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

Institutional Eligibility and Administrative Requirements - General Participation Requirements

AwardYear: 1997-1998
EnterChapterNo: 3
EnterChapterTitle: Institutional Eligibility and Administrative Requirements
SectionNumber: 2
SectionTitle: General Participation Requirements
PageNumbers: 27-56


A school that wishes to participate in the SFA Programs must meet
certain requirements for participation. For example, a school must
enter into a program participation agreement and meet requirements
for financial responsibility and administrative capability. In addition,
a school's academic year and payment periods must conform to
specific definitions so that SFA Program funds are disbursed
properly. Participation standards are important because all SFA
funds received by a participating school are held in trust by that
school for the intended student beneficiaries (except for allowed
administrative expense reimbursement). Most general requirements
for SFA Program participation are found in 34 CFR Part 668.

Schools are permitted to contract with consultants for assistance in
administering the SFA Programs. However, the school ultimately is
responsible for the use of SFA funds and will be held accountable if
the consultant mismanages the programs. (See the "Contracts with
Third-Party Servicers" discussion on page 3-50 for more details.)

THE PROGRAM PARTICIPATION AGREEMENT

An eligible school must enter into a Program Participation
Agreement (PPA) with the Department to participate in any SFA
Program other than the State Student Incentive Grant (SSIG)
Program or the National Early Intervention Scholarship Program
(NEISP). The PPA covers the school's participation in the following
programs: Pell Grant, Federal Supplemental Educational Opportunity
Grant (FSEOG), Federal Work-Study (FWS), Federal Perkins
(Perkins), and the Federal Family Education Loan (FFEL) Program.
Currently, a school that participates in the Direct Loan Program does
so through an addendum to the PPA.

[[Purpose & scope of the PPA]]
Under the PPA, the school agrees to comply with the laws and
regulations governing the SFA Programs. When entering into a PPA,
the school must demonstrate that it is financially responsible and
administratively capable of providing the education it promises and
of properly managing the SFA Programs. After being certified for
SFA participation, the school must administer SFA funds in a
prudent and responsible manner. Under certain circumstances, for
example, when a school stops providing education, a school's PPA
automatically terminates (for more information, see Section 9.)

[[PPA requirements]]
The PPA lists some of the basic administrative requirements of SFA
participation. Some of these are discussed in more detail in this or
other areas of this Handbook, as noted below:

1. The school will provide timely information on its
administrative capability and financial responsibility to the
Department, and to the appropriate state, guaranty, and accrediting
agencies. (Section 2)

2. If the school advertises job placement rates to attract students, it
must provide a prospective student with any relevant information
on state licensing requirements for the jobs for which the offered
training will prepare the student.

3. The school cannot deny SFA funds on the grounds that a
student is studying abroad in an approved-for-credit program.
(Section 5)

4. To begin participation in the FFEL Programs (or if a school
changes ownership or changes its status as a parent or subordinate
institution), the school must develop a default management plan
for approval by the Department and must implement the plan for
at least two years. (Chapter 9)

5. The school must acknowledge the authority of the
Department and other entities to share information regarding
fraud, abuse, or the school's approval to participate in the SFA
Programs. (Section 6)

6. The school may not knowingly employ or contract with (in the
administration of or receipt of SFA funds) any individual, agency,
or organization that has been convicted of or pled guilty or nolo
contendre to a crime or was judicially determined to have
committed fraud involving the misuse of SFA funds.

7. The school must, in a timely manner, complete surveys under
the Integrated Postsecondary Education Data System (IPEDS) or
any other data collection effort of the Department.

8. If the school offers athletically related student aid, it must
annually compile data concerning its revenues and expenses
related to athletics; this data must be audited every three years and
made available to the Department and to the public. (Section 8)

9. The school cannot penalize in any way a student who is unable
to pay institutional costs due to compliance with the SFA Program
requirements, or due to a delay in federal aid disbursement caused
by the school.

10. The school cannot pay commissions or other incentives based
directly or indirectly on securing enrollment or financial aid
(except when recruiting foreign students ineligible for SFA funds)
to persons engaged in recruiting, admission, or financial aid
administration.

