DETERMINING THE PRORATED AMOUNT OF CHARGES ASSOCIATED WITH A PAYMENT PERIOD

The U.S. Department of Education’s Office of Postsecondary Education (OPE) recently released a lengthy electronic announcement about the regulations found at 34 CFR 668.164(c) which require institutions to credit a student’s account with Title IV funds to pay for allowable charges associated with a payment period.  These regulations were part of the cash management final regulations that went into effect on July 1, 2016 which required institutions to prorate costs for books and equipment if an institution charges a student for some or all of the student’s books and supplies at the beginning of the student’s enrollment and the student does not have a real and reasonable opportunity to obtain those materials elsewhere, when determining the amount of Title IV aid to provide to the student as a credit balance during each payment period.

OPE’s guidance addresses questions raised by institutions about determining whether a charge for books and supplies is an institutional or non-institutional charge, particularly where an institution debits that account at the beginning of the student’s enrollment for the entire cost of books, supplies, and equipment (including the cost for kits) to be used throughout the program, how to properly determine the amount of prorated charges associated with a payment period, and things to consider for Return of Title IV purposes. Be sure to check out their Q&A for additional details too.

Institutional vs. Non-Institutional Charges

Prorating Institutional Charges

Return of Title IV Funds Considerations