One of the functions of the U.S. Department of Education is to oversee the Federal Student Aid programs to ensure they are administered correctly and that institutions are meeting the FSA requirements for institutional eligibility, financial responsibility, and administrative capability.
School Participation Divisions review information about each title iv approved school from a variety of sources including accrediting agencies, state licensing boards and agencies, student complaints and of course, financial and compliance audits.
This information is evaluated by ED and FSA to assess potential risk to the FSA programs and if necessary, act to investigate a school. One of the ways ED does this is by conducting program reviews at schools that exhibit certain indications of problems or pose a potentially significant risk of failing to comply with the rules and regulations governing title iv participation.
Knowing what to watch out for can help you avoid compliance problems.
These findings represent data ED reported based on findings from Program Review audits and compliance examinations reports conducted by FSA and published in the last twelve months for fiscal year 2018.
Satisfactory Academic Progress Policy Not Adequately Developed/Monitored
Findings like these are preventable.
Higher Ed Executives provides colleges and universities with objective and confidential assessments that can help you uncover unknown compliance problems and improve title iv administrative and operational procedures and processes.
Our comprehensive assessments cover the full spectrum of FSA requirements for institutional eligibility, financial responsibility, and administrative capability.
Call us today for a free no obligation consultation and to find out how our assessments can work for you.
FSA recently released an electronic announcement reminding institutions of the requirements for proper cash management compliance. Disbursing aid timely, resolving excess cash and reconciliation are necessary procedures and controls to ensure compliance with the federal regulations. Noncompliance in these areas often results in institutions being placed on the Heightened Cash Monitoring disbursement method and often with a requirement that the school post an irrevocable Letter of Credit equal to a percentage of title iv funds that have been drawn down in prior years. It’s not pretty. The simplest thing to do to avoid this is to have a handle on some cash management basics.
Three Steps to Cash Management Compliance:
1. Submit disbursement records timely.
All disbursement records should be sent to COD within 15 days after making the disbursement or becoming aware of the need to adjust a student’s previously reported disbursement.
2. Keep an eye out for excess cash and if necessary, return any undisbursed funds to the Department.
Excess Cash is any amount of title iv funds (excluding Perkins) that the school does not disburse to students or parents by the end of the third business day after the date the school received funds from the department. Excess cash can also occur when a school deposits previously disbursed funds into their federal bank account and lets it sit for more than three days before disbursing it to another student or returning it to the Department.
3. Reconcile regularly.
If you are reconciling all title iv disbursements on at least a monthly basis, you’ll be in a good position to ensure that you are meeting the disbursement reporting and excess cash deadlines. Regularly reconciling both internally between business office and financial aid office data as well as externally between financial aid office data and the Department’s COD and G5 systems will make final reconciliation and program year closeouts a snap. Plus, your auditors will be very happy to see the proof of your regular efforts.
On October 15, 2018, the Department published a notice in the Federal Register announcing that it will be establishing a negotiated rulemaking committee to prepare proposed regulations to address accreditation and innovation in higher ed. The Federal Register notice also requested nominations for individual negotiators who represent key stakeholder constituencies for the issues to be negotiated to serve on the committee and announced a schedule for committee meetings.
In addition, the notice requested nominations for individuals with pertinent expertise to participate in one of three topic-based subcommittees: Distance Learning and Educational Innovation; Faith-Based Entities; and, TEACH Grants.
The Accreditation and Innovation Committee will meet for three sessions on the following dates: Session 1: January 14–16, 2019 Session 2: February 19–22, 2019 Session 3: March 25–28, 2019. Meanwhile, each of the subcommittees will meet for three sessions on the following dates: Meeting 1: January 17–18, 2019 Meeting 2: February 12–13, 2019 Meeting 3: March 11–12, 2019.
Locations for the committee and subcommittee meetings will be announced in a subsequent Federal Register Notice. As provided in the Federal Register notice, the deadline for submitting nominations is Thursday, November 15, 2018.
