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.


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FEDERAL WORK-STUDY PROGRAM COMMUNITY SERVICE WAIVER REQUESTS

 

Under certain exceptional circumstances a school can request a waiver of the requirement to expend at least 7% of their Federal Work Study Allocation to pay the federal share of wages to students employed in community service jobs in an award year, or for employing one or more of the school’s FWS students as a reading tutor for children in a reading tutoring project or performing family literacy activities in a family literacy project as required by the program regulations. A school that fails to meet one or both of the FWS community service requirements may be required to return FWS federal funds, subject to a substantial fine, and/or subject to other sanctions, including a Limitation, Suspension, and Termination or denial of future participation in the FWS Program, and possibly other Title IV, HEA programs.

Federal Student Aid recently announced the process for requesting Federal Work Study Program Community Service Waivers for the 2019-2020 year and gave some examples of circumstances where schools have been approved for a waiver of the requirements in the past.

Schools that can demonstrate an exceptional circumstance may be eligible to have their community service requirements waived. The deadline for electronic submission of a school’s 2019–20 FWS Community Service waiver request is 11:59 p.m. Eastern time (ET) on Monday, April 22, 2019.  Completed submissions must be accepted by the COD system by midnight ET. A waiver request that is received after April 22, 2019 will not be considered.

Examples of exceptional Circumstances for FWS Community Service Waiver Requests

Small FWS Allocation – The school had a very small FWS allocation. The supporting information submitted by the school noted that seven percent (7%) of the school’s allocation only provided enough funds for a student to work in a community service job for a short period of time. Therefore, the school was unable to find placement for a student in a community service job.

Rural Area – The school is in a rural area that is located far from the type of organizations that would normally provide community service jobs. The school provided information that showed that its students lacked the means of transportation to get to the location of the community service jobs. In a similar waiver request in which transportation did exist, a school provided documentation that showed that the transportation costs were extremely high for the students.

Specialized Program – The school offered only a single program of specialized study that required its students to spend extensive amounts of time in classroom and non-classroom academic activities. The school provided information that demonstrated that this specialized educational program did not allow its students to have time for performing community service jobs at the time those work opportunities were available.

Institutional Charges vs. Non-Institutional Charges

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.

The Department’s longstanding guidance has been that a charge for books and supplies must be considered an institutional charge if a student does not have a real and reasonable opportunity to purchase the required course materials from any other source but the school. A student has a “real and reasonable” opportunity to obtain required course materials from another source if:

The required course materials are available for purchase at a relatively convenient location unaffiliated in any way with the institution; and

The institution does not restrict the availability of financial aid funds, so the student can exercise the option to purchase the required course materials from alternative sources in a timely manner.

If students do not have a real and reasonable opportunity to obtain the required books, supplies, and equipment from another source, the institution must ensure that it meets the requirements found in 34 CFR 668.164(c)(2) for including those items in tuition and fees, e.g., having an arrangement with a book publisher or other entity that enables it to make those books or supplies available to students below competitive market rates.

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

Prorating Institutional Charges

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.

If an institution routinely debits students’ ledger accounts for the amount of the charge for books, supplies, and equipment along with tuition and fees, it is an institutional charge. FSA considers all institutional charges to be part of a student’s tuition and fees for the purposes of implementing the regulations found in 34 CFR 668.164(c)(1)(i) relating to the crediting of a student’s account. The regulations provide a specific formula for prorating charges if an institution assesses charges for more than a payment period at a time. For programs with substantially equal payment periods where the institution charges up-front for the whole program, total institutional charges, including any books, supplies or equipment charges, must be divided by the number of payment periods in the program. For other programs, the institution must divide the number of credit or clock hours in the payment period by the number of hours in the program and multiply the result by the total institutional charges for the program.

Regardless of whether the institution charges for other types of tuition and fees by the payment period, the cost of books, supplies, and equipment (including kits) must be prorated when determining the amount of Title IV aid to credit for a given payment period if students do not have a real and reasonable opportunity to purchase the books, supplies, and equipment elsewhere and those items are intended for use over a greater timeframe than a payment period. In cases where an institution charges tuition and fees by payment period, but is required to prorate the cost of books, supplies, and equipment over more than one payment period, the institution should add the cost of the books and supplies prorated under the regulatory formula to the tuition and fees it charges for the payment period when determining the amount of Title IV aid to credit to the student’s account for that payment period and the amount to provide to the student as a credit balance.

