ILASFAA 2008 Annual Conference

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ILASFAA 2008 Annual Conference

Federal Student Aid Compliance: How Does Your Institution

Score? Quiz yourself on some of the subtle points of FSA

regulations and guidance

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Assumptions when considering answers to questions:

• The institution has only credit hour, traditional standard term programs.

• Aid is awarded for a payment period.• The institution is not required to take attendance.• Students are not enrolled in a study aboard,

correspondence programs, teacher certificate type programs.

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SAR/ISIR EFC • A SAR/ISIR with an “official EFC” is an EFC calculated

by the Department and provided on a SAR/ISIR. A “valid EFC” is defined as an ISIR with an EFC based on information that is correct and complete.

• Question #1 on Quiz :An “official EFC” may not necessarily be a “valid EFC”.

TRUE Reference: FSA Handbook 2007-08, p. AVG-7

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SAR/ISIR EFC

Reference: FSA Handbook 2007-08, Application and Verification Guide, p. AVG-7

“A school must pay or offer to pay any disbursements for a student if it receives a SAR or ISIR with an official EFC while she is enrolled and eligible, but not later than September 24, 2008.”

“To give a Pell grant to a student, a school must have a valid output document (one with an EFC computed from correct data) while the student is still enrolled for the award year or in the timeframe the student qualifies for a late disbursement under 34 CFR 668.164(g)(4)(i), but no later than September 24, 2008.”

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VERIFICATION • A school may accept a tax return without the tax filer’s

signature, if the tax preparer has stamped, typed, signed, or printed his/her name and reported his/her SSN, EIN (Employer Identification Number), or PTIN (Preparer Tax Identification Number),

• Question #2 on Quiz:A school may accept a tax return without the tax filer’s signature or the tax preparer’s name, if it has stamped, typed, signed, or printed the name of the tax preparer’s company or organization, e.g., H & R Block.

FALSE, requires tax preparer’s name. Reference: FSA Handbook 2007-08, p. AVG-84

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VERIFICATION

Reference: FSA Handbook 2007-08, Application and Verification Guide, p. AVG-84

“Instead of a return the filer has signed, you may accept a paper return on which the tax preparer has stamped, typed, signed, or printed her name (not the name of her company) and her SSN, EIN (Employer Identification Number), or PTIN (Preparer Tax Identification Number)”

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ACADEMIC YEAR • Every eligible program, including graduate programs, must have a

defined academic year. The academic year is used to determine the student’s eligibility for loans, Pell Grants, as well as ACG and National SMART grants. For FSA purposes, an academic year is defined by the following criteria:

• Questions #3 and #4 on Quiz :

in weeks of instructional time for both undergraduate and graduate programs

Answer #2: TRUE

in credit hours or clock hours for both undergraduate and graduate programs

Answer #3: FALSEReference: FSA Handbook 2007-08, p. 3-2

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ACADEMIC YEAR

Reference: FSA Handbook 2007-08, Volume 3 – Calculating Awards and Packaging, Chapter 1– Academic Calendar and Payment Period, p. 3-2

Weeks of instructional time in an academic year“An academic year for a credit-hour or direct assessment program must be at least 30 weeks of instructional time for a year, and for clock hour programs, 26 weeks of instructional time. In cases where the program uses an academic year that meets the standard for credit hours or clock hours, but the program provides less than the required weeks of actual instructional time, Pell Grant awards and, in some cases, the annual loan limits for Stafford Loans must be prorated. “

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ACADEMIC YEAR

Credit/clock hours in an academic year“The law and regulations set the following minimum standards for coursework earned by a full-time student in an academic year in an undergraduate educational program (including direct assessment programs):

• 24 semester or trimester credit hours or 36 quarter credit hours for a program measured in credit hours; or

• 900 clock hours for a program measured in clock hours

There is no minimum hours component to the definition of an academic year for graduate/professional programs.