11. The school must comply with the requirements of the
Department, as well as those of accrediting agencies. (Section 1)

12. The school must have a fair and equitable refund policy in
accordance with regulations. (Section 4)

13. Schools cannot charge for processing or handling any
application or data used to determine a student's SFA eligibility.
For instance, the school may not charge (or include in the student's
cost of attendance) a fee to certify a loan application, complete a
deferment form, process a Pell Grant payment, verify an
application, or send or request a financial aid transcript.

14. A student may always use the Free Application for Federal
Student Aid (FAFSA) to apply for SFA funds. However, a school
may require additional data that are not provided on the federal
form to award institutional or state aid. Institutional charges for
collecting such data must be reasonable and within marginal costs.

The above list is not exhaustive; schools must carefully review ALL
of the requirements listed on their PPA and those specified in 34
CFR 668.14. In addition, a school must meet any requirements for
participation specific to an individual SFA Program.

[[School must make GED program available]]
Another participation requirement found in the PPA requires a
school that admits students without a high school diploma or its
recognized equivalent (based on their ability to benefit) to make a
GED preparatory program available to its students. The course does
not have to be provided by the school itself, and the school is not
required to pay the costs of the program. The GED program must be
offered at a place that is convenient for the students and the school
must take reasonable steps to ensure that its students have access to
the program, such as coordinating the timing of its program offerings
with that of the GED program. The school must provide information
about the availability of the GED program to affected students. The
GED program must be proven successful in preparing its students to
obtain a GED--such programs include GED programs that are
conducted by state and local secondary school authorities, as well as
programs for which the school has documentation that statistically
demonstrates the success.

The law does not require a school to verify that a student is enrolled
in a GED program or to monitor the student's progress in the
program. A student admitted based on his or her ability to benefit but
who does not have a high school diploma or its recognized
equivalent is not required by law to enroll in a GED program, but the
school may choose to make this an admissions requirement. A
student may not receive SFA funds for the GED program although
he or she may be paid for postsecondary courses taken at the same
time as the GED coursework, including remedial coursework*1* AT
THE SECONDARY LEVEL OR HIGHER.

When a school signs the PPA, it also agrees to comply with the civil
rights and privacy requirements contained in the Code of Federal
Regulations (CFR), which apply to all students in the educational
program, not just to SFA recipients.

FINANCIAL RESPONSIBILITY

[[Standards of financial responsibility]]
In order to participate in the SFA Programs, a school must
demonstrate that it is financially responsible. To provide the
Department with the information necessary to evaluate a school's
financial responsibility, schools are required to submit financial
information to the Department every year. Final regulations
published November 29, 1996 require a school to submit an audited
financial statement as part of a combined submission that also
includes the school's compliance audit. The combined submission
must be submitted to the Department within six months of the end of
the school's fiscal year. Previously, a school's audited financial
statement was a separate submission, due no later than four months
after the fiscal year ended. See Section 6 for more information on
required audit submissions.

[[NEW]]
A notice of proposed rulemaking (NPRM) published September 20,
1996, proposed implementation of new financial responsibility
standards. In response to public comment, the comment period on
some portions of the NPRM was extended through April 14, 1997.
Final regulations for some portions of this NPRM were published
November 29, 1996 and include

- changes to the performance alternative to maintaining a cash
reserve to make refunds, and

- new financial responsibility standards for foreign schools.

What follows is a general overview of the financial responsibility
standards. Schools should refer to 34 CFR 668.15 for complete
information.

[[Three categories]]
The financial responsibility standards may be divided into three
categories: (1) GENERAL STANDARDS (basic financial standards
that all schools are required to meet), (2) TYPE-SPECIFIC
STANDARDS (standards that apply specifically to each type of
school--for-profit, nonprofit, and public), and (3) PERFORMANCE
AND AFFILIATION STANDARDS (standards to evaluate a
school's past performance and persons affiliated with the school).

[[General standards for all schools]]
To prove financial responsibility, a school must demonstrate that it is

- providing the services described in its official publications and
statements,

- providing the administrative resources necessary to comply with
the requirements for SFA participation,

- meeting all of its financial obligations, which include but are not
imited to making required refunds and making repayments to
cover SFA Program liabilities, and

- current in its debt payments.

