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Since You Asked: Questions & Answers

FAME Frequently Asked Questions & Answers (FAME Inside Report_ Quarter 3_ 2013)

Below you will find the frequently asked questions and answers featured in the Q3 2013 edition of FAME’s Inside Report.


Q1Which parent’s income can be reported on the FAFSA in a situation where the student’s mother and father are divorced?  The father refuses to provide his income even though the student lives with father and the father supports him.  The mother does not live with them nor does she provide support to the student.

A1The student must use the custodial parent which is defined as the parent that the student lived with the longest over the last 12 months.  If the student lived equally with each parent, he or she would then list the parent who provided the most financial support.  In the case presented, that would be the father.  The mother’s information would not be included.  Refer to page AVG-29 of the 2013-2014 Application and Verification Guide.


Q2If an ISIR is not selected for verification, but corrections are made and the corrected ISIR is received after the last day of attendance (LDA), may the school pay the student based upon the new ISIR if they meet the late disbursement and/or Post-withdrawal Disbursement (PWD) rules, as applicable?

A2 Yes, per guidance from ED, that would meet ED’s late disbursement requirements.


Q3:  If a school owner has some financial backing involvement in a non-profit organization, can that school have its students work at that non-profit organization in FWS community service positions?

A3:  As long as the organization is a true non-profit, and the jobs meet the definition of community service, there should not be a problem per guidance from ED.  ED has not delved into that degree of specificity in its discussions with community service requirements.  However, if the school has a concern about compliance in this regard, ED recommends contacting the school’s regional ED office before pursuing placement of students in such community service positions at the organization.


Q4:  A question has arisen regarding Dear Colleague Letter GEN-12-09.  In the section discussing the ability to benefit (ATB) scenarios applicable to a student being able to be grandfathered in, the 5th enrollment scenario states:  “The student did not previously attend an eligible program at a Title IV institution but, prior to July 1, 2012, registered at a Title IV institution and is scheduled to attend an eligible program.  Note: The exception is only available for attendance in a program for which the student officially registered prior to July 1, 2012.”

The question is:  is there a time frame as to which period this may apply?  For example, a student “enrolled” or “registered” to attend a school five years ago, but never actually attended a day of class.  Would this student be grandfathered in under the prior ATB provisions even though he never attended five years ago, but now is enrolling in an eligible program (and plans to attend)?  Does that exception for grandfathering in have to do only with those students who had “enrolled” or “registered”, perhaps in May or June of 2012, for a program where they would not actually start until after July 1, 2012?  Is there a limit to that statement of where the “student did not previously attend an eligible program at a Title IV institution but, prior to July 1, 2012 registered at a Title IV institution and is scheduled to attend an eligible program”?  Or, does the grandfathering apply to anyone who may have over the years submitted application(s) for enrollment and been accepted, but never actually began attendance as a result of any of those prior times of becoming “enrolled/registered” without beginning attendance?

A4ED’s guidance has stated that the allowance for grandfathering in students under the prior ATB provisions was a very limited window to help a small number of students that registered for a Title IV program prior to July 1, 2012 who did not have a high school diploma or its equivalent, but due to timing issues got caught up in the new regulatory change.  The grandfathering provision was not designed to cover individuals that registered for a program years ago but changed their minds.  In addition, it is important to remember that this exception to use the ATB alternatives is only for those students that registered in a Title IV program prior to July 1, 2012 and then ATTENDED the SAME program in which they had registered.  If they registered for one program prior to July 1, 2012 and then attended a different program at the school, they would not fall under the grandfathering clause.  Many schools don’t even keep records of registered students who never attended after a certain amount of time.  ED’s Policy Division saw this as a very narrowly defined situation that would probably not be that common.  It really was designed to help those students that had registered earlier in 2012 but just got caught up in the regulatory change as of July 1, 2012.


Q5:  This is in regard to a scenario where a student withdraws and the school performs the required R2T4.  The school then refunded the applicable Title IV funds in a timely manner.  The institution next performed the institutional calculation and the student was due a refund based upon the institutional refund policy.  The school sent the refund check to the student but it was returned undeliverable.  The school has not been able to contact the student.  Do the requirements to not allow funds escheat to the institution or State apply to this refund

A5No, if after satisfying the requirements of 34 CFR 668.22 (Treatment of Title IV funds when a student withdraws) a school reduces a student’s charges, any refund due is not a Title IV refund.  This is because the funds have lost their Title IV identity after the Title IV credit balance was disbursed and the R2T4 funds were returned.  The refund, based upon an institutional refund calculation, is not subject to the escheating prohibition applicable to Title IV funds.   However, the school should check its State’s requirements regarding unclaimed funds (i.e., institutional refund checks returned to an institution) and whether there are State laws that would be applicable.