(However) For purposes of FFEL and DL programs, a loan period certified for an academic year in a graduate or professional program would include the weeks of instructional time in the academic year and the hours a full-time student is expected to complete in those weeks.”

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GENERAL ELIGIBILITY REQUIREMENTS

• A student must be enrolled at least half time to be eligible for Direct Loan or FFEL Program funds.

• Question #5 on Quiz :A student must be enrolled at least half time to be eligible for campus-based funds (i.e., Perkins Loan, Federal Work Study, and Federal Supplemental Educational Opportunity Grant).

FALSE

Reference: FSA Handbook 2007-08, p. 1-73

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GENERAL ELIGIBILITY REQUIREMENTS

Reference: FSA Handbook 2007-08, Volume 1--Student Eligibility, Chapter 7--Other Program-related Eligibility Requirements p. 1-73

Campus-based aid general requirements “Unlike the Stafford and PLUS loan programs, a student does not have to be enrolled at least half time to be eligible to receive aid through the campus-based programs unless the student is seeking aid to attend a teacher certification or professional credential program.”

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SATISFACTORY ACADEMIC PROGRESS (SAP)• To quantify academic progress a school must set a maximum time

frame in which a student is expected to finish a program, i.e., 150% for undergraduate program.

Assume during a SAP review, the student meets all requirements (i.e., school’s minimum requirements for cumulative GPA and completion rate, and has not exceeded the maximum time frame).

• Question #6 on Quiz :If it is clear that a student cannot mathematically finish the program within the maximum time frame period, the student must be treated as ineligible for federal aid.

TRUE However, the student may appeal for reinstatement.Reference: FSA Handbook 2007-08, p. 1-10

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SATISFACTORY ACADEMIC PROGRESS

Reference: FSA Handbook 2007-08, Volume 1--Student Eligibility, Chapter 1--School Determined Requirements, p. 1-10

Quantitative standards“To quantify academic progress your school must set a maximum time frame in which a student is expected to finish a program. If your SAP review makes it clear that a student cannot mathematically finish the program within this period, she becomes ineligible for aid (though she may request an appeal; …”

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AWARDING FEDERAL AID • Assume a school offers programs on a traditional

standard academic calendar (i.e., semesters, trimesters, or quarters) that includes an intersession between Fall and Spring semester (or Fall and Winter quarter).

• Question #7 on Quiz :– The institution at its discretion may choose not to

award/disburse federal aid funds for the intersession.Or– The institution must award/disburse federal aid funds

for the intersession.

Answer: Must award/disburse federal aid funds.Reference: FSA Handbook 2007-08, Volume 3, Chapter 1.

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AWARDING FEDERAL AID

Reference: FSA Handbook 2007-08, Volume 3--Calculating Awards and Packaging, Chapter 1--Academic Calendar and Payment Period.

An institution must determine which type of academic calendar and payment period a program must be administered. There are provisions for all circumstances.

How the intersession (i.e., a nonstandard term) is treated will determine whether the program is considered standard or nonstandard.

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• Assume a school offers programs on a traditional standard academic calendar (i.e., semesters, trimesters, or quarters) that includes summer mini-sessions.

• Question #8 on Quiz :– The institution at its discretion may establish a policy that it will

not award/disburse federal loan funds for summer mini-sessions .

Or– The institution must award/disburse federal loan funds for any

and all summer mini-sessions.

Answer: Must award/disburse federal loan funds, if requested and student is eligible.

Reference: FSA Handbook 2007-08, Volume 3, Chapter 1.

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FSA Handbook 2007-08, Volume 3--Calculating Awards and Packaging, Chapter 1--Academic Calendar and Payment Period.

It may choose not to package particular funds, but must provide information on the availability and process if requested and the student is eligible. Note: How summer mini-sessions are treated will determine whether the program is considered standard or nonstandard.

