| AwardYear: 1996-1997 EnterChapterNo: 8 EnterChapterTitle: Federal Supplemental Educational Opportunity Grant Program SectionNumber: 3 SectionTitle: Program Funds PageNumbers: 11-13 The Higher Education Act of 1965 (HEA), as amended, describes the Federal Supplemental Educational Opportunity Grant (FSEOG) Program allocation process in detail; those procedures are not repeated in the regulations. Funds are allocated directly to schools according to the statutory formulas. Schools receive their disbursements in periodic installments either in advance or as reimbursements. The U.S. Department of Education (ED) REALLOCATES funds to a school in a manner that best carries out the purposes of the FSEOG Program. [[Cash Management]] A school must maintain funds received for its administration of the FSEOG Program in accordance with the cash management provisions of 34CFR 668.164. The provisions became effective July 1, 1995 and are discussed in Chapter 3, Section 3. [[Allocation reduction for returned funds in previous award year]] As discussed in the introduction to Chapter 5, if a school returns more than 10% of its allocation for a given award year, ED will reduce the schools allocation for the second succeeding award year by the dollar amount returned. ED may waive this provision for a specific school if it finds that enforcement would be contrary to the interest of the program. ED considers enforcement to be contrary to the interest of the program only if the school returned more than 10% of its allocation due to circumstances that are beyond the schools control and that are not expected to recur. The information a school provided on its Fiscal Operations Report and Application to Participate (FISAP) for the 1994-95 award year will determine the amount of reduction, if any, of the schools allocation for the 1996- 97 award year. FEDERAL SHARE AND NON-FEDERAL SHARE [[Waiver of 25% requirement]] The federal share of FSEOGs made by a school may not exceed 75% of the total FSEOGs. The school must contribute a non-federal share (also called "institutional share") of 25%. However, ED may waive the non-federal share requirement and may authorize for an award year a federal share of 100% to a school that 1) is designated as an eligible institution under the Strengthening Institutions Program or the Strengthening Historically Black Colleges and Universities Program and 2) requests the increased federal share on the FISAP for that award year. [[Source of non-federal share]] The non-federal share of FSEOGs must be made from the schools own resources. These resources may include - institutional grants and scholarships, - waivers of tuition or fees, - state scholarships, and - funds from foundations or other charitable organizations. [[Including state scholarships]] ED has determined that all state scholarships and grants, EXCEPT for State Student Incentive Grants (SSIGs), are eligible funds that may be used to meet the non-federal share requirement of FSEOGs. SSIGs, for this purpose, are defined as the federal SSIG allocation plus the state required dollar-for-dollar matching amount. The remaining state grants are not considered SSIGs. "Dear Colleague" letter CB-95-20, issued in August 1995, provided a chart indicating what percentage of each states scholarships could be used to provide the non-federal share of FSEOG awards for the 1995-96 award year. A similar chart for the 1996-97 award year will be issued in a future Dear Colleague letter. [[Definition of FSEOG recipient]] The 1996-97 non-federal share requirement of 25% (unless the school qualifies for a waiver) may be met by one of three methods. In the following discussion of these methods, you should note that for a student to meet the definition of an FSEOG recipient, some portion of the grant awarded the student must have come from the FSEOG federal dollars. Also, by the time the FSEOGs are disbursed (regardless of what point in the award period the disbursements are made), the required match must have been accomplished; that is, the schools own resources must have been disbursed before or at the time the federal dollars are disbursed. However, it is important to note that outside resources*1* can be used to match FSEOGs even if the funds are received at a later date, provided that the school has written information about funds that the non-institutional agency or organization is awarding to the student involved. The written information must be kept on file at the school. [[Three methods of meeting institutional share]] The three methods a school may use to meet its non-federal share follow: 1. Individual FSEOG recipient basis--the school provides its share to an individual FSEOG recipient together with the federal share; that is, each students total FSEOG would consist of 25% non- federal resources and 75% federal dollars for the 1996-97 award year. 2. Aggregate basis--the school ensures that the sum of all funds awarded to FSEOG recipients in the 1996-97 award year comprises 75% FSEOG federal funds and 25% non-federal resources. For example, if a school awards a total of $60,000 to FSEOG recipients in 1996-97, it has to ensure that $45,000 comes from FSEOG federal funds and $15,000 comes from non-federal resources; if there are 100 FSEOG recipients, the entire $15,000 non-federal resource requirement can be met by awarding a total of $15,000 in non-federal resources to four FSEOG recipients. However, each FSEOG recipient must receive some FSEOG federal funds. 3. Fund-specific basis--the school establishes an "FSEOG fund" into which it deposits FSEOG federal funds and the required 25% non- federal share. Awards to FSEOG recipients then are made from the fund. ADMINISTRATIVE COST ALLOWANCE When a school calculates its administrative cost allowance for the 1996-97 award year, the school must include in its calculation the full amount of its FSEOGs--both the 75% federal share and the required 25% non-federal share. However, a school that chooses to provide more than a 25% institutional share to FSEOG recipients may not include an FSEOG institutional share in excess of 25% in its FISAP or in the calculation of its administrative cost allowance. If ED has granted a school a waiver of its required non-federal share, that school may calculate its administrative cost allowance only on the full federal portion. For additional information about the administrative cost allowance, refer to Chapter 5, Section 3. TRANSFER OF FUNDS FROM FSEOG PROHIBITED The HEA prohibits the transfer of FSEOG Program funds to any other program. Since the 1993-94 award year, schools have been prohibited from transferring FSEOG funds to the Federal Work- Study (FWS) Program. However, a school may transfer up to 25% of its FWS allocation and 25% of its Federal Perkins Federal Capital Contribution (FCC) allocation to the FSEOG Program. [[Transferring funds to FSEOG]] A school that transfers funds to the FSEOG Program from FWS during an award year must transfer any unexpended funds BACK to the FWS Program at the end of the award year. The same requirement exists for Perkins Loan FCC funds transferred to the FSEOG Program. *1* For example, state scholarships and foundation or other charitable organization funds. |