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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.

INCREASED CIVIL MONETARY PENALTIES

INCREASED CIVIL MONETARY PENALTIES

Blame Inflation but beginning on February 1, 2019 the Civil Monetary Penalties for violations that occurred after November 2, 2015 have increased. According to the notice published in the Federal Register, the Department of Education has adjusted the following penalties for inflation:

20 U.S.C. 1015(c)(5) (Section 131(c)(5) of the Higher Education Act of 1965 (HEA)). Provides for a fine, as set by Congress in 1998, of up to $25,000 for failure by an institution of higher education (IHE) to provide information on the cost of higher education to the Commissioner of Education Statistics. New Maximum Penalty – $38,549

20 U.S.C. 1022d(a)(3) (Section 205(a)(3) of the HEA). Provides for a fine, as set by Congress in 2008, of up to $27,500 for failure by an IHE to provide information to the State and the public regarding its teacher- preparation programs. New Maximum Penalty – $32,110

20 U.S.C. 1082(g) (Section 432(g) of the HEA). Provides for a civil penalty, as set by Congress in 1986, of up to $25,000 for violations by lenders and guaranty agencies of Title IV of the HEA, which authorizes the Federal Family Education Loan Program. New Maximum Penalty – $57,317

20 U.S.C. 1094(c)(3)(B) (Section 487(c)(3)(B) of the HEA). Provides for a civil penalty, as set by Congress in 1986, of up to $25,000 for an IHE’s violation of Title IV of the HEA, which authorizes various programs of student financial assistance. New Maximum Penalty – $57,317

20 U.S.C. 1228c(c)(2)(E) (Section 429 of the General Education Provisions Act). Provides for a civil penalty, as set by Congress in 1994, of up to $1,000 for an educational organization’s failure to disclose certain information to minor students and their parents. New Maximum Penalty – $1,692

31 U.S.C. 1352(c)(1) and (c)(2)(A). Provides for a civil penalty, as set by Congress in 1989, of $10,000 to $100,000 for recipients of Government grants, contracts, etc. that improperly lobby Congress or the Executive Branch with respect to the award of Government grants and contracts. New Maximum Penalty – $20,134 to $201,340

31 U.S.C. 3802(a)(1) and (a)(2). Provides for a civil penalty, as set by Congress in 1986, of up to $5,000 for false claims and statements made to the Government. New Maximum Penalty – $11,463

You can read the full Federal Register here: https://ifap.ed.gov/fregisters/attachments/FR020119.pdf

NEW CPS FUNCTION FOR RESENDING DHS SAVE SYSTEM MATCHES

On February 17, 2019, a new function was added to the Financial Aid Administrator Access to Central Processing System (FAA Access to CPS) that allows financial aid administrators to resend record matches to the DHS SAVE System to complete Third Step Verification. There are two situations where this is necessary. On the SAVE system, when the Case Status is “Case Closed” and the SAVE Response is “Resubmit Doc”, or the SAVE Response is “Applicant Status” or “Applicant is a” field statuses do not match the student’s immigration documents, this new functionality will allow you to resend a student’s ISIR record to matching agencies including the DHS. If a student’s eligibility is not confirmed a new DHS verification number will be provided so that you can resubmit the Third Step verification request through the SAVE system.

FSA provided instructions in a recent electronic announcement, noting that this process replaces the guidance on pages 32-34 of the SAVE instructions for School Users 2.0 document “Requesting a new DHS Verification Number”. Check out their announcement for more details on how to navigate through this streamlined procedure and be sure to check out their presentation on resending record matches too.

FY 2016 3-YEAR DRAFT COHORT DEFAULT RATES RELEASED

On February 25, 2019, the Department of Education distributed the FY 2016 3-Year Draft Cohort Default Rate (CDR) notification packages to schools via their Student Aid Internet Gateway (SAIG) mailbox. The package includes a cover letter and Loan Record Detail Report (LRDR). It’s important for schools to review their draft data because there are sanctions for schools with high cohort default rates and benefits for schools with low ones and the draft cycle is one of the only opportunities to challenge certain data.

The Fiscal Year 2016 3-Year Draft CDR is calculated by dividing the number of borrowers who entered repayment in 2015 by the number of borrowers who entered repayment in 2016 and defaulted in 2016, 2017 or 2018.

Although there are no sanctions or benefits associated with the draft rates themselves, the draft rates become official in September. During the draft cycle, schools have an opportunity to challenge incorrect data or challenge their (low) participation rate. The challenge and appeals cycle begins on March 5, 2019 and lasts for 45 days. More information about submitting an Incorrect Data Challenge or a Participation Rate Index Challenge can be found in the Cohort Default Rate Guide,

Benefits
A school whose most recent official cohort default rate is less than 5.0 percent and is an eligible home institution that is originating loans to cover the cost of attendance in a study abroad program may disburse loan proceeds in a single installment to a student studying abroad regardless of the length of the student’s loan period, and may choose not to delay the disbursement of the first installment of loan proceeds for first year first-time borrowers studying abroad.

A school with a cohort default rate of less than 15.0 percent for each of the three most recent fiscal years for which data are available, including eligible home institutions and foreign institutions, may disburse, in a single installment, loans that are made for one semester, one trimester, one quarter, or a four-month period and may choose not to delay the first disbursement of a loan for 30 days for first time, first-year undergraduate borrowers.

Sanctions
If a school’s three most recent official cohort default rates are 30.0 percent or greater for the three-year calculation it will lose Direct Loan and Pell Grant program eligibility for the remainder of the fiscal year in which the school is notified of its sanction and for the following two fiscal years.

If a school’s current official cohort default rate is greater than 40.0 percent, for the three-year CDR calculation, it will lose Direct Loan and Pell Grant program eligibility for the remainder of the fiscal year in which the school is notified of its sanction and for the following two fiscal years.

TENTATIVE 19-20 CAMPUS BASED FUNDING LEVELS RELEASED

TENTATIVE 19-20 CAMPUS BASED FUNDING LEVELS RELEASED
Tentative 2019-2020 award year Funding Levels for Campus -Based FSA Programs were released on the Common Origination and Disbursement website today. For the 2019-2020 year, $1,130,000,000 in Federal Work-Study Program Funds and $840,000,000 in Federal Supplemental Educational Opportunity Grant Program funds have been appropriated. To see how much your school will receive for the upcoming award year, check out this electronic announcement from Federal Student Aid.