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TIMING OF DISBURSEMENT

• Assume the institution does not qualify for a low cohort default rate exemption, if a student is in the first year of an undergraduate program and is a first-time Stafford borrower, the earliest that an institution may make the first installment of a Stafford loan is –

• Question #9 on Quiz :30 calendar days after the date the student’s program of study begins.

Answer: TRUE, it may disburse on the 31st dayReference: FSA Handbook 2007-08, p. 4-37

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Reference: FSA Handbook 2007-08, Volume 4--Processing Aid and Managing Federal Student Aid Funds, Chapter 2--Disbursing Federal Student Aid, p. 4-37

“If a student is in the first year of an undergraduate program and is a first-time Stafford borrower, your school may not disburse the first installment of the Stafford loan until 30 calendar days after the student’s program of study begins.”

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• If a program offers short courses (e.g., accelerated, modular mini-sessions) that are not the standard length of a term, begin and end within the standard term’s start and end dates, and the student enrolls solely in courses that begin later in the term,

• Question #10 on Quiz :The earliest that a school may disburse federal student aid funds by crediting the student’s account or by paying directly to the student is ten (10) calendar days before the first day of the start of classes in the student’s enrollment record, not the first day of the term.

TRUE Reference: FSA Handbook 2007-08, p. 4-37 & 4-38

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“The earliest that a school may disburse FSA funds by crediting the student’s account or by paying directly to the student or parent is 10 days before the first day of classes for that payment period.”

“When a student is attending a modular program, but won’t attend the first module, the date when classes begin for making disbursements is the starting date of the first module that the student will actually attend.”

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PROMPT DISBURSEMENT • A school must make disbursement of federal aid funds

and FFEL loan funds that have been deposited in the school’s bank account as soon as administratively feasible but -

• Question #11 on Quiz :no later than three (3) business days, which includes the day funds are deposited

Orno later than three (3) business days after funds are deposited in the school’s bank account.

Answer: No later than 3 business days after funds are deposited.Reference: FSA Handbook 2007-08, p. 4-44

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PROMPT DISBURSEMENT


“… schools …must make disbursements as soon as administratively feasible but no later than 3 business days after receiving funds from the Department....There is a similar requirement for schools receiving FFEL funds.

Note that these timeframes for disbursing to the student’s account(or directly to the student/parent) are different than those for paying FSA credit balances to the student or parent. As we discussed earlier, a school generally has 14 days to pay an FSA credit balance to the student or parent, unless it has written permission to hold the credit balance.

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PROMPT RETURN OF FFEL FUNDS • An institution may be able to justify a delay disbursing FFEL loan

funds for up to —

• Question #12 on Quiz :Ten (10) business days after the three (3) business days if the student has not met all the FFEL program eligibility requirements; and the institution expects the student to meet those requirements within this 10 day period.

OrTen (10) business days after the three (3) business days if the school requires additional time to arrange the disbursement and determine the student’s eligibility; and/or the institution expects the student to meet those eligibility requirements within this 10 day period.

Answer: Ten business days after the three business days, if the student has not met all the FFEL program eligibility requirements. Reference: FSA Handbook 2007-08, p. 4-63

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PROMPT RETURN OF FFEL FUNDSReference: FSA Handbook 2007-08, Volume 4--Processing Aid and

Managing Federal Student Aid Funds, Chapter 3--Requesting and Managing FSA Funds, p. 4-63

“In some cases, your school may receive the loan funds at a point when the student is temporarily not eligible for a disbursement—for instance, if the student needs to complete the clock hours or credit hours in the first half of the loan period (for an academic program without terms). If you expect such a student to become eligible for disbursement in the immediate future, your school has an additional 10 business days to disburse the funds. In effect, this means that your school can wait 13 days after receipt of the EFT or master check (40 days for a check requiring endorsement) to make a disbursement to a student who is expected to regain eligibility during this 10-day window.”

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PROMPT RETURN OF FFEL FUNDS• An institution must return funds to a lender promptly but -

• Question #13 on Quiz :No later than ten (10) business days after the date the institution is required to disburse the funds, which could be 3 or 13 business days.