Return of Title IV Funds Considerations

 

Unless an institution receives funds under the reimbursement or heightened cash management monitoring payment methods, a student or parent may provide an optional authorization for the institution to hold his or her Title IV credit balance refund under 34 CFR 668.165(b)(1)(ii). Under that authorization, the institution may retain Title IV funds in excess of the prorated amount. If this occurs and the student subsequently withdraws from a non-term program measured in either clock or credit hours, under 34 CFR 668.22(g)(3) the institution must use as “institutional charges” in Step 5 of the Return of Title IV Funds calculation, the greater of:

The prorated amount of the student’s institutional charges as determined under 34 CFR 668.164(c)(5); or

The amount of Title IV funds that the institution retained as of the student’s withdrawal date, which may exceed the prorated amount as a result of the student or parent’s authorization for the institution to retain those funds.

Additionally, when a student withdraws, the Department’s longstanding guidance limits the amount of the Title IV aid that an institution must return to the Department for aid credited for certain types of unreturnable equipment, even if charges for such equipment would otherwise be considered an institutional charge under 34 CFR 668.164(c)(1)(i). When performing a Return of Title IV Funds calculation, an institution may exclude from institutional charges the total documented cost of unreturnable equipment and the documented cost of returnable equipment if not returned in good condition within 20 days of withdrawal. Note that the amount that may be excluded is the amount that the institution actually paid for the materials, not necessarily what it charged students to purchase them.

WHAT SIGNATURES ARE CONSIDERED VALID FOR PRINTED FAFSA SIGNATURE PAGES

Although most applicants for Federal Financial Aid complete the FAFSA® electronically using either FAFSA® on the Web or the myFAFSA mobile app, students still have the option of completing a paper FAFSA®. The Paper FAFSA and in some cases Student Aid Report (SAR) are simply signed the old-fashioned way, using a device called a pen (Sorry, couldn’t resist). Then, signed signature pages are mailed to FSA for processing.

Recently, Federal Student Aid published an Electronic Announcement about the general rules and requirements financial aid administrators should follow when assessing the validity of student and parent signatures on fafsa.gov paper signature pages.

According to their announcement, when FSA receives a paper signature page via U.S. mail, the signature page is evaluated to determine if signatures are valid before they are designated as received in the system. Signature pages are rejected if they do not contain applicant or parent signatures OR if the signatures on the page do not meet specific rules and guidelines. For example, the student signature should match the student name printed on the signature page. The parent signature should be from one of the individuals whose information was provided in parental FAFSA® data fields. Signature pages must also contain an original signature (no photocopies of signatures are acceptable).

FSA says, there are a few common reasons paper signature pages can be rejected.

  • Last name or first name only, unless student or parent has indicated he/she has only one name (i.e., signature page only shows one name for student or parent and there is a notation on the form by student or parent that indicates they only have one name);
  • Initials only (i.e., “JHS”);
  • Typed or stamped name;
  • Photocopied signature;
  • The words “father,” “mother,” or “dead” instead of signature;
  • Comments like “none” or “not applicable”; and
  • Signature of a legal guardian.

So, what constitutes a valid signature on the signature page?  FSA says a valid signature requires a minimum of a title, first name or initial, and a last name. Acceptable signature examples for an applicant or parent named “June H. Brown” include Mrs. Brown, June Brown, J.H. Brown, J. Brown, or J.H.A. Brown. The only exception is when the student or parent only has a first name or last name and indicates this in writing on the signature page. Additional acceptable and valid signature types include the following:

  • An X, thumbprint, fingerprint, or mark will be construed as a legal signature if noted as such on the document, as long as it is also noted and supported by one witness.
  • Printed (non-cursive) signatures are accepted.
  • Signatures that run together with no spaces (i.e., “JaneSueDoe”) are accepted.
  • Signature accompanied by a power of attorney document is acceptable, provided power of attorney is not limited. If power of attorney is questionable, the signature page is referred to Federal Student Aid for further evaluation.
  • A signature from an FAA or a high school counselor is an acceptable substitute for a parental signature if due to one or more of the following:
  • Parent(s) is not currently in the U.S., and unable to be contacted by normal means of communication.
  • The whereabouts of the parent(s) is unknown.
  • Parent(s) is mentally or physically unable to sign.

