MOST FREQUENTLY CITED PROGRAM REVIEW FINDINGS

A financial aid consultant can help your college identify risks and prevent program review findings

What are the most frequently reported program review findings according to ED?

ED recently released an updated program review guide packed with lot’s of great info to help schools and colleges understand the in’s and out’s of a program review. The new guide covers everything from general program review processes to procedures and guidelines for following up. According to the guide, these are the most frequently cited program review findings. 

These are the top ten most frequently cited program review findings at colleges and universities.

  • Crime Awareness Requirements Not Met
  • Verification Violations
  • Return to Title IV Calculation Errors
  • Student Credit Balance Deficiencies
  • Drug Abuse Prevention Requirements Not Met
  • Student Status – Inaccurate/Untimely Reporting
  • Entrance/Exit Counseling Deficiencies
  • Consumer Information Requirements Not Met
  • SAP Policy Not Adequately Developed and/or Monitored
  • Inaccurate Record keeping

How does your institution assess it’s risk and preparedness for audits and program reviews?

To learn more about how your institution can adjust its processes and reporting to minimize its risk of these federal student aid compliance issues, please contact us.


Get your 2018-2019 IRS Tax Return Transcript Matrix for ISIR Verification here!

STUDENT AID ELIGIBILITY WORKSHEET FOR FAFSA QUESTION 23

Some of the ideas put forth for Reauthorization of the HEA, include eliminating the drug-related eligibility questions on the FAFSA. Presently, students who report on their FAFSA that they were convicted of possessing or selling illegal drugs must complete the Student Aid Eligibility Worksheet for Question 23 to determine if they are eligible for Federal Student Aid. The 2020-2021 Student Aid Eligibility Worksheet for FAFSA Question 23 can be found here.

2020-2021 FAFSA PDF RELEASED

The 2020-2021 FAFSA PDF is here. The 2020-2021 FAFSA cycle began on Oct. 1 and the application is available for students and families to complete until June 30, 2021. The Free Application for Federal Student Aid (FAFSA) is the first step in the financial aid process. Students use the FAFSA to apply for federal student aid, such as grants, work-study, and loans. In addition, most states and colleges use information from the FAFSA to award nonfederal aid. FSA is pushing students to apply as early as possible, since some funds are limited, particularly funding from state aid programs which students also apply for through the FAFSA. Be sure to remind your students that some funds are limited, so it’s a good idea to apply as soon as possible

ED ANNOUNCES REVISED POLICY FOR STANDARD TERM LENGTH

For financial aid purposes, Standard Terms are by far the simplest to administer of all the academic calendar options. Over the years, academic calendars have evolved from the traditional academic calendar of a 15-week semester in the fall and a 15-week spring semester or its equivalent in trimesters or quarters, as a result of changes in curricula, new delivery modes, and innovative and flexible program schedules designed to meet the needs of students.

Institutions have been asking for flexibility to modify their terms to meet the Standard Term parameters for a long time. Programs got longer and scheduling longer programs became a challenge for institutions. In some cases, they found it simply wasn’t possible to arrange their coursework in way that would meet the criteria ED specified in its longstanding policy for Standard Term length.  Although Standard Terms don’t have a statutory or regulatory definition, the Department of Education’s policy narrowly defined what a Standard Term was and wasn’t. When a program doesn’t meet ED’s criteria for Standard Terms, we call those either nonstandard term or non-term programs. When an institution runs a program offered in a nonstandard term or non-term academic calendar, the rules for disbursing Title IV aid become much more complex.

“Yesterday’s announcement from ED is bigger news than most people realize because it gives institutions the flexibility to deliver innovative programs and specialized coursework while simultaneously simplifying the process of administering disbursements for those who make the change to standard terms.”

Under the department’s old policy, programs offered in credit hours but offered in terms that were either not substantially equal in length or longer than the maximum length promulgated in ED policy were required to be treated as nonstandard term programs. For many institutions, the revised policy ED released earlier this week provides them with much more flexibility to deliver education to their students in Standard Terms without the additional burden imposed on non-term and nonstandard term programs for administering Title IV aid.

Take Pell Grants for example. Standard Term programs base a student’s Pell Grant eligibility off a student’s enrollment status in each term (think, full-time, 3/4-time, half-time etc.), and the term start and end dates. But in Nonstandard Term programs you can’t simply base aid off enrollment status. Instead a student’s award must be multiplied by a fraction that represents the weeks of instructional time in the term divided by the weeks of instructional time in the program’s academic year. This is particularly important in programs that are at least an academic year in length and have a remaining portion of the program that is shorter than an academic year in length.

