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ED Dear Colleague Letters

ED’s Dear Colleague Letters (DCLs) on IFAP: Jan-March 2013

ED’s Dear Colleague Letters (DCLs) on IFAP – (listed by DCL category by date)

DCL – GEN-13-01: January 14, 2013 – Dear Colleague Letters Issued Under GEN and ANN Types Beginning January 2013

ED alerts the community to the change being made in how Dear Colleague Letters are classified.  Effective with January, 2013, all DCLs will be categorized as either “GEN” or “ANN”.  This is a reduction from the prior five categories of DCL types.  The GEN type will encompass what in the past may have been categorized as GEN (General Distribution), CB (Campus-Based), FP (Financial Partners), and P (Pell Grant).  The ANN type DCLs are unchanged in the purpose and content in that they will continue to contain information related to announcements about training opportunities.

DCL – GEN-13-02: January 17, 2013 – Regaining Title IV Eligibility After Exceeding Loan Limits and Treatment of Loan Funds When a Student Fails to Begin Attendance

This Dear Colleague Letter (DCL) provides ED’s current guidance on how schools are to address cases in which students have exceeded loan limits and also, how to handle loan funds if the student did not actually begin attendance.  Two pages of Questions & Answers are also included with the DCL.  In the cases of exceeding loan limits, naturally the school has to determine that it was in fact inadvertent borrowing.  This may occur in such situations as an institutional processing error or missing or incorrect data in NSLDS (e.g., capitalized interest incorrectly included in the borrower’s aggregate outstanding balance).  In cases of inadvertent overborrowing, the student may regain Title IV eligibility if the student repays the excess amount in full; or, (2) if the borrower makes satisfactory repayment arrangements to repay the excess amount.  A couple of points of clarification are provided related to the overborrowing scenarios.  First, if NSLDS shows that the borrower consolidated the loan(s) that resulted in the overborrowing into a Direct Consolidation Loan (or, prior to July 1, 2010, into a FFEL Consolidation Loan), no further action is necessary to make satisfactory repayment arrangements, since by signing the consolidation loan promissory note the borrower has agreed to repay any excess loan amount.  Secondly, it is the borrower who must make the repayment of the excess funds; the institution may not pay the amount overborrowed on the student’s behalf.  A student may make satisfactory repayment arrangements via “reaffirmation” of the amount overborrowed.  This must be done in writing in accordance with the stipulations and form the loan servicer provides.  Once a reaffirmation agreement is accepted by the loan servicer, the student or servicer must provide the school with a copy of the reaffirmation confirmation in order for the student to regain Title IV eligibility.

In regard to the treatment of loan funds when a student does not begin attendance, first, schools must have in place a process to determine which students have and have not begun attendance.  This is critical as the regulations allow for schools to disburse DL funds up to 10 days before the first day of classes in the loan period.  If the student fails to begin attendance, the school must return any DL funds disbursed to the student’s account for that period, and immediately notify the applicable loan servicer of the student’s correct enrollment status.  The school must also immediately report the change in enrollment status in NSLDS using the enrollment reporting process.  If a student originally enrolled/registered for classes on more than a half-time basis, but then subsequently only begins attendance on a less than half-time basis, neither the student nor the school is required to return the loan funds that were disbursed based upon the original enrollment status of half-time or greater.  However, the school may not make any further disbursements unless the student resumes enrollment on at least a half-time basis.

DCL – GEN-13-04: January 23, 2013 – State Authorization Regulations Effective Date Extension – Final Year

ED reminds schools that the last extension to the delayed enforcement of State Authorization requirements in 34 CFR 600.9(a) and (b) that were part of the October 29, 2010 Program Integrity Regulations ends on June 30, 2013.  According to this DCL, “after that date, postsecondary institutions that are not compliant with the state authorization regulations under 34 CFR 600.9(a) and (b) may lose their eligibility to participate in Title IV Federal Student Aid programs.”  While this approaching deadline is particularly critical to institutions that have multiple campuses in more than one State, it is important for all institutions to remember that State authorization is an important part of the criteria for determining a school’s Title IV eligibility.  Some States have unique processes (e.g., licensure by means of accreditation, and other scenarios).  Accordingly, schools should be cognizant of the wording of the applicable regulations referenced and ensure that any variant means of licensure are ones that meet the requirements of the regulation.  But, the emphasis of this particular DCL is the deadline date of July 1, 2013, by which time schools must be appropriately authorized by each State in which the school does business.  Schools, once more, are encouraged to become aware of the wording of this regulation, and if necessary, make contact with their licensing entity, professional associations (e.g., AACS, APSCU, etc.), and/or their legal counsel to ensure compliant State authorization.  [As a reminder, DCL GEN-12-13 of July 27, 2012 reminded schools with distance education programs that they are responsible for complying with all State laws as they relate to distance education even though, due to Court decisions, ED would not be enforcing the requirements of 34 CFR 600.9(c) that deal with State authorization and distance education.]