A school must also demonstrate that it has not had a statement by the
accountant in its audit report for the school's most recently
completed fiscal year expressing substantial doubt about the school's
ability to continue as a "going concern," or a disclaimed or adverse
opinion.

[[Letter of credit]]
In addition, a school must post a letter of credit equal to 25% of the
SFA refunds that the school was required to make for the past fiscal
year. A school does not have to post this letter of credit if it meets
one of the following exceptions:

[[Exception to letter of credit requirement]]
Exception 1: The school meets a performance alternative whereby it
demonstrates that it has sufficient cash reserves to make refunds. A
school is considered to have sufficient cash reserves if it
demonstrates, through audits for the two most recent fiscal years, that
for the past two years the school has been financially responsible and
has paid all required refunds on time (see Section 4 for more
information on payment of refunds).

[[NEW]]
The November 29, 1996 final regulations provide for a small margin
of error in determining that a school has paid all required refunds on
time. A school will not have to post the letter of credit if

- - there is less than a five percent error rate in the sample of
refunds examined by a reviewer or auditor (i.e., the school
failed to make timely refunds to less than five percent of the
students in the sample), or

- there is only one late refund in the sample of refunds examined
by a reviewer or auditor, and

- the reviewer or auditor did not note a material weakness or a
reportable condition in the school's report on internal controls that
is related to refunds.

If a school has not paid refunds on time, the school must post the
25% letter of credit. However, if a school has not demonstrated
financial responsibility, the school is required to post a letter of credit
in accordance with the letter of credit exemption to the general
financial responsibility standards discussed below (i.e., equal to at
least one-half of the SFA Program funds received by the school
during the last complete award year).

If it is determined through an audit or review that a school no longer
qualifies for the performance alternative, the school must post the
25% letter of credit no later than 30 days after notification of the
finding, or no later than 30 days after the school's compliance audit is
due, if it was the auditor that conducted the school's compliance
audit who determines that the school no longer qualifies. A school
must send the letter of credit to

U.S. Department of Education
Institutional Participation and Oversight Service
P.O. Box 23800
L'Enfant Plaza Station
Washington, DC 20026
ATTN: Director, IPOS

In addition to posting the letter of credit, if a guaranty agency or state
review determines that the school is no longer qualified for the
performance alternative, the school must notify the Department of
the guaranty agency or state that conducted the review.

Exception 2: The Department determines that the state in which the
school is located (and is legally authorized to operate) has a tuition
recovery fund that ensures that the school is able to pay all required
refunds, and that the fund is acceptable to the Department, and the
school contributes to the fund.

When a state submits a tuition recovery fund for evaluation by the
Department, the Department will consider the extent to which the
recovery fund

- provides refunds to both in-state and out-of-state students,

- complies with SFA requirements for the order of return of refunds
to sources of assistance, and

- will be replenished if any claims arise that deplete the fund.

Exception 3: The school has its liabilities backed by the full faith and
credit of the state, or an equivalent government entity.

[[Type-specific standards]]
In addition to the general standards of financial responsibility, a
school must meet the requirements specific to the school type (for-
profit, nonprofit, or public), as explained below. IN LIEU OF
MEETING THESE SPECIFIC STANDARDS, A SCHOOL MAY
DEMONSTRATE THAT IT HAS A SUPERIOR BOND RATING,
AS DEFINED IN REGULATIONS.

A for-profit school is financially responsible if it demonstrates
- an "acid test" ratio of at least 1:1,
- a positive tangible net worth, AND
- no operating losses over either or both of its two latest fiscal
years that, in sum, decrease the school's tangible net worth by
more than 10%.

A nonprofit*2* school is financially responsible if it demonstrates
- an "acid test" ratio of at least 1:1, AND
- a positive unrestricted current fund balance or positive
unrestricted net assets, OR the school has not had an excess of
current fund expenditures over current fund revenues over both
of its two latest fiscal years that total more than 10% of either
the unrestricted current fund balance or the unrestricted net
assets.

A for-profit school is financially responsible if it demonstrates
- liabilities backed by the full faith and credit of a state, or by an
equivalent governmental entity,
- a positive current unrestricted fund balance if reporting under
the Single Audit Act, OR
- a positive unrestricted current fund in the state's Higher
Education Fund.
OR, if it submits to the Department a statement from the state
Auditor General that the school has met all of its financial
obligations during the past year, and that it continues to have
sufficient resources to meet all of its financial obligations.