Things get a little more complicated when it comes to Direct Loans. For a term-based program using credit-hours, a student could receive a Direct Loan disbursement in the spring term even if they failed courses in the fall term, as long as the student was making satisfactory academic progress. However, if the program used nonstandard terms that are not substantially equal in length, they had to use the nonterm-based rules for Direct Loan disbursements and monitor annual loan limit progression accordingly. Those rules require that a student must successfully complete all the coursework in their payment period with a passing grade to receive a second or subsequent loan disbursement in the next term.

The administrative burden imposed on Financial Aid offices under the nonterm rules are onerous for institutions because of the increased monitoring and coordination needed to ensure that aid is properly awarded and disbursed to students.

It creates a problem for students too because failing coursework inevitably leads to delays in the institutions ability to release FSA funds to students. In this situation, a student, might not be able to receive their spring Direct Loan disbursement until the end of the spring semester.

Under the revised policy, terms that are not substantially equal in length can now be considered standard terms, and the number of weeks in any given term can even vary from year to year without affecting the standard term nature of a program. As a result, programs that disburse Title IV aid using nonstandard term rules, but can now meet the expanded criteria in the Department’s revised policy for standard term length, can use the new rules for standard terms if they choose to. Doing so can significantly reduce administrative requirements related to disbursing title IV, so it’s really something to look at closely.

While institutions have always had the flexibility to self-determine which academic calendar they are using for Title IV disbursement purposes (and the risk of liability if they made an incorrect determination on their own and disbursed aid under the wrong formula), yesterday’s announcement from ED is bigger news than most people realize because it gives institutions the flexibility to deliver innovative programs and specialized coursework while simultaneously simplifying the process of administering disbursements for those who make the change to standard terms under ED’s revised (expanded) Policy for Standard Term Length.


Institutions with questions pertaining to this or other matters of compliance with Accreditation, Federal Student Aid standards are welcome to contact our offices for additional assistance.

FINAL ACCREDITATION AND STATE AUTHORIZATION REGULATIONS RELEASED

The United States Department of Education published final accreditation and state authorization regulations in October. The rules which will govern accrediting agencies and how they accredit institutions, as well as state authorization rules for distance education providers will have two different effective dates. Most of the published regulations will take effect on July 1, 2020, however some of the provisions were scheduled for early implementation beginning on November 1, 2019.

600.2 – Institutional Eligibility

600.9 – State Auth – Religious Institutions

668.43 – State Complaint Process

668.50 – Institutional Disclosure for Distance Programs

The remaining regulations pertaining to the Department’s recognition of accrediting agencies, will take effect on July 1, 2021.

SUMMARY OF MAJOR POLICY CHANGES RELATED TO ACCREDITATION

  • Eliminate geography to determine an accreditor’s scope of recognition and clarify that institutional mission, rather than geographic location, should guide the quality assessment of an institution and its programs.
  • Affirm that accreditors must respect the mission of an institution of higher education that relies upon religious tenets, beliefs, or teachings.
  • Encourage institutions to evaluate the merit of transfer credits and prior learning assessment more fairly to reduce the need for students to take – and pay for – the same classes twice.
  • Allow accreditors to establish different methods of monitoring institutional success, based on the mission of the institution and the goals of its students.
  • Provide flexibility for accreditors to support innovation in higher education, recognizing that innovation has inherent risk, and monitoring the innovation carefully to intervene when student success is at risk.
  • Engage employers more directly in the evaluation of program quality and allow for institutional decision-making models that give employers a more prominent role in recommending program or curriculum updates.
  • Provide opportunities for accreditors to increase standards for accountability, while also providing an appropriate amount of time for institutions to make the changes needed to meet those standards.
  • Allow accreditors to take earlier action when institutions are struggling to require teach-out plans and permitting accreditors to permit teach-out agreements before a school announces its closure.
  • Reduce credential inflation, especially in programs that lead to a State license, to allow low income students the opportunity to pursue those occupations and to ensure that the cost of qualifying for work does not exceed a graduate’s likely earnings.
  • Reduce the time and complexity associated with approving an accreditor’s application for initial or renewal of recognition.

