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!

TFA TOKENS MUST NOT BE SHARED BY MULTIPLE FSA USER IDS

Do people really have to be told that they can’t share TFA tokens? Seems that way. FSA is “reminding” institutions that TFA tokes used for logging into FSA systems and websites must NOT be shared. According to FSA only one authorized user is permitted per token.
Actually FSA notes that “in most cases, a TFA token that has multiple FSA Users IDs assigned to it is not being shared by multiple users but appears to be, either due to the token being inherited by a new employee, an employee changing his or her name, or other more uncommon situations. The Primary DPA should work with us to determine the best solution for these situations and ensure only one authorized user is registered to each TFA token.”
If ED suspects that users are sharing tokens, they’ll email your institution’s Primary Destination Point Administrator and probably make you order more tokens. ED does caution institutions however, stating that if institutions don’t respond they’ll remove access to FSA systems for affected users.

NEXT GEN FSA WEBSITE LAUNCHES

Federal Student Aid’s Next Gen website has launched, and it looks pretty slick. Last month FSA combined StudentAid.gov, StudentLoans.gov, FSAID.ed.gov, and part NSLDS.ed.gov student access into one website – StudentAid.gov. All of the functions found in these websites has been consolidated and with the exception of FSAID and NSLDS which will remain operational in the short term, the old sites redirect to the new one. While this is just the first step in what ED hopes will be a better aid delivery system for students, parents, borrowers and even aid administrators, more functionality will be rolled out in the coming year. Check out the details in this video ED posted on YouTube.

FSA also announced training for Financial Aid professionals to introduce the functions of the new platform – the first in the series shows you how to log in. Check it out but be sure to use a supported browser like Firefox or Safari.

 

AUTOMATIC DISCHARGES COULD MEAN BIG LIABILITIES FOR CLOSED SCHOOLS

Federal Student Aid is getting ready to begin issuing Automatic Closed School Loan Discharge Liabilities to schools that have abruptly closed and displaced students. The rules for automatic closed school discharges were part of the 2016 Borrower Defense To Repayment regulations which ED implemented in December of 2018. Under those regulations FSA will determine which borrowers are eligible and grant discharge of their loans automatically. According to FSA, automatic discharges will be approved if a borrower was enrolled when a school closed or within 120 days of an institution closing, as long as the borrower did not enroll at another Title IV eligible school within three years.
These rules apply to all borrowers who obtained a federal title iv loan after November 1, 2013, including Direct Loan borrowers, PLUS Loan borrowers and Perkins Loan borrowers.

 

DETERMINING THE LENGTH OF A SCHEDULED BREAK

Understanding NSLDS Enrollment Reporting

Autumn and Winter holiday breaks present unique challenges for institutions when students withdraw from school. Once a student’s withdrawal date is determined, a school needs to calculate the percentage of the payment period or period of enrollment the student completed to determine the percentage of Title IV Federal Student Aid funds the student earned. It’s common for schools to schedule holiday breaks lasting five or more days during Thanksgiving under most academic calendars and Winter Breaks in non-term and nonstandard term calendars. Institutionally scheduled breaks of five or more consecutive days are excluded from the Return to Title IV (R2T4) calculation as periods of nonattendance. Errors made when determining the length of a scheduled break lead to errors in the amount of aid students are eligible for.

Determining the length of a scheduled break

Step 1 – First determine the last day that class is held before the scheduled break. The scheduled break begins on the next day.

Step 2 – Next determine the last day of the scheduled break. The scheduled break ends on the day before classes resume.

Step 3 – Count the days.

REMEMBER – If your institution’s academic calendar schedules classes that end on a Friday, but don’t resume until the Monday after the break your break may be up to nine days long. Once you’ve properly determined the length of your scheduled break, you can subtract it from the numerator and denominator of the R2T4 calculation, ensuring that your calculations yield the proper amount of aid for withdrawn students.

Knowing what to watch out for can help you avoid compliance problems.
R2T4 errors are one of the top three audit and program review findings at institutions each year. R2T4 errors related to academic calendars and scheduled breaks are often systemic because the schedule itself affects all students.


Institutions with questions about Title IV and compliance with Federal Regulations related to Federal Student AId Programs are welcome to contact our office for assistance.

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.