Spring 2011 issue of Horizons

Colleges & Universities

NewRules Trigger Additional Work For Higher Education Institutions By Brent Stevens, CPA and Matt Finke, CPA

The latest rules from the Department of Education may bring about extra work for colleges and universities, but the intent of the rules is maintain program integrity and protect students from abusive and fraudulent practices. Most of the rules, which were issued in late 2010, will be effective in July of this year and will undoubtedly affect colleges and universities administratively, as well as the management of financial aid funds. Verification of Free Application for Federal Student Aid (FAFSA) Information The rules with regard to verification are aimed at a more targeted verification process. This is in spite of numerous comments that the changes to the verification process and the elimination of a 30 percent verification cap would cause an excessive administrative burden. Based on these rules, the Department of Education will specify on each selected Individual Student Information Record (ISIR) the data elements that need to be documented. Under the changes, only one or two items from a student’s ISIR may require review by the school’s Financial Aid Staff. However, the items requiring review may be subject to additional scrutiny and require additional support in order to complete the verification process. The Department of Education is expected to publish annually, well in advance of the start of the processing cycle, the data elements subject to selection. The department concedes that, The rules are summarized below:

while these changes will result in an increase in verification volume for some schools (especially those with a high number of Pell-eligible students), the overall burden will be reduced in the long- term due to this more targeted process of verifying specific information. The effective date for the implementation of these rules related to verification, initially expected to be July 1, 2011, has been delayed until July 1, 2012. Satisfactory Academic Progress (SAP) The satisfactory academic progress requirements have been revised, and more guidance has been added to the development of these policies maintained by institutions. Significant changes to these rules require: • Each component of an institution’s SAP policy (GPA, credit hours earned, year in school, courseload, etc.) must be examined concurrently when conducting an evaluation of students’ SAP. – Practice under the previous rules allowed for an evaluation of only one criterion (such as GPA) at stated intervals (such as every award period). However, new rules state that assessments of students’ SAP should be inclusive of qualitative and quantitative criteria at each point of evaluation. • Specification of the pace that a student must progress through the educational program as well as providing a measurement for the pace at each evaluation point. – Each institution’s SAP policy should be formulated based on the maximum amount of time allowed to complete graduation.

Raise Your Expectations

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