SUMMARY OF MAJOR POLICY CHANGES RELATED TO STATE AUTHORIZATION

  • Make clear that an institution must identify the State in which a student is “located” and, therefore, the State in which the institution must have authorization.
  • More clearly define State authorization reciprocity agreements and reaffirm that they meet the requirements of the State authorization regulations for States that elect to participate in them.
  • Expand consumer protections for students who are enrolled in programs that lead to occupational licensure, including those enrolled in ground-based courses or programs.
  • Reduce the disclosures that institutions must provide students to reduce the cost and burden of distributing them and increasing the chances that students will consider them.
  • Eliminate requirements for States to establish new or separate consumer complaint processes for students enrolled in distance learning programs, while providing other options to ensure consumer protection.
  • Enable institutions to determine the States for which it will determine occupational licensing requirements, while requiring institutions to report that information accurately to students.
  • Enable students to continue their education, even if work or military service requires them to move to a new State, and to allow students to complete internships with potential future employers, without adding new State licensing fees to their institutions.

Institutions with questions pertaining to this or other matters of compliance with Accreditation, Federal Student Aid standards are welcome to contact our offices for additional assistance.


ADEQUATE DOCUMENTATION REQUIRED IN PERKINS LOANS COLLECTIONS

Federal Student Aid recently published an electronic announcement informing schools that they really need to try to collect on their delinquent and defaulted Perkins Loans and must maintain good corroborating documentation of their efforts and activities. Although the Perkins Loan Program has ended, institutions are still expected to comply with the program rules outlined in the Higher Education Act. One of those rules requires institutions to maintain documentation of their collection efforts for defaulted loans. According to the EA, schools that don’t maintain acceptable records, may be required to assign the loans to the Department “without recompense”. In the Department’s view, “the fact that a loan has been in default for more than two years suggests a lack of compliance with the collection procedure criteria established by regulation.” Thus, unless an institution can demonstrate with adequate documentation that they have tried to collect on a defaulted loan in accordance with the HEA’s requirements, they will be required to assign those loans to the Department. The Department said they will begin notifying institutions to provide documentation on their collection efforts shortly.

Although institutions can now voluntarily assign Perkins loans, including those loans that have an acceptable collection record or are not in default, at any time, there are specific rules to follow when pursuing collection themselves.

If the institution, or the firm it engages, pursues collection activity for up to 12 months and is not successful in converting the account to regular repayment status, or the borrower does not qualify for deferment, postponement, or cancellation on the loan, the institution shall:
• Litigate in accordance with the procedures in § 674.46;
• Make a second effort to collect the account as follows:
o If the institution first attempted to collect the account using its own personnel, it shall refer the account to a collection firm.
o If the institution first attempted to collect the account by using a collection firm, it shall either attempt to collect the account using institution personnel, or place the account with a different collection firm; or
o Submit the account for assignment to the Secretary in accordance with the procedures set forth in § 674.50.
If an institution is unsuccessful in its efforts to place a loan in repayment after extensive collection efforts, it must continue to service the loan by making yearly attempts to collect from the borrower until the loan is
• recovered through litigation;
• assigned to the Department; or
• written off only if the outstanding principal, accrued interest, collection costs and late charges are within the allowable thresholds as prescribed under § 674.47(h) (loans with a balance of less than $25; or loans with a balance of less than $50 if the borrower has been billed for this balance for at least 2 years).

UPDATE ON PERKINS LOAN ASSET DISTRIBUTION AND REIMBURSEMENT

In an electronic announcement from the U.S. Department of Education’s Office of the Under Secretary, ED announced that they will be reimbursing institutions for the institutional share of Perkins Loan Service Cancellations from the Perkins fund later this year. Before the end of the year ED is expected to send a letter to institutions participating in the Perkins Loan Program information about the specific amounts, what procedures to follow and the applicable deadlines. Institutions should not remove and return any funds to the Department or the institution until the institution has been notified to do so. More information is in this electronic announcement.

COLLEGE FINANCING PLAN FOR 2020-2021 RELEASED

In January, the U.S. Department of Education’ s (ED) Office of Postsecondary Education (OPE) released a new beta-version of the 2019-2020 Financial Aid Shopping Sheet that was first introduced in 2012. After soliciting feedback from schools and stakeholders on the template earlier this year, the Office of Postsecondary Education has released a finalized form template which incorporates improvements based on the recommendations and feedback they received.