DCL – GEN-13-05: January 30, 2013 – Implementation of the Financial Aid Shopping Sheet

In this DCL ED provides guidance on the implementation of the Financial Aid Shopping Sheet.  It also refers back to earlier communication ED produced regarding the use of the Sheet.  In this DCL and its attached four pages of Questions & Answers (Q&As), an explanation is again given of the purpose of the Financial Aid Shopping Sheet and who is required to utilize it (with ED pointing out one more time that it appreciates all schools’ continued consideration in adopting the Shopping Sheet for use in the 2013-2014 award year).  Schools will do well to review the Q&As to be aware of items related to implementing the Shopping Sheet.  And, schools that have agreed to comply with the Principles of Excellence in Executive Order 13607 may find the Shopping Sheet the most useful tool for meeting the requirements of the EO 13607.

DCL – GEN-13-06: January 30, 2013 – 2013-2014 Federal Pell Grant Payment and Disbursement Schedules

With this letter, ED provides the necessary Payment and Disbursement Schedules for the coming Award Year of 2013-2014.  The schedules are provided for varying enrollment statuses (i.e., full-time, three-quarter-time, half-time, and less than half-time).

It will be noted that these schedules indicate that the maximum Pell Grant for 2013-2014 is $5,645, which is a $95 increase from 2012-2013, and the first increase in a few years.  Also, the actual 2013-2014 Award Year minimum award amount for a full-time student is $582.  The maximum Pell Grant eligible expected family contribution (EFC) for 2013-2014 is 5081 whereas in the 2012-2013 Award Year it was 4995.  Thus, schools may see some additional Pell eligible students in 2013-2014.

Finally, reminders are provided about ensuring that the appropriate cost of attendance (COA) is used (e.g., less than half-time students’ COA is not as encompassing as a full-time student).  For schools’ benefit, the schedules are offered in both PDF and Excel versions.

DCL – GEN-13-07: February 27, 2013 – Guidance on Implementing the Net Price Calculator Requirement

Schools are given additional guidance and Q&As on the Net Price Calculator requirement in this DCL.   ED highlights responses to recurring questions that it has received in regard to the NPC which was created as a result of the Higher Education Opportunity Act of 2008.  It is pointed out that the latest template that ED has released is for 2011-2012 data.  ED typically releases a new template each January updated to collect data for the most recently completed award year.  For example, the template to collect 2012-2013 data is planned to be released in January 2014.  ED has stated that schools should update their NPC within 30 days of the template being released by ED each year.  Therefore, all schools should have updated their NPC information for 2011-2012 by now.

DCL – GEN-13-08: February 27, 2013 – Extension of Invitation to Participate in the Experimental Sites Initiative

This DCL is a further attempt by ED to gain additional participants in the Experimental Sites Initiative.  As reported in our last Special Edition Inside Report—Federal Update, ED desires to have more schools choose to participate in the Experimental Sites Initiative.  The details of this opportunity are provided in Dear Colleague Letters GEN-13-03 and GEN-13-08.  The deadline for a school to submit indication of its interest in participating is now set at April 30, 2013.  Please review the DCL for more information.

DCL – GEN-13-09: March 8, 2013 – Students with an Unusual Enrollment History Flag — “C” code on the ISIRThis DCL is a further attempt by ED to gain additional participants in the Experimental Sites Initiative.  As reported in our last Special Edition Inside Report—Federal Update, ED desires to have more schools choose to participate in the Experimental Sites Initiative.  The details of this opportunity are provided in Dear Colleague Letters GEN-13-03 and GEN-13-08.  The deadline for a school to submit indication of its interest in participating is now set at April 30, 2013.  Please review the DCL for more information.

ED has been interested in curbing fraud and abuse in the Title IV programs.  As a result, it has implemented tracking scenarios of unusual enrollment patterns.  This DCL gives instruction to schools to be used to help identify students with unusual enrollment histories, and describes how institutions must resolve the resulting ISIR ‘C’ codes for students with these enrollment histories.  Since this is new guidance, schools should review and assimilate this information to effectively address the Unusual Enrollment History Flag.  Also, you may reference our last Special Edition Inside Report – Federal Update.

DCL – GEN-13-10: March 19, 2013 – Applying for Title IV Eligibility for Direct Assessment (Competency-Based) Programs

In this DCL, ED provides guidance to schools currently participating in the Title IV programs that wish to have direct assessment (competency-based) programs considered for Title IV program eligibility. The letter outlines how institutions can have competency-based programs approved under the current regulations on direct assessment programs.  Direct Assessment is a more recent development, having been added to the law in the Higher Education Reconciliation Act of 2005, which schools may consider.  As this is an involved undertaking, schools that wish to consider a direct assessment program should review this information very carefully for steps to take.



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