OrNo later than ten (10) calendar days of the date the institution is required to disburse the funds, which could be 3 or 13 business days.

Answer: Ten (10) business daysReference: FSA Handbook 2007-08, p. 4-63

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PROMPT RETURN OF FFEL FUNDSReference: FSA Handbook 2007-08, Volume 4--Processing Aid and

Managing Federal Student Aid Funds, Chapter 3--Requesting and Managing FSA Funds, p. 4-63

“A school must return FFEL Program funds that it does not disburse by the end of the initial or conditional period, as applicable, promptly but no later than 10 business days from the last day allowed for disbursement.

However, if a student becomes eligible to receive FFEL Program funds during the return period, the school may disburse those funds provided that the disbursement is made on or before the last day of the return period.”

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FEDERAL CREDIT BALANCE • Whenever an institution disburses federal student aid

funds by crediting a student's account and the total amount of all federal aid funds credited exceeds the amount of tuition and fees, room and board, and other authorized charges the institution assessed the student, the institution must pay the resulting credit balance directly to the student as soon as possible but—

• Question #14 on Quiz :No later than 14 days after the balance occurred if the credit balance occurred after the first day of class of a payment periodAnswer: TRUE Reference: FSA Handbook 2007-08, p. 4-30

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FEDERAL CREDIT BALANCEReference: FSA Handbook 2007-08, Volume 4--Processing Aid and

Managing Federal Student Aid Funds, Chapter 2--Disbursing Federal Student Aid, p. 4-30

“If FSA disbursements to the student’s account at the school creates an FSA credit balance, you must pay the credit balance directly to the student or parent as soon as possible, but no later than 14 days after:the date the balance occurred on the student’s account, if the balance occurred after the first day of class of a payment period,orthe first day of classes of the payment period if the credit balance occurred on or before the first day of class of that payment period.”

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RETURN TO TITLE IV FUNDS (RTIV) • An institution that is not required to take attendance must

determine the withdrawal date for a student who withdraws from all courses without providing notification, i.e., unofficial withdrawal, to the institution –

• Question #15 on Quiz :no later than 30 calendar days from the end of the payment period

Orno later than 30 calendar days after the end of the payment period

Answer: Both are correctReference: FSA Handbook 2007-08, p. 5-66 and 5-110

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RETURN TO TITLE IV FUNDS (RTIV)Reference: FSA Handbook 2007-08, Volume 5--Overawards,

Overpayments, and Withdrawal Calculations, Chapter 2--Withdrawals and the Return of Title IV Funds, p. 5-66 or 5-110

“A school may not know that a student has dropped out (unofficially withdrawn) until the school checks its records at the end of an academic period. However, to ensure that Title IV funds are returned within a reasonable period of time, a school must determine the withdrawal date (for a student who withdrew without providing notification) within 30 calendar days from the earlier of (1) the end of the payment period or period of enrollment, as applicable, (2) the end of the academic year, or (3) the end of the student’s educational program.”

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RETURN TO TITLE IV FUNDS (RTIV)

“A school must develop a mechanism for determining whether a student who began attendance and received or could have received an initial disbursement of Title IV funds unofficially withdrew (ceased attendance without providing official notification or expressed intentto withdraw) during a payment period or period of enrollment, as applicable…. That is, institutions are expected to have procedures for determining when a student’s absence is a withdrawal. The school must make that determination as soon as possible, but no later than 30 days after the end of the earlier of –– the payment period or period of enrollment, as applicable;– the academic year; or– the program.”

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RETURN TO TITLE IV FUNDS (RTIV)• If a student is entitled to a post-withdrawal disbursement,

the student must be notified –

• Question #16 on Quiz :no later than 30 days after the date of the institution's determination that the student withdrew

Orno later than 45 days after the date of the institution’s determination that the student withdrew

Answer: Within 30 days after the date of determinationReference: FSA Handbook 2007-08, p. 5-110

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Reference: FSA Handbook 2007-08, Volume 5 Overawards, Overpayments, and Withdrawal Calculations, Chapter 2 Withdrawals and the Return of Title IV Funds, p. 5-66 or 5-110

“A school must send the (post-withdrawal disbursement) notification as soon as possible, but no later than 30 calendar days after the date that the school determines the student withdrew.”