According to the OPE announcement, the Financial Aid Shopping Sheet was redubbed the “College Financing Plan” to “more accurately reflect that loans may be a significant part of the student’s investment, and to emphasize to students that they are making a financial transaction when enrolling in an institution.”

The College Financing Plan looks very similar to the Financial Aid Shopping Sheet institutions have been using for many years, but some of the information has changed a bit. For example, the new form template includes additional information about interest rates on each loan as well as new information about need-based and merit based scholarships, on campus versus off campus housing, and even additional clarity on the difference between grants, which don’t have to be repaid and loans, which do. The form has also been decluttered and simplified to make it easier to read and understand. Section headings have also been restructured to better illustrate a rather simple formula its predecessor didn’t do so well; Total Cost of Attendance – Grants and Scholarships = Net Cost.

Schools that signed the Memorandum of Understanding (MOU) to comply with the Principles of Excellence (POE) in Executive Order 13607 will be required to begin using the new format for the 2020-2021 award year once it is released however ED has not provided clarification as to when, and whether or not schools currently using the FA Shopping sheet need to adopt the College Financing Plan.

NACAC VOTES TO OVERHAUL ETHICAL CODE 

NACAC VOTES TO REMOVE PARTS OF ETHICAL CODE

It’s already old news but over the weekend, NACAC delegates and members voted almost unanimously to remove several key sections from the association’s Code of Ethics and Professional Practices bringing sweeping changes to the admissions and enrollment management landscape in higher ed. The vote was called to attempt to bring NACAC’s SPGP/CEPP into compliance with United States antitrust laws following a two-year investigation by the United Stated Department of Justice. NACAC hopes the changes, eliminating parts of their ethics code and made effective immediately will help bring the investigation to a conclusion and stem the threat of possible litigation in the future.

Competition is typically good for consumers because it gives them choices, options and keeps prices in check. Not to mention that it incentivizes businesses and institutions to offer higher quality products and services. The gist of the NACAC problem lies not only in the coordination undertaken by its members, but also in the ways that they prevented competition.

NACAC required its members to agree to use only certain prescribed application plans such as Early Decision, Regular Decision, Early Action and Rolling Admissions, and prevented them from circumventing those plans by recruiting out of the prescribed cycles. Their rationale was that this would ensure that high school students would benefit from a closely coordinated process that might be otherwise complex or confusing to prospective students and their families and colleges would be afforded some simple protection through a common admissions cycle and procedure.

NACAC built in protections for students so that they wouldn’t be coerced or pressured from other colleges to enroll or pay a deposit before the agreed upon deadline for each application plan, and colleges couldn’t offer special incentives to students to secure enrollment. According to NACAC, that gave students a reasonable amount of time to identify their college choices, complete applications of admission, compare financial aid offers and then make an informed decision.

Although NACAC’s primary concern is for students in the high school to college pipeline, they also prescribed rules for members related to transfer student recruitment. Given that it would be impractical to establish universal dates and deadlines for transfer students, NACAC members agreed not to solicit transfer students from each other and to keep their hands off previous years applicant and prospective student pools unless a student initiated contact first. As a result of the vote, all of these provisions have been removed.

Although NACAC voted to eliminate these rules from their CEPP, the Department of Justice is still expected to file a formal complaint and issue a consent decree which will ultimately require a federal court to decide how to proceed. Although this is a step in the right direction, there’s no guarantee that this situation is completely resolved. NACAC was keen to point out to its members that “Any agreement or understanding among separate institutions to continue the conduct prohibited by the consent decree may result in an antitrust investigation of those institutions.”

The last few days have left many who work in college admissions reeling as they began coming to grips with the gravity of the changes and the new landscape before them. Many expressed feelings of anger at the DOJ, while some expressed outright denial that anything will change on their campus. Still others have already begun to accept the changes and are actively seeking ways to realign their recruiting philosophies and strategies with the new rules of the game. While it’s natural to fear and even resist change, it’s important to recognize when a change has already occurred and to adjust accordingly. As Ken Blanchard wrote in “Who Moved My Cheese”, You can hem and haw, or sniff and scurry.

