Federal Student Aid Nuts & Bolts, 2004-06 Glenn Bogart, J.D. Several topics are covered here in some detail. Even though a lot of this is "old news," there's a good chance there will be something here that will be news to you. 1. Change in Return of Title IV funds policy. If you are not seeing a significant increase in the amount of Title IV money you get to keep for Pell recipients who drop out, you should read this carefully. 2. Late disbursements for early drops. Here, we review the rules regarding whether and when a late FFEL or Direct Loan first disbursement may be used, or must be returned in its entirety. 3. Low-income documentation. ED reviewers often use the "conflicting documentation" rule in novel ways, their mischief to achieve. The conflicting documentation findings I have been seeing in program review reports reach far beyond what we used to think of as conflicts that must be resolved. You can read up on this, in this section of the article. 4. Be sworn into the IRS police. Here is another area where your school will be vulnerable to big-time liabilities unless you have tightened up considerably in examining tax returns and rejecting those that are improper. There are a few things ED now expects financial aid officers to know and act upon that, in the past, would not have been a problem if ignored. You need to know what they are, and the information is in this section. 5. Date of determination of withdrawal for schools required to take attendance. In 2004, ED decided to tighten up (without benefit of new regulations) on refund timeliness for schools that are required by state or accrediting agency to take daily attendance. In November, 2004, they issued a "revised" Dear Colleague Letter, in which they backed off just a little bit -- but the new policy is still onerous and still goes way beyond the applicable regulations. Reminder about change in Return of Title IV funds policy Most of you are probably aware of this, but just in case you're not, a new ED policy, announced in Dear Colleague Letter 04-03 and also in the 03/04 Federal Student Aid Handbook, states that Direct loan funds originated but not disbursed on a student can be counted as aid that could have been disbursed in the R2T4 calculation. In 2006, they "clarified" this by saying you also have to have a signed promissory note. You can get the note signed after the student has dropped out, but good luck convincing the student that this doesn't mean he is signing for a loan . . . More about R2T4 In the Harrison Career Institute emergency action, fine, and termination case, ED claimed that if a school takes attendance, even if not required to do so, it has a very limited time to determine withdrawal for students who disappear. They also claimed that once a school determined or should have determined, that a student has disappeared, the school cannot assume attendance to the 50% point. All of this contradicts the applicable regulations, or course. The emergency action was lifted, and as of August 2006, we are awaiting Judge Canellos' decision in the termination case. ED dropped the proposed fine altogether in the course of the proceedings. I served as the defense expert in this case.
Several topics are covered here in some detail. Even though a lot of this is "old news," there's a good chance there will be something here that will be news to you.
1. Change in Return of Title IV funds policy. If you are not seeing a significant increase in the amount of Title IV money you get to keep for Pell recipients who drop out, you should read this carefully.
2. Late disbursements for early drops. Here, we review the rules regarding whether and when a late FFEL or Direct Loan first disbursement may be used, or must be returned in its entirety.
3. Low-income documentation. ED reviewers often use the "conflicting documentation" rule in novel ways, their mischief to achieve. The conflicting documentation findings I have been seeing in program review reports reach far beyond what we used to think of as conflicts that must be resolved. You can read up on this, in this section of the article.
4. Be sworn into the IRS police. Here is another area where your school will be vulnerable to big-time liabilities unless you have tightened up considerably in examining tax returns and rejecting those that are improper. There are a few things ED now expects financial aid officers to know and act upon that, in the past, would not have been a problem if ignored. You need to know what they are, and the information is in this section.
5. Date of determination of withdrawal for schools required to take attendance. In 2004, ED decided to tighten up (without benefit of new regulations) on refund timeliness for schools that are required by state or accrediting agency to take daily attendance. In November, 2004, they issued a "revised" Dear Colleague Letter, in which they backed off just a little bit -- but the new policy is still onerous and still goes way beyond the applicable regulations.