The New England Association of Schools and Colleges, Commission on Institutions of Higher Education (NEASC-CIHE) is now the New England Commission of Higher Education (NECHE). NECHE has taken on the functions formerly performed by the CIHE. The move follows concerns raised by officials last year that the NEASC’s Commission on Higher Education wasn’t a “separate and independent” organization as required by ED. Now NECHE will function as an independent organization, fulfilling the federal requirements.
Two years after the Obama administration’s top education officials Emma Vadehra, the Chief of Staff to, and, Education Secretary John B. King Jr. at the U.S. Department of Education decided to terminate the Department’s recognition of ACICS, the Accrediting Council For Independent Colleges and Schools, the Trump administration is attempting to revive them.
Diane Auer Jones, an aide to Education Secretary Betsy DeVos who has been carrying out the duties of the Undersecretary of Education and acting as “Senior Department Official” (SDO), found the Accrediting Council of Independent Colleges and Schools (ACICS) to be compliant with only 19 out of the 21 requirements for federal recognition, but still hasn’t demonstrated full compliance. She recommends ACICS be given another twelve months to come into or demonstrate compliance with federal accreditor recognition standards.
In a statement Michelle Edwards, President and CEO of ACICS commented on the SDO’s recommendation:
“It has been a long and winding road since we filed our 2016 petition for continued recognition. We have long believed that ACICS met accreditation criteria as established by the Department and had the ability to remedy any deficiencies noted by the Department. We understand the agency’s need to be extremely thorough in its evaluation of our compliance. We appreciate the SDO’s very thoughtful and detailed review of the voluminous supporting materials that the agency provided in response to the Secretary’s April 2018 Order.
In the past two years, ACICS has implemented significant reforms designed to address concerns, strengthen the accreditation process and, ultimately, enhance our ability to hold schools accountable for meaningful student outcomes. These efforts will continue in force as we improve and evolve our processes to ensure we not only remain in compliance with current federal requirements, but also foster an environment of rigorous quality and continuous improvement, both at ACICS and our accredited schools.”
The final decision whether to follow the SDO’s recommendation seems to rest with Betsy DeVos who must now review the SDO’s decision, and decide whether to grant the agency recognition or not. What remains unclear is the Secretary’s authority to grant another extension of accreditation to an agency that has not yet demonstrated full compliance with the recognition criteria or what the timeframe for her to decide is.
In July, U.S. Education Secretary Betsy DeVos granted the Senior Department Official an extension to review and respond to a trove of documents related to ACICS’ petition for continued recognition as U.S. Department of Education accreditor. Secretary DeVos granted the extension after the SDO requested it. The SDO has been given until September 4, 2018 to file the response. You can read the memo from ED on ACICS website here.
In a statement on the ACICS website, the agency announced it has regained recognition today as a federally recognized accreditor. Retroactive status has been granted going back to December 2016 while Education Secretary Betsy DeVos reviews the agency’s 2016 petition for recognition.
Meanwhile, ACICS has this statement posted on their website.
Secretary of Education Orders Restoration of ACICS as a Federally Recognized Accrediting Agency as of December 2016.
Secretary of Education Orders Restoration of ACICS as a Federally Recognized Accrediting Agency as of December 2016 and Outlines Next Steps in the Compliance Review Process
On Tuesday, April 3, 2018, the Secretary of Education issued an Order notifying ACICS that the U.S. Department of Education has restored ACICS’s status as a federally recognized agency as of December 12, 2016. The Order comes in response to the recent ruling from U.S. District Judge Reggie B. Walton that the U.S. Department of Education violated the Administrative Procedures Act by “failing to consider various categories of relevant evidence” in its decision to withdraw ACICS’ recognition as a nationally-recognized accreditor. The case was remanded back to the Secretary of Education.
