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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!

DRAFT 2020-2021 FISAP MATERIALS RELEASED

Federal Student Aid recently released draft versions of the 2020-2021 FISAP, accompanying instructions and updated Technical Reference to help schools prepare for the upcoming FISAP due on October 1, 2019. Although the final documents won’t be published until August 2019, schools can use these draft documents to begin preparing the information needed in October. For more information check out the recent electronic announcement from FSA here.

Changes to the FISAP

In addition to award year and date references, the following FISAP fields have been updated and/or added:

Part I, Section A, Field 5

Two new data fields have been added to Field 5 to include the Federal Supplemental Educational Opportunity Grant (FSEOG) and Federal Work-Study (FWS) amounts allocated to each additional eligible institution for the 2018–19 reporting year.

Part III, Section B, Fields 1–8

Fields 1–8 have been updated to no longer allow for data entry on new loans due to the expiration of the authority to award new Federal Perkins Loans (Perkins Loans).

Part III, Section B, Fields 12 & 13

Fields 12 and 13 have been added to collect data on permissible servicing costs and cancellation reimbursement, if applicable, respectively.

Part VI, Section A, Fields 1a–26a & 1b–26b

Federal Perkins Loan Recipients (column a) and amount of funds (column b) fields have been updated to no longer allow for data entry due to the expiration of the authority to award new Perkins Loans.

Changes to FISAP Instructions

In addition to updates to the annual award year, date references, acronyms, and hyperlinks, the following changes have been made to the FISAP Instructions:

All

Updates have been made throughout the instructions to address the expiration of the authority to award new Perkins Loans and all impacted fields that will no longer allow for data entry as a result.

Introduction to the FISAP

The due date for the FISAP has been updated to Monday, October 1, 2019, and the correction deadline has been updated to December 13, 2019. Clarification has been added on the requirements around reporting for additional eligible institutions on a single FISAP (Part I, field 5).

Part I, Identifying Information, Certification and Warning

Clarification has been added about FISAP signature submission requirements. Instructions have been added for new data fields required in Part I, Section A, field 5 when reporting for additional eligible institutions.

Part III, Section B

Clarification has been added on the loan assignment process for cases of total and permanent disability. Instructions have been added for the new Fields 12 and 13, to report servicing costs and loan cancellation reimbursements received.

Parts IV & V

Removed paragraphs about reporting prior year recoveries on the FISAP, so as not to repeat or conflict with guidance provided in Volume 5 of the Federal Student Aid Handbook.

Parts VI, Section B

Clarification has been added around claiming and reporting administrative cost allowance (ACA).

2019-2020 FINAL FUNDING AUTHORIZATIONS FOR THE CAMPUS-BASED PROGRAMS

The Final Authorizations for the 2019-2020 Campus-Based programs have been posted to the Department’s COD website (not eCB anymore). Awards for each Campus-Based program in which a school participates is reflected in the school’s 2019-2020 Statement of Account.

Each institution that applied for funds under the Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), and/or Federal Perkins Loan (Perkins Loan) programs for the 2019-2020 Award Year receives a tentative funding level which is based on a Base Guarantee and a Fair Share Increase. However, if the amount of unexpended 2017-2018 funds exceeds 10% of the institution’s 2017-2018 allocation and no waiver for that unexpended amount was approved, the allocation is reduced by the unexpended amount. The final funding worksheets posted on the COD website will show the information that was used in the calculation of each school’s 2019-2020 Campus-Based allocations.

The total 2019-2020 federal funds available for allocation to schools under the FWS, FSEOG, and Perkins Loan programs are as follows:

Program           Total Federal Funds Available for Allocation to Schools

FWS                  $1,130,000,000

FSEOG              $840,000,000

For more information about the 2019-2020 Final Funding Authorizations read the Department’s Electronic Announcement Here.

FINAL GAINFUL EMPLOYMENT COMPLETERS LISTS AND DRAFT CORRECTION RESULTS RELEASED

The Memorandum Of Understanding (MOU) between the Social Security Administration and the Department of Education that allowed the two agencies to share earnings data expired last year. As a result, ED cannot calculate the Debt-To-Earnings Rates (D/E) that would be used measure program outcomes and to impose sanctions on schools and colleges under the current Gainful Employment rules.

Although the MOU hasn’t been renewed, rendering the calculations useless, the Gainful Employment rules are still in effect. Last month Federal Student Aid distributed the Final Gainful Employment Completers Lists and Draft Gainful Employment Lists Corrections Results to institutions via NSLDS and institution’s SAIG mailboxes. Although the deadline for corrections expired on July 13, 2018 and no additional corrections may be submitted, schools can access this data to see the outcome of their corrections if they submitted one. For more information about this data check out Gainful Employment Electronic Announcement 118 here.

2018-2019 VERIFICATION REPORTING AND VERIFICATION STATUS CODE “W” WARNING MESSAGE

As the 2018-2019 award year nears its end for many schools, the Department has begun its annual sweep of, outstanding verification status codes on the COD website. Although the regulations on interim disbursements changed to limit the scenarios under which a FAO can submit an interim disbursement on a student’s Pell award several years ago, there are still a few times when it is appropriate to do so. When this occurs, disbursement information is typically reported to COD with a verification status code of “W”, for any interim disbursements that have been made. For all other recipients selected by the CPS the FAO will either report a “V” for applications which have been verified or for those which were selected but never verified simply “S”. Schools must verify all applicants that were selected by the CPS must report one of these statuses for each student unless they meet one of the exemptions (i.e. student never enrolls, dies etc.). If you didn’t report all your verifications by April 24, funds were automatically deobligated and on April 24 and reduced to zero ($0.00) on COD for anyone still in a W status. Since your school’s CFL on G5 is driven by disbursements, your CFL was likely reduced too.