For context, here are the sections of NACAC’s CEPP which are expected to be deleted. *Note this is from the most recent CEPP dated September 2018 which does not include the revisions. NACAC has not yet published an updated CEPP since voting on September 28, 2019. Retrieved from: https://www.nacacnet.org/globalassets/documents/advocacy-and-ethics/statement-of-principles-of-good-practice/nacacs-code-of-ethics–professional-practices.pdf

Section II. The Responsible Practice of College Admission
A – Application Plans for First Time Undergraduates
vi – Early Decision
“Colleges must not offer incentives exclusive to students applying or admitted under an Early Decision application plan. Examples of incentives include the promise of special housing, enhanced financial aid packages, and special scholarships for Early Decision admits. Colleges may, however, disclose how admission rates for Early Decision differ from those for other admission plans.”

Section II. The Responsible Practice of College Admission
B – Admissions Cycle Dates, Deadlines and Procedures
“Once students have committed themselves to a college, other colleges must respect that choice and cease recruiting them. Similarly, colleges need protection when other institutions pressure students to submit applications or enrollment deposits before established deadlines or when they continue to solicit applications or enrollments after students have finalized their college decisions”.

Section II. The Responsible Practice of College Admission
B – Professional Conduct
5: “Colleges will not knowingly recruit or offer enrollment incentives to students who have already enrolled, registered, have declared their intent, or submitted contractual deposits to other institutions. May 1 is the point at which commitments to enroll become final, and colleges must respect that. The recognized exceptions are when students are admitted from a wait list, students initiate inquiries themselves, or cooperation is sought by institutions that provide transfer programs. These statements capture the spirit and intent of this requirement.
a. Whether before or after May 1, colleges may at any time respond to a student-initiated request to reconsider an offer or reinstate an application.
b. Once students have declined an offer of admission, colleges may no longer offer them incentives to change or revisit their college decision. Before May 1, however, colleges may ask whether candidates would like a review of their financial aid package or other incentives before their admission is canceled, so long as the question is asked at the time that the admitted students first notify them of their intent to cancel their admission.
c. After May 1, colleges may contact students who have neither deposited nor withdrawn their applications to let them know that they have not received a response from them. Colleges may neither offer nor imply additional financial aid or other incentives unless student have affirmed that they have not deposited elsewhere and are still interested in discussing fall enrollment.”

Section II. The Responsible Practice of College Admission
D Transfer Admission
5: “Colleges must not solicit transfer applications from a previous year’s applicant or prospect pool unless the students themselves initiated a transfer inquiry or the college has verified prior to contacting the student that they are either enrolled at a college that allows transfer recruitment from other colleges or are not currently enrolled in college.”

DIRECT LOAN ORIGINATION FEES EFFECTIVE OCTOBER 1, 2019

Did you update your loan origination fees yet?

Before you send your next batch of disbursements, make sure your financial aid management system is up to date with the new loan origination fees that went into effect on October 1st or they’ll bomb out on the Common Origination and Disbursement website. Because of the Budget Control Act of 2011, which was enacted to prevent the United States from breaching the “debt-ceiling” sequestered funds from federal agencies to keep the budget in balance. When the federal government begins their federal fiscal year each October 1st, origination fees on direct loans change as a result. The sequestration law isn’t set to expire until 2021.

Beginning on October 1, 2019 the loan origination fees have gone down slightly. For Federal Direct Loans where the first disbursement is made on or after October 1, 2019, and before October 1, 2020 the origination fees are as follows:
• The loan fee for Direct Subsidized Loans and for Direct Unsubsidized Loans is 1.059%. For example, the fee on a $5,500 loan will be $58.24.
• The loan fee for Direct PLUS Loans (for both parent borrowers and graduate and professional student borrowers) is 4.236%. For example, the fee on a $10,000 PLUS Loan will be $423.60.

Sequestration doesn’t just impact Federal Direct Loans, it impacts other aid programs such as the Iraq – Afghanistan Service Grant Program and TEACH Grant Program.

The Iraq-Afghanistan Service Grant was reduced by 5.9% for FY 20 resulting in a reduced award of $5829.50, a slight increase from last year. The TEACH Grant was also reduced by 5.9% resulting in a maximum award of $3764.00, also a slight increase from last year.

For more information about these programs, check out this electronic announcement from Federal Student Aid.

2018-2019 GAINFUL EMPLOYMENT REPORTING DEADLINE

If you were one of the institutions that chose not to implement the rescinded Gainful Employment rules early, you must still comply with the 2014 GE rules. As such, these institutions must report GE data to NSLDS by October 1, 2019. Everyone else, can relax. For more info about the 2018-2019 Gainful Employment Reporting Deadline, check out Gainful Employment Electronic Announcement 123.