Michelle Edwards, ACICS President, issued the following statement regarding the Order:
“We were gratified by the court’s ruling requiring the Department to review evidence submitted by ACICS documenting many meaningful reforms implemented by the organization. And we appreciate the timely response by the Department, reinstating our recognition as of December 2016 and outlining the next steps in the compliance review process. The Department’s decision ensures that students currently attending ACICS schools are not negatively impacted pending the Department’s ongoing review process. In the last two years, ACICS has implemented significant reforms designed to address concerns, strengthen the accreditation process and, ultimately, enhance our ability to hold schools accountable for meaningful student outcomes. These efforts are comprehensive and ongoing, and we look forward to working with the Department to ensure we are not only in full compliance with current requirements, but also in a position to become, over time, a leader among accreditors.”
Just when it seemed that all hope of restoring ACICS recognition with the U.S. Department of Education had died, a federal judge issued an unexpected decision breathing new life into the embattled accreditor’s ongoing efforts to regain their recognition. Things were looking grim for the accreditor when it was discovered that riders attached to last month’s omnibus spending bill H.R. 1625 (115) which were intended to clear a path forward for the agency, were removed before the bill was passed.
The news of the riders being stripped signaled what many thought was the end of the road for those few remaining ACICS schools that have been struggling to change accreditors by the final June 2018 deadline. The accreditor has been pursuing re-recognition and had hoped to have their application for recognition reviewed and approved by NACIQI this spring, but with the clock ticking away and seemingly fewer and fewer legal options left, all was seemingly lost.
In a surprise ruling announced late on a Friday night, U.S. District Court Judge Reggie B. Walton issued a ruling in favor of ACICS and remanded their case back to the Secretary of Education, Betsy DeVos for further review. According to the court decision, Secretary DeVos can make her own recommendation taking any new evidence that the accreditor has made improvements to its oversight of schools into consideration because the Obama Administration’s decision was found to be illegal because they failed to consider all the relevant evidence in the case when making their decision.
ACICS posted this on their website following the court’s decision.
On Friday, March 23, U.S. District Judge Reggie B. Walton ruled that the U.S. Department of Education violated the Administrative Procedures Act by “failing to consider various categories of relevant evidence” in its decision to withdraw ACICS’ recognition as a nationally-recognized accreditor. The case will be remanded back to the Secretary of Education.
ACICS has long maintained that the substantial procedural flaws in the re-recognition process, culminating in the Secretary’s Decision, amounted to an unprecedented violation of the Administrative Procedure Act.
ACICS argued in its Motion for Summary Judgment, and the Court agreed, that the Secretary failed to consider all available relevant information, including 36,000 pages of evidence submitted by ACICS in response to a specific request from the Office of the Under Secretary and that the Secretary failed to consider the substantial evidence that ACICS provided of its placement verification and data integrity programs. Michelle Edwards, ACICS President, issued the following statement in response to Friday’s ruling:
“We are gratified by today’s ruling as we believe the Department failed to review evidence submitted by ACICS documenting many meaningful reforms implemented by the organization. We are studying the ruling and working to understand its implications for the organization moving forward. We know many schools have questions and we will move quickly to address those questions and map out a path forward.”
All eyes are on DeVos as we await her decision and recommendation.
This might just be the comeback story of the year.
The Omnibus spending bill introduced earlier this week was lauded as a win for students and colleges and heralded by higher ed advocates because it contained large increases in funding for a number of important federal financial aid programs. But for some school’s what’s missing from the bill signals the beginning of the end. Schools presently accredited by the Accrediting Council for Independent Colleges and Schools (ACICS) were dealt a major blow when riders in the bill which would have given the schools an extension to obtain alternative accreditation were stripped from the bill.
In an email circulated by Central States Private Education Network (CSPEN), Tom Netting and Jeri Prochaska explain the details and what happens next.
