School Eligibility and Operations

This volume of the Federal Student Aid Handbook comprises topics pertaining to colleges’ general obligations in administering the Title IV student aid programs: institutional and program eligibility, administrative requirements, audits, record keeping, program reviews, and providing information to the public are all explained.

Throughout the Handbook we use “college,” “school,” and “institution” interchangeably unless some more specific use is given. Similarly, “student,” “applicant,” and “aid recipient” are synonyms. “Parents” in this volume refers to the parents of dependent students, and “you” refers to the primary audience of the Handbook: financial aid administrators at colleges. “We” indicates the United States Department of Education (Department, ED), and “federal student aid” and “Title IV aid” are synonymous terms for the financial aid offered by the Department.

We appreciate any comments that you have regarding the Federal Student Aid Handbook. We revise and clarify the text in response to questions and feedback from the financial aid community, so please contact us at fsaschoolspubs@ed.gov to let us know how to improve the Handbook so that it is always clear and informative.

This introduction only summarizes the changes and clarifications presented in more detail in the chapters. For more complete guidance, refer to the text in the chapters cited and the pertinent regulations and statutes.

Important Note: This volume does not contain specific guidance on the special provisions pertaining to the Coronavirus pandemic. For that information, schools should refer to the Department’s COVID-19 Resources for Schools, Students, and Families website.

Throughout Volume 2, we updated links from the Information For Financial Aid Professionals (IFAP) website to the new Knowledge Center.

In Chapter 2, under the “Competency-Based Education programs” section, we provided more information about “academic engagement” as defined under 34 CFR 600.2.

In Chapter 2, under the “Written Arrangements” section, we clarified that for written arrangements between an eligible Title IV institution and an ineligible entity, the number of clock hours offered by the ineligible entity must be properly characterized. In addition, we provided additional guidance as it pertains to written arrangements in which eligible institutions partner with ineligible entities to provide Title IV HEA funds for an experience prior to the matriculation of conventional studies. This information was clarified in DCL GEN-22-07.

In Chapter 2, under the “Written arrangements between domestic and foreign schools” section, we clarified that an eligible foreign institution may enter into a written arrangement with an eligible institution in the United States where the student is enrolling in the coursework, research, work, or special studies offered by that institution. However, the eligible institution in the United States can offer no more than 25 percent of the program.

In Chapter 3, under the “Readmission of service members” section, we added a link to the Frequently Asked Questions: Institutional Readmission Requirements for Servicemembers guidance available on the U.S. Department of Education’s website.

In Chapter 4, under the “Single Audit Act guidelines” section, we updated the links to the Compliance Supplement and Compliance Supplement Addendum (Addendum 1 and 2) as it pertains to audits of fiscal years beginning after June 30, 2020. The supplements supersede the 2020 Compliance Supplement (dated August 2020) and its Addendum (dated December 2020).

In Chapter 4, under the “90-10 Revenue Test” section, we provided the updated process for notifying the School Participation Division (SPD) if an institution fails to meet the 90/10 rule.

At the beginning of Chapter 5, we provided information about the new Document Center, now available on the Common Origination and Disbursement (COD) website. It is a centralized electronic repository of documents that allows school users and affiliated third-party servicers to electronically upload program compliance documents.

In Chapter 5, under the “Changing the status of a campus or branch” section, we clarified that an additional location is not the same as a branch campus. A branch campus has additional requirements that must be met in order to qualify.

In Chapter 5, under the “Changes in Accreditation” section, we provided additional clarification regarding how a school must notify the Department if it wants to change its institution-wide accreditor (primary accrediting agency) or add another such accreditor. In both cases the school must demonstrate a reasonable cause for the change.

In Chapter 6, under the “Transfer of credit policies” section, we provided updated guidance and clarified that the Department strongly recommends that schools make required disclosures widely and publicly available on their website.

In Chapter 6, under the “College Financing Plan” section, we provided updated information regarding the format of the College Financing Plan. It has been updated for 2022-2023 to include revised data elements, a responsive design, and the ability to customize the colors of the College Financing Plan to match those of your institution.

In Chapter 6, under the “Drug and Alcohol Abuse Prevention” section, we provided an update regarding the early implementation of the provision that removed the suspension of eligibility for Title IV aid for drug-related convictions that occurred while receiving Title IV aid of federal aid recipients. As it relates to federal Title IV aid programs, schools are not required to provide information and written notice to their student and employee population regarding the penalties associated with drug-related offenses and the impacts on Title IV aid eligibility.

In Chapter 6, under the “Annual student loan acknowledgement” section, we clarified that borrower completion of the annual student loan acknowledgement prior to disbursement will not be required for the 2022-23 award year and beyond.

In Chapter 6, in the “Direct Loan Exit Counseling - Required Elements" chart, we added additional exit counseling information for students as it relates to the requirements of the STOP Act.

In Chapter 6, under the “TEACH Grant Counseling” section, we clarified that TEACH Grant Conversion Counseling is available and should be completed when a student’s TEACH Grant is converted to a Direct Unsubsidized Loan.

In Chapter 6, under the “Private Education Loans” section, we clarified that Income Share Agreements (ISAs) used to finance expenses for postsecondary education are private education loans under 34 C.F.R. 601.2(b).