Federal Student Aid will be contacting TEACH Grant recipients whose TEACH Grants were converted into Direct Unsubsidized Loans to redetermine if they met or are meeting the TEACH Grant Service Requirements, but had their grants converted into loans because they did not comply with the annual certification requirements. According to an announcement from FSA, individuals may qualify to have their loans converted back to TEACH Grants if they can demonstrate that they completed at least four years of qualifying teaching or are expecting to or are in the process of doing so.
The Department of Education is asking schools with Perkins Loans that were awarded or disbursed to students after the expiration of the Perkins Loan Program to review all its Perkins Loan data on NSLDS. The ask follows an announcement last month that ED has identified many Perkins Loans on NSLDS with errors. The most common errors are loan dates reported after 9/30/16 for graduate borrowers, 9/30/17 for undergraduate borrowers and loans with a disbursement date after 6/30/18 for all borrowers.
According to ED, the issue typically occurs when a school or its third-party servicer reports updated batch information that overwrites the information that was previously reported to NSLDS correctly. Schools using third party servicers can work directly with their servicer to resolve any errors. Schools can request a Perkins Loan Reconciliation Report (REC005) from NSLDS which will help ensure that all Perkins Loan information is reported accurately.
If your school awarded a loan or disbursement in error, your school must reimburse the Perkins Loan Revolving Fund for the amount of the loans, correct the FISAP, notify the borrower, and update NSLDS accordingly.
Borrowers with questions about qualifying for Public Service Loan Forgiveness have a new tool to help them understand their options and how to qualify to have their loans forgiven. Now, when a student calls with questions, you can direct them to the studentloans.gov website at StudentLoans.gov/PSLF. Borrowers will be able to:
- assess whether their employer qualifies for PSLF;
- assess whether their loans qualify for PSLF;
- decide which PSLF form to submit; and
- learn about other actions borrowers should or must take if they want to receive PSLF.
For more information and PSLF resources, check out this electronic announcement from FSA.
Last month the Department of Education was ordered to begin granting closed school discharges for borrowers affected by the closure of their institution. The Department reported that they’ve identified more than 15,000 borrowers who are eligible to have their loans automatically discharged and they’ve begun emailing notifications to borrowers. Most discharges will be completed within 90 days.
Since the 2016 borrower defense to repayment regulations are now in effect, there are new conditions for schools when they close. According to a recent electronic announcement schools must provide all enrolled students with a closed school discharge application and a written disclosure, describing the benefits and consequences of a closed school discharge as an alternative to completing their educational program through a teach-out agreement, immediately upon submitting a teach-out plan after the occurrence of any of the following events:
- The Department initiates a limitation, suspension, or termination of the participation of a school in any Title IV, HEA program under 34 CFR 600.41 or subpart G of 34 CFR Part 668 or initiates an emergency action under 34 CFR 668.83;
- The school’s accrediting agency acts to withdraw, terminate, or suspend the accreditation or preaccreditation of the school;
- The school’s State licensing or authorizing agency revokes the school’s license or legal authorization to provide an educational program;
- The school intends to close a location that provides 100 percent of at least one program; or
- The school otherwise intends to cease operations.
Federal Student Aid just announced that the Department of Homeland Security’s SAVE system instructions for school users have been released. Version 2.0 of the instruction guide replaces version 1.0 which was released in May 2018 and includes updates and changes through September 4, 2018.
According to the recent electronic announcement from FSA, Version 2.0 addresses system processes and procedures for:
- How to resolve a “No cases found” error message;
- What action is necessary for each of the five SAVE response messages;
- How to proceed if a SAVE response is not received within 15 business days of submission;
- How and when to resolve a “closed case” and request a new DHS verification number;
- How to check the Institutional Student Information Record (ISIR) DHS Match Flags for a confirmed eligible noncitizen status after FSA’s Application Processing Division has resent a DHS verification number to SAVE;
- How to enter “Cuban/Haitian Entrant review requested” in the SAVE “Special comments” box;
- How to determine whether unusual immigration statuses are eligible for Title IV Aid, and;
- How to find help for SAVE system issues.
Institutions participating in the FWS and FSEOG programs are normally required to provide a non-Federal share under each program. Certain institutions, however, are eligible for a waiver of those requirements. To receive a waiver of the FWS and FSEOG non-Federal share requirement, the institution must be designated as an eligible Title III or Title V institution. If an institution is designated as a Title III or Title V institution for Federal Fiscal 2019 it will receive a waiver of the requirement for the non-Federal share of earned compensation paid to students under the FWS Program and of FSEOG funds awarded to students for the 2019-2020 Award Year.
Institutions that are determined eligible for a Title III or Title V program automatically receive the waiver of the non-Federal share requirement for the Campus-Based Programs for the 2019-20 Award Year. No further action is required.
Institutions that are not designated as eligible for a Title III and Title V program have the option to complete the Application for Designation as an Eligible Institution by the deadline which will be announced in the Federal Register in early 2019.
TOP 10 PROGRAM REVIEW FINDINGS OF 2018
One of the functions of the U.S. Department of Education is to oversee the Federal Student Aid programs to ensure they are administered correctly and that institutions are meeting the FSA requirements for institutional eligibility, financial responsibility, and administrative capability.
School Participation Divisions review information about each title iv approved school from a variety of sources including accrediting agencies, state licensing boards and agencies, student complaints and of course, financial and compliance audits.
