Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Institutional Eligibility and Administrative Requirements - Introduction

AwardYear: 1997-1998
EnterChapterNo: 3
EnterChapterTitle: Institutional Eligibility and Administrative Requirements
SectionTitle: Introduction
PageNumbers: 1-4

The purpose of this chapter is to describe how a school becomes
eligible to participate in the Student Financial Assistance (SFA)
Programs, and to explain the administrative and fiscal requirements
of SFA Program participation. In addition, this chapter discusses
refund calculations, proper documentation and recordkeeping,
disclosure requirements, and other issues relevant to the general
administration of the SFA Programs.

SECTION 1 explains the statutory definitions for eligible institutions
and program eligibility requirements. Even if a school already
participates in the SFA Programs, it is a good idea to review this
section briefly to make sure that all programs at the school are
eligible. SECTION 2 is an overview of the general requirements for
SFA Program participation. SECTION 3 discusses cash management
requirements. SECTION 4 explains refund and repayment
calculations for students who withdraw from the school. SECTION 5
discusses the use of agreements between schools to pay a student
who is taking courses in an eligible program at more than one school.
Audits, program reviews, the Quality Assurance Program, and the
experimental sites initiative are discussed in SECTION 6. SECTION
7 discusses recordkeeping requirements. The student consumer
information requirements are explained in SECTION 8. SECTION 9
explains how to apply for SFA participation, changes that can affect
a school's participation and how to report these changes,
responsibilities that a school must fulfill when leaving the SFA
Programs, and sanctions and corrective actions taken by the



- Final regulations published November 29, 1996 make changes to
cash management requirements for SFA Program funds and
implement initiatives of Project EASI.

- Final regulations published November 29, 1996 make changes to
the financial responsibility requirements (cash reserve and
evaluation of financial responsibility for foreign schools) and
implement a combined audit submission requirement.

- Final regulations published November 27, 1996 make changes to
SFA Program recordkeeping requirements.

"Dear Colleague" Letters

- "Dear Colleague" letter GEN-96-11, published May 1996,
provides an overview of the campus security requirements,
guidance to schools on how to receive technical assistance in
administering the requirements, and the Department's enforcement

Changes to this chapter:

Section 1: Institutional and Program Eligibility

- Information on the definition of an academic year has been moved
to Section 2 of this chapter.

- A discussion of the change to the disclosure requirement for the
85/15 Rule is included.

Section 2: General Participation Requirements

- Information on the definition of an academic year has been moved
here from Section 1 of this chapter.

- Information is provided on the November 29, 1996 final
regulations amending the financial responsibility requirements
(cash reserve and evaluation of financial responsibility for foreign

- A discussion of the new standard of administrative capability
(from final regulations published November 29, 1996) that
requires schools to participate in electronic processes required by
the Department, if the processes are provided at no substantial
charge to the school, is included.

- Information is provided on Project EASI, the Department's
initiative to reengineer the student aid delivery system.

- A new payment period definition, common to all SFA Programs,
is explained.

Section 3: Cash Management

Information is provided on changes and modifications made by
regulations published November 29, 1996, including

- the establishment of limitations for FFEL Program funds,
comparable to those placed on the use of Pell Grant, Direct Loan,
and campus-based program funds, for a school on reimbursement;

- the introduction of the just-in-time payment method, a Project
EASI initiative;

- requirements for requesting funds through the new Grants and
Payment System (GAPS);

- the elimination of the requirement that a school maintain a
separate bank account for FFEL Program funds received by
electronic funds transfer (EFT);

- modifications to the exceptions to the requirement that certain
SFA Program funds be maintained in an interest-bearing or
investment account;

- changes to the requirements for disbursing SFA Program funds;

- the requirement that schools must now disburse all SFA Program
funds (except Federal Work Study) by payment period;

- new requirements for when an excused absence is counted as a
completed clock hour;

- new late disbursement requirements for all SFA Programs;

- notification to a student or parent (if applicable) of anticipated
receipt of SFA Program funds, crediting a student's account with
SFA loan funds and the deadline for the cancellation of the loan
by the student or parent;

- the elimination of the requirement that a school notify a student or
parent annually of the provisions contained in an authorization
previously provided to the school; and

- modification to requirements including: permissible early
payments of SFA Program funds, the charges for which a school
may credit a student's account, and the handling SFA credit

Financial Aid Transcripts and the NSLDS

- This section has been removed. Information pertaining to the
collection of a transfer student's financial aid history has been
consolidated in Chapter 2.

Section 4: Refunds and Repayments

- Clarification of the definition of withdrawal date is included.
Guidance is provided on the applicability of the new definition of
an SFA disbursement to the definition of an SFA recipient, and the
effects of the consolidated late disbursement definition on the
calculation of a refund or repayment.

Section 5: Agreements Between Schools

- No major changes.

Section 6: Program Reviews and Audits

- Information is provided on the new combined audit submission
requirement, including transitional implementation requirements.

Section 7: Recordkeeping and Disclosure

Information is provided on changes made by regulations published
November 27, 1996, including

- implementation of the Improving America's Schools Act of 1994,

- clarification of existing record retention requirements,

- consolidation of some requirements previously found in the
individual program regulations, and

- allowing schools to keep most records in electronic formats.

Section 8: Student Consumer Information

- Additional guidance is provided on the campus security and
student-right-to-know requirements.

Section 9: Applying for and Maintaining Participation in the SFA

- Clarification is provided on how and when to report changes to
application information to the Department.

- A description of the Department's new case management approach
to oversight is included.

Last Modified: 02/26/1998