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• An institution must return the amount of unearned Title IV funds for which it is responsible as soon as possible but –

• Question #17 on Quiz :as soon as possible, but no later than 45 days after the date of the institution’s determination that the student withdrew

Answer: TRUEReference: FSA Handbook 2007-08, p. 5-110

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RETURN TO TITLE IV FUNDS (RTIV)Reference: FSA Handbook 2007-08, Volume 5 Overawards,

Overpayments, and Withdrawal Calculations, Chapter 2 Withdrawals and the Return of Title IV Funds, p. 5-90 or 5-110

“…school to return unearned funds for which it is responsible as soon as possible, but no later than 45 days from the determination of a student’s withdrawal.”

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RETURN TO TITLE IV FUNDS (RTIV)• A student begins earning Title IV funds on his or her first

day of attendance.

• Question #18 on Quiz :If a student withdraws before the close of a school’s add/drop period, the school must perform a Return of Title IV Funds calculation using the number of days the student attended class.

TrueReference: FSA Handbook 2007-08, p. 5-22 and 5-24

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RETURN TO TITLE IV FUNDS (RTIV)Reference: FSA Handbook 2007-08, Volume 5--Overawards, Overpayments, and Withdrawal Calculations, Chapter 2--Withdrawals and the Return of Title IV Funds, p. 5-22 or 5-24

“A student begins earning Title IV funds on his or her first day of attendance. Therefore, even if a student withdraws before a school’s census date, the school must perform a Return calculation using the number of days…the student attended class as the numerator [in the calculation of earned aid].”

“Even if a student paid all institutional charges and ceased enrollment prior to Title IV funds being disbursed, if Title IV funds could have been disbursed, the institution must determine the Title IV funds earned by the student and follow the procedures for making a post-withdrawal disbursement.”

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• For a student who withdraws after the 60% point-in-time in a payment period,

• Question #19 on Quiz :a school is not required to complete a Return of Title IV Funds calculation

False, it must determine whether there is a post-withdrawal disbursementReference: FSA Handbook 2007-08, p. 5-78

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Reference: FSA Handbook 2007-08, Volume 5 Overawards, Overpayments, and Withdrawal Calculations, Chapter 2 Withdrawals and the Return of Title IV Funds, p. 5-78

“For a student who withdraws after the 60% point-in-time, even though a return is not required, a school may have to complete a Return calculation in order to determinewhether the student is eligible for a post-withdrawal disbursement.”

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REPORTING DISBURSEMENTS• Federal Pell Grant, ACG, National SMART Grant and

Direct Loan disbursement records –

• Question #20 on Quiz :Should be submitted to COD no later than 30 days after making a disbursement or becoming aware of the need to adjust a student’s disbursement.

OrMust be submitted to COD no later than 30 days after making a disbursement or becoming aware of the need to adjust a student’s disbursement.

Answer: Must be submitted no later than 30 days after disbursementReference: FSA Handbook 2007-08, p. 4-44

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REPORTING DISBURSEMENTS


“An institution must submit Federal Pell Grant, ACG, National SMART Grant and Direct Loan disbursement records no later than 30 days after making a disbursement or becoming aware of the need to adjust a student’s disbursement.

An institution’s failure to submit disbursement records within the required 30-day timeframe may result in an audit or program review finding. In addition, the Department may initiate an adverse action,such as a fine or other penalty for such failure.”

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ILASFAA 2008 Conference

Contact InformationJanet HunterSenior Associate ConsultantFinancial Aid [email protected] 371-2317

Documents

ILASFAA 2008 Annual Conference