CSPEN UPDATE March 22nd, 2018 FY18 Omnibus Appropriations Deal Reached Shortly after 8 o’clock last night congressional leaders finally released the 2,232-page, $1.3 trillion omnibus spending proposal providing funding for the remaining six months of the current fiscal year which began last October 1st. The bill, currently being negotiated on the House floor with Senate consideration likely to follow over the next couple of days – suggesting that a sixth Continuing Resolution will likely have to be passed by midnight tomorrow in order to provide time for the Senate to consider the bill. In general, the bill is a very sizeable increase in spending over both the prior budget deal agreed upon under the Obama Administration and larger than President Trump’s budget request. Thanks to the new two-year budget deal signed into law last month, Labor-HHS-Education appropriations, which is already the largest non-defense title in the omnibus, received a total of $177.1 billion, $16.1 billion more than fiscal 2017. Based upon the revised number, the funding allocations for each of the three departments breaks down as follows: $88.1 billion for Health and Human Services Department, $70.9 billion for Education Department, and $12.2 billion for the Labor Department. Within Education, the new budget deal netted a $4.1 billion increase over the prior year ($70.9 – FY18 v. $66.8 FY17), providing benefits for higher education funding in the form of $24.4 billion for Federal Pell Grants, compared to $22.5 billion in 2017 AND the removal of a provision previously being considered to repeal $1.6 billion of the existing surplus in the Federal Pell Grant program. This favorable outcome for students will result in an increase in the maximum award of $175 for Academic Year 2019, raising the maximum award to $6,095 for zero EFC students, ensures the continuation of Year-round Pell funding, and suggests that congress will continue to support incremental Pell Grant support as the appropriator begin to discuss funding levels for Fiscal Year 2019.
ACICS-accredited Institution Transition Provision Political Casualty Through absolutely no fault of anyone, including most notably the House and Senate Education Committee leadership, ACICS-accredited institutions, Accrediting Agencies, or those supporting their efforts to extend the June 12, 2018 deadline for transition to an alternative accrediting agency, the final deal reached by House and Senate leaders and the White House failed to include an amendment granting institutions and accreditors additional time for institutions to make necessary changes to comply with their new accrediting agencies’ standards and/or provide the accreditors with updated data validating their compliance. Despite efforts behind the scenes to resolve and further refine the language originally contained in the Senate’s version of the Labor-HHS-Education appropriations bill (S. 1557 – S. Report 115-130) by Senate HELP Committee leadership, House support for the inclusion of an amendment to address the need for a delay, and significant advocacy from impacted institutions and accrediting agencies; the provision was removed as part of a much larger political deal in which ALL RIDERS were removed in order to clear the way for consideration. As reported in the press, the final negotiations centered around Democrats insistence on provisions related to Deferred Action for Childhood Arrivals (DACA) and the Administration/Republicans efforts to providing funding for building of a wall on our nation’s southern border. Unable to reach an agreement on these two key issues, an alternative approach was taken in which all of the riders were removed. Thus, both efforts to resolve and include the ACICS-accredited institution extension (supported by the Republicans) and the inclusion of both Federal Pell Grant and student loan relief in Borrower Defenses claims of Corinthian, ITT, and other institutional closures (supported by the Democrats), along with many, many other priorities being sought for inclusion in the “must-pass legislation” became casualties of the final deal. So what now? Without an extension, institutions converting from ACICS to another accrediting agency, by law, must complete the process on or before June 12, 2018 (18 months from the December 12, 2017 notification based upon the NACIQI/Obama Administration decision. While a significant number of institutions and accreditors will have completed the process, it is incumbent upon the community to continue to share with Congress and the Administration the clear impact that the deadline will have on those institutions and their new accrediting agency. Both groups need further detailed information showing how and why the 18 month window is too short and the reasons why both the accreditors and the institutions legitimately need more time to complete the process. Admittedly, this has been the strategy up to this point, and it would have been resolved if the final deal would have retained many crucial riders. But since it didn’t, we must now redouble our efforts to show the impact on students, schools, and the accreditors that must – as everyone would expect them to – follow their standards and processes. Thus we must help make everyone understand why additional time to complete the transition/conversion process is in everyone’s best interest.
CSPEN will certainly continue to do everything we can to support these efforts on behalf of the effected portions of our community.