  There was only one GE report required, in November 2011, before Court action ended further GE reporting, thus far.  (A GE reporting requirement has been proposed again in ED’s March 25, 2014, Notice of Proposed Rulemaking.)  As a result of GE reporting, schools’ financial aid administrators were exposed more broadly to the concept of needing to understand and use CIP codes for reporting purposes.

More recently on the scene is the legislation that impacts NSLDS Enrollment Reporting as a result of the regulations published on May 16, 2013 and January 17, 2014. (See the June 18, 2014, edition of the FAME Regulatory Bulletin for more details on this latest reporting requirement.)  The new requirements stipulate the tracking of students’ loan usage by academic program, thereby requiring the inclusion of the CIP code in the reporting process.

CIP Codes’ Impact on Schools and Students

We have illustrated that the financial aid profession has seen a continuous expansion of its necessity to understand and utilize CIP codes in regulated reporting.  Naturally, if a school has not updated its CIP codes on its E-App and utilized accurate CIP codes in its IPEDS annual reporting, the school has likely been out of compliance from a reporting standpoint.  Each incidence of non-compliance can carry a fine assessment of up to $35,000 per instance.  So, there is the potential for costs to be incurred due to inaccurate reporting.

But, does this increase in the use of CIP codes have an effect on routine day-to-day processing activities?  The answer is a resounding, yes!

With the implementation of the technical specification changes in the Common Origination and Disbursement (COD) System in April of this year, the CIP code for the student’s academic program is now required as part of the Federal Direct Loan origination record.  This means that if a student’s loan record is submitted without the CIP code, it will be rejected.  Beyond that, however, is a situation that a number of schools are finding themselves experiencing.  Loan originations are being rejected due to invalid CIP codes.  Although it has been four years since the latest edition of CIP codes was published in 2010, apparently many schools have not yet updated their academic records to reflect the current CIP codes in effect.  As a result, when the loan origination record is submitted, the loan record gets rejected, thus causing delays in students receiving their funds.

Steps to Take

A school can take several steps to ensure that it is not going to be adversely impacted as a result of inaccurate or invalid CIP codes.  Following are some suggested steps to assist in making sure all CIP codes are current and valid.

  • Review the institution’s policy related to monitoring and assigning CIP codes.  The school should have a defined policy as to how this ever more critical data element is assigned, monitored, and maintained.
  • Determine when the last review and update of the institution’s academic programs’ CIP codes occurred.  If the codes are outdated, the current edition of CIP codes may be found at CIP 2010.  This site provides for an option to view a crosswalk of the 2000 CIP codes with the 2010 clipcodes.  (This Web page may also be accessed from the IPEDS Web site by selecting the “Report Your Data” tab and then the “Links to Tools” tab.  You will next find the option to select “CIP 2010 User Site”.)
  • If the institution has implemented new academic programs, in many cases they should have been submitted to ED via the E-App process.  If this has not occurred, it should be done immediately if it is desired for students in those programs that are required to be approved by ED to be considered for Federal Student Aid.  When submitting the new programs for consideration of approval ensure that the CIP codes of the 2010 edition are utilized in assigning codes to the programs.
  • If the institution has not updated its E-App so that it lists its current academic programs with valid CIP codes based upon the 2010 CIP codes, it should do so immediately.  The Eligibility Certification and Approval Report (ECAR) that is on hand at the institution should list all of the institution’s approved academic programs with current and valid CIP codes.
  • Ensure that all departments, offices, and persons at the school that have any responsibility for loan originations, IPEDS reporting, academic program development, NSLDS Enrollment reporting, etc., are aware of the latest CIP codes and what role they play in the institution’s operations and compliance.  Due to the differences in institutional structure and operations, the number of individuals and offices or departments that interact with CIP codes will have potential for significant variance.
  • Validate that all loan origination and enrollment reporting CIP code data sources are accurate and valid prior to submitting data files to COD and NSLDS.
  • Review your policy related to CIP code use, assignment, and maintenance at least annually to ensure it remains effective and current.

Codes can be used quite effectively to expedite processing as well as to monitor and track information, just as Zip codes may be used to expedite and track delivery of mail.  However, in order to obtain the expected outcome, the right code has to be used.  So it is with CIP codes.

(1415CODTR05302014)

 

The information provided to you is FAME’s opinion based upon our interpretation of the issues and details provided, and our interpretation of the Title IV regulations, legislation, and U.S. Department of Education guidance, as applicable. FAME shall not be liable for any error contained herein or for any damages whatsoever arising out of or related to the use of this information.