(GENERAL-23-117) Institutional Reporting and Department Treatment of Certain U.S. Army Tuition Assistance Funds for Purposes of the 90/10 Calculation

Author
Federal Student Aid
Electronic Announcement ID
GENERAL-23-117
Subject
Institutional Reporting and Department Treatment of Certain U.S. Army Tuition Assistance Funds for Purposes of the 90/10 Calculation

In this announcement, we provide instructions to proprietary institutions on how they should report tuition assistance payments delayed as a result of the U.S. Army’s ArmyIgnitED system issues and the U.S. Department of Education’s (ED) treatment of such delayed payments for purposes of 90/10 enforcement.

Background

In July 2023, new 90/10 regulations went into effect implementing changes to the Higher Education Act, which requires for-profit institutions to classify all federal funds received that were used to cover student tuition, fees, and other institutional charges as revenues subject to the 90 percent threshold in their annual 90/10 calculations. Previously, institutions were only required to classify Title IV federal student aid funds as revenues subject to the 90 percent threshold in the calculations. As required by statute, the 90/10 calculation uses the cash basis of accounting which does not consider the fiscal year (FY) in which the tuition, fees, and other institutional charges were incurred, but rather only when the cash to pay those charges is received. The calculation is based on the qualifying payments received during the institution’s FY. Institutions must report their 90/10 calculation in a required disclosure in the notes to their annual financial statements. If an institution receives more than 90 percent of its cash basis revenue from Federal sources for one year it becomes provisionally certified to participate in the federal student aid programs. If the federal revenue exceeds 90 percent for two consecutive fiscal years, it loses its eligibility to participate in the Title IV programs for at least two fiscal years.

In March 2021, the U.S. Army (Army) launched ArmyIgnitED, to replace GoArmyED as its system for processing the Army’s tuition assistance funds for participating institutions. As reported publicly and confirmed to ED by the Army, there were significant problems with the launch of ArmyIgnitED that resulted in calendar year (CY) 2021 and 2022 Army tuition assistance payments to institutions being delayed until CY 2023 and 2024. ED has confirmed with the Army that these late payments made during 2023 were solely related to the ArmyIgnitED system issues and not the fault of institutions.

ED Treatment of 90/10 Rates that Exceed 90 Percent Threshold Due to U.S. Army Tuition Assistance Funds Impacted by ArmyIgnitED System Issues

ED is aware that some institutions whose CY 2021 and 2022 Army tuition assistance payments were not received until CY 2023 and 2024, due to the ArmyIgnitED system issues, may cause those institutions’ reported revenue from Federal sources to exceed the 90 percent threshold—resulting in a failing 90/10 rate. Although the statutory provision requires the calculation to be performed using the cash basis of accounting and does not provide a mechanism for excluding the late ArmyIgnitED payments, ED does not believe that penalizing an institution in this situation is consistent with the statutory or regulatory intent of 90/10, because the failing rate was not the result of any action, practice, or fault of the institution. For public reporting purposes, the Department will clarify that the rate includes delayed tuition assistance payments and will not result in the institution being penalized. This enforcement relief is only available to an institution whose reported revenue from Federal sources exceeds the 90 percent threshold solely because of tuition assistance payments delayed by the ArmyIgnitED system issue and the institution complies with the reporting requirements outlined below.

Required Reporting of Army Tuition Assistance Funds Impacted by ArmyIgnitED System Issues and Additional Reporting for Enforcement Relief

Notwithstanding Army Tuition Assistance payments delayed as a result of ArmyIgnitED system issues, institutions must calculate their 90/10 percentage, as required by the statute and applicable regulations, to include all Federal funds received in FY 2023 or 2024 that were used to satisfy tuition, fees, and other institutional charges and make all disclosures required by the Department for that calculation in its 90/10 note to its financial statements. In order to receive the enforcement relief outlined above, an institution must also disclose in its 90/10 note to the financial statements a revised 90/10 attestation that excludes the CY 2021 or 2022 late ArmyIgnitED payments received in FY 2023 or 2024 that were used to pay tuition, fees, and other institutional charges. The additional note should include the amount of the payment and the program source, including the Assistance Listing Number for each program, that are being excluded as a result of the ArmyIgnitED system issues.

Contact Information

For questions concerning the information in this announcement, contact the Financial Analysis Division at FSAFinancialAnalysisDivision@ed.gov.