This information is evaluated by ED and FSA to assess potential risk to the FSA programs and if necessary, act to investigate a school. One of the ways ED does this is by conducting program reviews at schools that exhibit certain indications of problems or pose a potentially significant risk of failing to comply with the rules and regulations governing title iv participation.
Knowing what to watch out for can help you avoid compliance problems.
These findings represent data ED reported based on findings from Program Review audits and compliance examinations reports conducted by FSA and published in the last twelve months for fiscal year 2018.
- NSLDS Roster Reporting – Inaccurate/Untimely Reporting
- Crime Awareness Requirements Not Met
- Return of Title IV (R2T4) Calculation Errors
- Drug Abuse Prevention Requirements Not Met
- Student Credit Balance Deficiencies
- Consumer Information Requirements Not Met
- Verification Violations
- Entrance/Exit Counseling Deficiencies
- Inaccurate Recordkeeping
- Satisfactory Academic Progress Policy Not Adequately Developed/Monitored
Findings like these are preventable.
Higher Ed Executives provides colleges and universities with objective and confidential assessments that can help you uncover unknown compliance problems and improve title iv administrative and operational procedures and processes.
Our comprehensive assessments cover the full spectrum of FSA requirements for institutional eligibility, financial responsibility, and administrative capability.
Call us today for a free no obligation consultation and to find out how our assessments can work for you.
BREAKING NEWS – FSA ANNOUNCES SCHOOLS CAN ACCEPT SIGNED TAX RETURNS FOR VERIFICATION
Federal student Aid just released guidance allowing schools and college financial aid administrators to accept a signed copy of a 2016 or 2017 income tax return in lieu of tax transcript for the 2018-2019 and 2019-2020 award years as applicable. The announcement provides immediate relief to students beleaguered with problems obtaining the official IRS tax return transcript as has been required until now.
Students and parents who did not file and were not required to file a tax return are still required to provide verification of nonfiling from the IRS, but under the new guidance if the individual is unable to obtain verification of nonfiling from the IRS or other tax authorities and, based upon the institution’s determination, it has no reason to question the student’s or family’s good-faith effort to obtain the required documentation the institution may accept:
- A signed statement certifying that the individual
- Attempted to obtain the verification of nonfiling from the IRS or other tax authorities and was unable to obtain the required documentation; and
- Has not filed and is not required to file a 2016 or 2017 income tax return, and a listing of the sources of any 2016 or 2017 income earned by the individual from work and the amount of income from each source; and
- A copy of IRS Form W–2, or an equivalent document, for each source of 2016 or 2017 employment income received by the individual.
FSA also released an announcement informing the Financial Aid community that the Central Processing System will be skipping the database match with Selective Service System during the government shutdown.
According to the electronic announcement, FSA states that “during this match bypass, Student Aid Reports (SARs) and Institutional Student Information Records (ISIRs) will display Comment Code 390: “We were unable to verify your eligibility for federal student aid with one or more other federal agencies through computer matching programs. Your school will contact you if additional information is needed.” The CPS will assign a blank value to the Selective Service Match Flag on SARs and ISIRs unless the corrected transaction already has a valid SSS match flag value that the CPS can pull forward to the new transaction. “
When the shutdown is over, CPS will reprocess ISIR records for impacted students. You can read all about it here in this electronic announcement from FSA.
FSA recently released an electronic announcement reminding institutions of the requirements for proper cash management compliance. Disbursing aid timely, resolving excess cash and reconciliation are necessary procedures and controls to ensure compliance with the federal regulations. Noncompliance in these areas often results in institutions being placed on the Heightened Cash Monitoring disbursement method and often with a requirement that the school post an irrevocable Letter of Credit equal to a percentage of title iv funds that have been drawn down in prior years. It’s not pretty. The simplest thing to do to avoid this is to have a handle on some cash management basics.
Three Steps to Cash Management Compliance:
1. Submit disbursement records timely.
All disbursement records should be sent to COD within 15 days after making the disbursement or becoming aware of the need to adjust a student’s previously reported disbursement.
2. Keep an eye out for excess cash and if necessary, return any undisbursed funds to the Department.
Excess Cash is any amount of title iv funds (excluding Perkins) that the school does not disburse to students or parents by the end of the third business day after the date the school received funds from the department. Excess cash can also occur when a school deposits previously disbursed funds into their federal bank account and lets it sit for more than three days before disbursing it to another student or returning it to the Department.
3. Reconcile regularly.
If you are reconciling all title iv disbursements on at least a monthly basis, you’ll be in a good position to ensure that you are meeting the disbursement reporting and excess cash deadlines. Regularly reconciling both internally between business office and financial aid office data as well as externally between financial aid office data and the Department’s COD and G5 systems will make final reconciliation and program year closeouts a snap. Plus, your auditors will be very happy to see the proof of your regular efforts.
If you’ve done everything right in the fall, disbursing for Spring Semester is as easy as a push of a button. Is it ever that easy though? Yeah right.
January 2019 will begin the COD system’s “Peak Processing Period” for the 2018-2019 Award Year. During this time origination and disbursement batch processing may take up to 24 hours. Mondays and Tuesdays are busiest processing days at COD and they recommend that schools with the ability to schedule their batch submissions later in the week do so. Everything else is expected to run according to schedule according to a recent electronic announcement which says that if processing takes longer than 24 hours, COD’s School Relations Center will contact any affected schools on the next business day. Happy Processing!