Note: A parenthetical or attached note indicating why the FAA or counselor has signed on behalf of the parent is required for this to be considered a valid signature.

Do not include any other documentation with the mailed signature page unless noted above.

FSA offered two additional pieces of information to the financial aid community. First, for the 2019-2020 school year, signature pages should be mailed to:

Federal Student Aid Programs

P.O. Box 7656

London, KY 40742-7656

And finally, if the FAFSA® form is rejected due to missing signatures, the applicant can contact the Federal Student Aid Information Center (FSAIC) at 1-800-4-FED-AID (1-800-433-3243) to request a copy of the Student Aid Report (SAR), which can be signed, as needed, and mailed back to process the required signatures.

IPEDS SPRING SURVEY DEADLINE

Institutions are required to submit data to the National Center for Education Statistics for the IPEDS Spring Survey. This survey focuses on Fall Enrollment, Finance, Human Resources, Academic Libraries and closes on April 10, 2019.

The completion of all IPEDS surveys, in a timely and accurate manner, is mandatory for all institutions that participate or are applicants for participation in any Federal financial assistance program authorized by Title IV of the Higher Education Act of 1965, as amended. The completion of the surveys is mandated by 20 USC 1094, Section 487(a)(17).

FSA TO IMPLEMENT ENHANCEMENTS TO THE FSA ID

Students, parents, and borrowers use their FSA ID to access websites and applications such as fafsa.gov, the myStudentAid mobile app, StudentLoans.gov, NSLDS Student Access, StudentAid.gov, the Application for Borrower Defense to Loan Repayment, and the Federal Student Aid Feedback System. As part of Federal Student Aid’s (FSA) initiative to implement the Next Generation (Next Gen) Financial Services platform, they will be providing enhancements to improve the functionality of the FSA ID. These changes are scheduled to take effect on April 14, 2019. The changes include the ability for users to log in to FSA systems using their mobile phone number, new user messaging, changes to the password requirements and other changes to make the process more streamlined and flow better.  These changes are expected allow users to manage their FSA ID account more effectively, provide enhanced navigation, and strengthen security. In a recent electronic announcement FSA, provided more information about the upcoming FSA ID enhancements.

Log In with Verified Mobile Phone Number

Following implementation of this enhancement, FSA ID users will be able to log in with a verified mobile phone number as an alternative to a username. Currently, FSA ID users may log in with a username or verified email address. This enhancement recognizes that some FSA ID users may prefer the use of a mobile phone over email and provides greater flexibility for students, parents, and borrowers.

To take advantage of this new option, the user must first register his or her mobile phone number on the FSA ID website if he or she has not already done so. Approximately one third of all FSA ID accounts already include a verified mobile phone number.

The process to register a mobile phone number is as follows:

When creating or updating an FSA ID account, the user will be asked if he or she wants to register a mobile phone number. If the user agrees, he or she will enter the mobile phone number. Note that for security purposes, a mobile phone number can only be associated with one FSA ID.

To verify the number, a secure code will be texted to the mobile phone. The text may take a few minutes to arrive.

The user must then enter the secure code within 30 minutes on the verification page on the FSA ID website and select “Submit.”

Once the mobile phone number has been verified, it can be used to reset a password, retrieve a username, or unlock an FSA ID account. After implementation of this enhancement on the websites and applications that require an FSA ID, the verified mobile phone number can also be used to log in.

A user may choose to change the mobile phone number at any time by logging in to the “Manage My FSA ID” page on the FSA ID website.

FSA will also implement several other changes to the FSA ID website to allow users to manage their FSA ID account more effectively, provide enhanced navigation, and strengthen security:

New User Messaging

Updated messaging will warn users who enter an email address domain type of .edu, .k12, .pvt, .tec, or .cc that they should include an email address to which they will not lose access (after graduation, etc.).

Additional messaging will warn users when their account is about to be locked. The warning will indicate how many log-in attempts remain so students don’t get accidentally locked out and to prevent brute force password hacking attempts.

Updated Password Requirements

Remove the 18-month password update requirement. A password change will be required only after a security event.

