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ED Electronic Announcements


EA – Posted April 20, 2015 – (General).  150% Direct Subsidized Loan Limit:  Electronic Announcement #17 – School Misreporting of Data to COD and NSLDS

This EA is an important reminder to schools of the necessity for accuracy in transmitting data to COD and NSLDS.  Of special interest in this discussion is the data related to the academic year length and the program length for the applicable loan.  Specifically, ED details two issues it has observed in data pertaining to academic year length and listed the appropriate ways to resolve them in loan information being transmitted.  Likewise, ED has noted two other issues related to data transmitted regarding the program length in relation to the loan.  Following the descriptions of the issues, ED reiterates the expected resolution that should occur based upon the school taking the required action.  Schools would do well to review this EA and ensure it is following ED’s specified guidance that is simply a re-emphasis of, and effort to clarify, earlier communications from ED.  Failure to accurately report data as instructed may result in consequences.

EA – Posted May 19, 2015 – (General).  Notice of Proposed Rulemaking on Cash Management, Clock-to-Credit-Hour Conversion, and Repeat Coursework

This EA carries the announcement of the Notice of Proposed Rulemaking (NPRM) published in the Federal Register on May 18, 2015.  The preponderance of the NPRM is in regard to cash management issues related to third party servicers (primarily, although not entirely, related to the use of debit cards or other “access devices” for use in distributing excess funds resulting from Title IV credit balances on students’ accounts, requiring certain bank accounts, etc.).  There were also proposed changes that would simplify the clock-to-credit hour conversions ever so slightly, as well as proposals regarding simplifying the guidance related to repeated coursework.  Comments were due on July 2, 2015.  FAME provided a response to the NPRM.  The final regulations will have to take into consideration all of the comments received.  If they are to be finalized in time to be effective next July 1, 2016, the final regulations will have to be published by November 1, 2015.

EA – Posted June 5, 2015 – (Campus-Based).  Federal Perkins Loan Program Questions and Answers Available on IFAP Web Site

ED has posted a new set of questions and answers (Q&As) related specifically to the awarding of Federal Perkins Loans (Perkins).  This is especially important information when considering the currently planned phase-out of the Perkins program.  The Q&As address questions related to the use of the Administrative Cost Allowance (ACA) as the program is phased out and yet there are still “grandfathered” Perkins to be made in the future.  These Q&As also give some scenarios of who may and may not be considered for Perkins Loans based upon grandfathering.  Further scenarios are discussed and tie in to ED’s prior guidance in DCL GEN-15-03.  Schools who currently have Perkins funds will find these Q&As helpful.  They are accessible via the link in this EA posting, as well as from the “Hot Topics” list in the sidebar on the IFAP Web site.  Finally, they are also able to be accessed from the right-hand sidebar menu on the Campus-Based Processing Information page on IFAP.

EA – Posted June 10, 2015 – (General).  Enforcement of the Prohibition on Incentive Compensation Payments

One thing that schools have been interested in for some time is presented in this EA with a different twist.  It is a reversal in ED’s stance on how liabilities and/or penalties will be assessed if a school is found to be in violation of the prohibition on incentive compensation for employees based upon success in admissions, the number of students awarded financial aid, or other such similar activities.  [Schools should refresh their recollection of this section of the October 29, 2010 Program Integrity Regulations.  Discussion on this topic begins in the preamble to the regulations on page 66872.  The applicable section of the regulation is 34 CFR 668.14(b)(22).]  ED’s new stance is one that reverts to what was policy prior to 2002.  This policy in essence states that if a school is found to be in violation of the rule regarding incentive compensation, the school will now be required to repay any Title IV aid received during the period of violation.  Additionally, a school may be assessed other penalties or fines, and possibly have action taken to suspend or limit the school’s participation in Title IV.  Prior to this reversal, penalties did not necessitate the repayment of all Title IV aid received.  Schools should reacquaint themselves with the prohibition on incentive compensation, and become familiar with the guidance in this new memo from ED, dated June 2, 2015.  It is provided as an attachment to this EA posted June 10, 2015.

EA – Posted June 24, 2015 – (General).  Approved Ability-to-Benefit (ATB) tests

In this EA schools are given a list of the examinations that are approved for use as an ATB test.  These may be used in the limited circumstances in which such tests are a possible alternative for students who apply for Title IV Federal Student Aid but do not have a high school diploma or its recognized equivalent, and have not completed secondary education in a home school setting.  There are four newly approved tests listed along with two tests that have been previously approved.  Also, the tests that are no longer accepted as approved ATB tests are named.  The tests listed should be considered in conjunction with the guidance of regulations and the information in Dear Colleague Letters GEN-15-09 and GEN-12-09.  Lastly, there is a special note for students whose native language is Spanish regarding the new tests that are now available in Spanish (in addition to the English version).  This is in regard to prior guidance stipulated in GEN-11-08.

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