Institutions with year-round rolling admissions and non-term courses often package students from the current award year right up to June 30 each year. As a result, many students who begin their program in the spring or early summer may be within the allowable timeframes for submitting verification documents and completing the verification process. In those cases, and in accordance with the allowable timeframe in the Federal Register notice, the school may resubmit a disbursement record with a value greater than zero ($0.00) until October 1, 2019. Otherwise, verification documents typically must be reviewed by the institution no later than September 21, 2019 or 120 days after the students last date of enrollment for the 2018-2019 award year or whichever is earlier. Remember for students selected for verification tracking groups V4 and V5, institutions must submit identity and high school completion status verification results no later than 60 days after the student was first selected for verification.

FSA RECOMMENDS EIGHT TIPS FOR ISSUING FINANCIAL AID OFFERS

Award Letters, Shopping Sheets, Financing Plans, and Financial Aid Offers have been criticized for confusing and inconsistent terminology, varying formats, and a lack of transparency about price. There’s been a big push in recent years to get everyone on the same page and agree on standard terminology and format leading Federal Student Aid to provide eight recommendations for making “financial aid offers” to students.

According to a recent electronic announcement from Federal Student Aid, these tips will help improve clarity, transparency and basic understanding of financial aid offers that will allow students nd families to make informed decisions leading to increased enrollment, persistence, completion and successful repayment of student loans.

What Postsecondary Institutions Should Work to Avoid When Issuing Financial Aid Offers

  1. Avoid calling your financial aid offer an “award” and avoid calling it a “letter.” Loans are not awards. Work-study is not an award, it is the potential for employment that offers earnings to students. Using a term like “financial aid offer” or “college financing” is clearer. Given that many institutions deliver these offers via electronic communication, calling them “letter” can also be confusing.
  2. Avoid issuing a financial aid offer that does not include cost of attendance. For any student and/or family to be able to make an informed decision, the amount of aid received must be compared to the total cost of attendance in order to determine the student/family financial contribution.
  3. Avoid listing the cost of attendance without breaking it down into clear components. For students and families to be able to plan how to cover costs, the provided cost of attendance needs to be transparent about what is and is not included. While basic needs like food and shelter are critical, other keys costs such as books, supplies, medical insurance and transportation also need to be anticipated as students and families determine if a school is a financial fit for them.
  4. Avoid listing grant and/or scholarship aid, loans, and work-study together. Listing grant and/or scholarship aid, loans and work-study together can lead students and families to confuse the terms and their specific requirements. Listing them separately makes it clear what is a loan (needs to be paid back) what is a grant or scholarship (does not need to be repaid), and what constitutes as work-study (must be earned by securing a job and working to receive it).
  5. Avoid listing student loans without clarifying the source (federal, state, institutional, or private). Federal student loans come with important protections for students and families, and often lower long-term interest rates. Accurately titling loan sources helps students identify which loans come with these protections.
  6. Avoid listing Parent PLUS loans with student loans. Parent PLUS loans are different than student loans and involve higher risk. Repayment starts immediately for parents who borrow PLUS loans, not after the student graduates from college, and PLUS loans include higher origination fees and interest rates. In addition, a parent must have no adverse credit history to qualify. Separate PLUS loans from student loans and make it clear how the requirements for these loans are far different than other loans and further application is required to confirm eligibility.
  7. Avoid issuing a financial aid offer without CRITICAL next steps. Especially for first-generation families, the financial aid process can be intimidating, often with deadlines and fees that are not intuitive. Along with the financial aid offer, include the specific next several steps that a student/family should follow to accept or decline financial aid.
  8. Avoid issuing a financial aid offer without net cost calculated. Net cost is the difference between the total cost of attendance (COA) and all grant/scholarship aid received. Not including net cost is confusing to students and families and makes comparing financial aid offers very difficult, if not impossible.

Last year uAspire and New America partnered to make recommendations for transparent award letters. They reviewed over 11,000 award letters from 500 different colleges and came up with recommendations for stakeholders to consider. This past March, Senator Chuck Grassley (R-AI), Tina Smith (D-MN) and Joni Ernst (R-IA) introduced the “Understanding the True Cost of College Act”,  which aims to standardize financial aid offers by mandating language, terminology and format.  NASFAA provided a nice mock up of what that might look like here: https://www.nasfaa.org/uploads/documents/Grassley_Bill_MockUp.pdf

 

NEGOTIATED RULEMAKING SESSIONS END IN CONSENSUS

Since the beginning of the year negotiators have been hammering out new rules for Higher Education “Accreditation and Innovation” and last month, negotiators announced they reached consensus after reaching a compromise on the proposed language which the negotiators voted on and unanimously approved. Last month, the Department of Education released “draft consensus language” that if finalized by November 1, 2019 will take effect by July 2020.

The scope of ED’s proposed plan covered a wide range of issues including proposed changes to Accreditation, Credit hour definition, Byrd Scholarship, Teach Grants, Religious Freedom, Distance Education, Competency Based Education, and State Authorization. You can read the draft consensus language in the links below.

Consensus Language 34 CFR Part 600

Consensus Language 34 CFR Part 668

Consensus Language 34 CFR Faith-Based Entities General

Consensus Language 34 CFR Part 602 and 603

Consensus Language 34 CFR Part 686

The Department of Education is expected to release proposed regulations within a few months and give the public an opportunity to provide feedback and comments before releasing final rules.

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.