Remove the requirement for special characters in an FSA ID password. However, we will allow additional special characters in the password field for users who wish to use special characters.

FSA TO IMPLEMENT MYFAFSA ENHANCEMENTS

Federal Student Aid’s (FSA) myFAFSA mobile app is getting a few enhancements this month to improve user experiences. The enhancements include new user messaging edits, an update to the signature process and increased protection of Personally Identifiable Information (PII). The changes are scheduled to be released on April 14th, 2019. In a recent electronic announcement FSA, shed some light on the upcoming implementation of the myFAFSA enhancements.

User Messaging

Generally, when an edit is triggered on myFAFSA, the messaging that a user sees displayed as a result of the edit is the same, regardless of whether the user is the student, the parent or a preparer. Beginning April 14, 2019, FSA will be customizing the messages that users see when an edit is triggered, based on the role of the user. For example, if someone is logged in to myFAFSA as the student, the edit messaging that displays will be tailored to a student role. This will provide a more personalized user experience, regardless of the role under which someone is logged in to myFAFSA.

Signature Process Update

During the current myFAFSA signature process, users are instructed to provide a “swipe” signature (manual signature using a finger on the screen) prior to submission of the FAFSA® form. Based on specific customer feedback about the ease of the signature process, FSA will be removing the “swipe” signature from the signature process. Users will no longer be instructed to provide a touch signature and will now have the opportunity to provide active agreement to the terms and conditions on the Agreement of Terms view.

Masking of Social Security Number

As part of our ongoing effort to maintain a secure experience for applicants and their families, FSA will begin masking the Social Security Number (SSN) field on the Student Identifiers view. This view displays when a user is logged in under the parent or preparer role to allow for identification of the student to whom the FAFSA® form belongs. The user will have the ability to check a box and either hide or show the SSN. The SSN field will be masked by default.

DIRECT LOAN CLOSEOUT INFORMATION FOR 2017-2018 PROGRAM YEAR

DIRECT LOAN CLOSEOUT INFORMATION FOR 2017-2018 PROGRAM YEAR

On February 5, 2019, Federal Student Aid posted on the Information for Financial Aid Professionals (IFAP) website the first in a 3-part series of Direct Loan closeout announcements that informs schools of the closeout deadline for the 2017-2018 Program Year. The Direct Loan closeout deadline for the 2017-2018 Program Year is Wednesday, July 31, 2019. This is the last processing day of the program year, so all school data must be received and accepted by this date to be included in a school’s final Ending Cash Balance for the year. To be considered successfully closed out, a school must:

Have an Ending Cash Balance of $0 and Total Net Unbooked Disbursements of $0 internally, and as reflected on the School Account Statement (SAS), and Complete the Balance Confirmation form on the COD Web Site.

According to FSA, the best way to ensure an easy reconciliation and closeout is by staying on top of the process. They offer this advice:

  • Complete required monthly reconciliation. This should include:
    • Internal reconciliation – compare internal student accounts and Business Office/Bursar records with Financial Aid Office records. Also, a part of the reconciliation should include ensuring that the school’s internal records match the third-party servicer’s records as well as what is in the COD System.
    • External reconciliation – compare internal records to your Direct Loan School Account Statement sent via your SAIG mailbox.
    • Resolution of any discrepancies and documentation of any outstanding timing issues.
  • Ensure that all drawdowns and refunds of cash are accounted for and applied to the correct program and award year.
  • Ensure that all batches have been sent to and accepted by the COD System, all disbursements and adjustments are accurately reflected on the COD System, and all responses are imported into the school’s system.
  • Review all pending disbursements and determine whether the disbursements need to be reported as actuals (Disbursement Release Indicator (DRI) = TRUE) or, if not, reduce them to $0 and make changes to loan period dates and loan amounts, if needed. This will ensure that all disbursement data has been correctly reported to the COD System, and will ensure subsidized usage limit calculations are correct for your borrowers. For more information on Subsidized Usage Limit Applies (SULA) reductions.
  • Ensure that all unbooked loans are booked or inactivated (reduced to $0).
  • Resolve all outstanding rejected records.
  • Return all refunds of cash. All refunds for the Direct Loan Program must be returned electronically via G5.
  • Request any remaining funds owed to the school based on actual disbursements accepted by the COD System.

 

For more information, refer to the Electronic Announcement.