Q6:  What kinds of alternative documents can students (and parents) provide if they are unable to use the IRS DRT or have their IRS transcript processed at this time for 2013-2014?

A6:  At this time, there are no special exceptions for 2013-2014 beyond those noted for amended returns, identity theft, Puerto Rican returns, foreign returns, and various U.S. commonwealths, territories and island nations as outlined in the 2013-2014 FSA Handbook, Application and Verification Guide, Chapter 4.  It is important to note that the exceptions noted in the November 2, 2012 Electronic Announcement allowing signed paper tax returns and signed IRS documents (e.g., IRS screen shots or IRS letters) showing an inability to obtain a transcript was only applicable to the 2012-2013 award year.


Q7:   In the past, if students completed the on-line counseling via NSLDS, at the end they could print out a confirmation of completion with their name on it that stated “Congratulations for Completing Exit Counseling” and schools would place a copy of the certificate in their file.  Does the website offer the same option?

A7When a student completes any counseling there is a record in that the completer can retrieve for their records.  It is available to anyone who signs in and prints the document (in HTML format).  As for the school, generates and sends an acknowledgement to the school (CREC is the file type from COD) to indicate the student completed counseling.  (This is assuming that the student entered the school’s information during the counseling session.)  To receive the detailed reports, the school needs to continue to retrieve them, or have them delivered, from NSLDS.  That functionality will remain in NSLDS for at least the foreseeable future.


Q8:  Can entrance counseling be found at and exit counseling at

A8:  No, both entrance and exit counseling must now be done via if using ED’s counseling.  See the April 5, 2013 Electronic Announcement, as well as the ones on March 25, 2013 and March 15, 2013 (this one is the COD Processing Update).  You may also read more about the switch to all counseling at in the FAME “Did You Know?” blog posted on May 28, 2013.


Q9:  What is required of a school regarding disclosure of drug and alcohol abuse prevention and describing sanctions about drug and alcohol abuse?

A9:  A school is required to provide in its consumer information a description of its drug and alcohol abuse prevention program.  This should include a clear and conspicuous written notice of information on:  preventing drug and alcohol abuse; standards of conduct that clearly prohibit, at a minimum, the unlawful possession, use, or distribution of drugs and alcohol by students and employees on the school’s property or as part of the school’s activities; the legal sanctions associated with drug-related offenses; health risks; available counseling and treatment; and, institutional sanctions for non-compliance with the standards of conduct.  This information must be distributed annually directly by mail, or sent directly to each individual to the student’s specific e-mail address.  Additionally, schools are required (and, ED has been checking this in program reviews) to have at least a biennial review of its drug and alcohol abuse program to determine the program’s effectiveness and that sanctions are being enforced.  Schools that participate in Campus-Based Title IV programs must also ensure that they have a drug prevention program for its employees.

Some of the federal penalties and sanctions applicable to drug-related offenses include:

 21 U.S.C. 844

1st conviction:  Up to 1 year imprisonment and fined at least $1,000, or both.

After 1 prior drug conviction: At least 15 days in prison, not to exceed 2 years and fined at least $2,500, or both.

After 2 or more prior drug convictions:  At least 90 days in prison, not to exceed 3 years and fined at least $5, or both.

Provisions relating to increased penalties in cases of certain serious crack possession offenses, making offenders subject to fines under Title 18 or imprisonment to terms not less than 5 years and no more than 20 years, or both.

Possession of flunitrazepam shall be imprisoned for not more than 3 years, shall be fined as otherwise provided in this section, or both after mixture or substance exceeds 1 gram.

21 U. S. C. 844a

Civil fine up to $10,000

21 U. S. C. 847 Additional Penalties

Any penalty imposed for violation of this subchapter shall be in addition to, and not in lieu of, any civil or administrative penalty or sanction authorized by law.

21 U. S. C. 854 Investment of illicit drug profits

Whoever violates this section shall be fined no more than $50,000 or imprisoned not more than 10 years, or both.

21 U. S. C. 862

a.     Drug Traffickers – Denial of Federal benefits, such as student loans, grants, contracts, and professional and commercial licenses, up to 5 years for the first offense, up to 10 years for second and permanently ineligible for subsequent offenses.

b.     Drug Possessors – 1st offense is up to 1 year and 2nd and subsequent offenses are up to 5 years.

c.     Suspension of period of ineligibility (A) (B) (C)

21 U. S. C. 862a

Denial of assistance and benefits for certain drug related convictions, i.e., state program funded under the Social Security Act or food stamp program or state program under the Food Stamp Act.

For the complete information related to the above sanctions and penalties, refer to the specific US Code referenced at “Search the United States Code” and the Federal Drug-free Workplace Act of 1988 (Public Law 101-690).  Also, schools may feel free to contact FAME’s Consulting Services department for additional guidance and updates.




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