[[Exception to general & type-specific standards]]
A currently participating school that does not meet one or more of
the general or the specific standards (excluding the cash reserve
requirement) is still financially responsible if

- the school submits to the Department an acceptable irrevocable
letter of credit equal to at least one-half of the SFA Program funds
received by the school during the last complete award year, or

- demonstrates (in accordance with the regulations) that the school
has sufficient resources to ensure that it will not close
precipitously.

[[Exception to acid test ratio]]
A school that does not meet the acid test requirement is still
financially responsible if it provides a two-year or four-year
associate or baccalaureate degree program and the school can
demonstrate to the satisfaction of the Department that

- there is no reasonable doubt as to its continued solvency and
ability to deliver quality educational services,

- it is current in its payment of all current liabilities, including
student refunds, repayments to the Department, payroll, and
payment of trade creditors and withholding taxes, and

- it has substantial equity in school-occupied facilities, the
acquisition of which was the direct cause of its failure to meet the
acid test ratio requirement.

[[Performance & affiliation standards]]
A school's financial responsibility is also evaluated based on the past
performance of the school and persons affiliated with the school. A
school is not financially responsible if a person who exercises
substantial control over the school (or any members of the person's
family alone or together) owes a liability for an SFA Program
violation, or has ever exercised substantial control over another
school (or a third party servicer) that owes a liability for an SFA
Program violation, unless that person, family member, institution, or
servicer demonstrates that the liability is being repaid in accordance
with an agreement with the Department.

OWNERSHIP INTEREST -- A share of the legal or beneficial
ownership or control of, or a right to share in the proceeds of the
operation of, a school or a school's parent corporation; including (but
not limited to) sole proprietorship, interest as tenant, partnership, or
interest in a trust.

SUBSTANTIAL CONTROL -- Direct or indirect control over at
least 25% ownership interest (either alone or with family members);
representation (under voting trust, power of attorney, or proxy) of a
person who individually or with a group has at least 25% ownership
interest; status as CEO or other executive officer or member of a
board of directors of an entity holding at least 25% ownership
interest.

[[Substantial control/financial guarantees]]
The Secretary can require financial guarantees from the owners of a
school or from other persons with substantial control over the school.
The same persons may be required to assume personal liability for
financial losses to the federal government and students, and for
civil/criminal monetary penalties authorized under the HEA.

Such financial guarantees will not be required for a school that

- has not been subject to a limitation, suspension, or termination
action by the Department or a guaranty agency in the last five
years,

- has not had, in the last two SFA Program reviews or audits,
findings that required a repayment of more than 5% of its SFA
funds for any year,

- has not failed to resolve any compliance problems identified in
program reviews or audit reports,

- meets, and has met for the last five years, the financial
responsibility requirements given above, and

- has not been cited during the last five years for failing to submit
audits as required.

[[Exceptions to substantial control standard]]
A school that does not meet the requirement that persons who
exercise substantial control over the school may not owe a liability
for an SFA Program violation is still financially responsible if the
school

- notifies the Department that the person repaid to the Department
an acceptable portion of the liability, in accordance with the
regulations,

- notifies the Department that the liability is currently being repaid
in accordance with a written agreement with the Department, or

- demonstrates why the person(s) who exercise substantial control
should nevertheless be considered to lack that control.

[[Audited financial statement required]]
A school must submit an audited financial statement on an annual
basis to provide the Department with information necessary to
evaluate the school's financial responsibility. Final regulations
published November 29, 1996 have made changes to audit
submission requirements. (For more information, see Section 6.)

[[Financial responsibility for foreign schools]]
[[NEW]]
The November 29, 1996 final regulations provide modified financial
responsibility requirements for foreign schools. A foreign school
must meet the financial responsibility standards for domestic schools
unless the school received less than $500,000 (in United States
dollars) in SFA Program funds during its most recently completed
fiscal year. A school that received less than $500,000 will have its
financial responsibility determined through the Department's
examination of the school's audited financial statement for the
school's most recently completed fiscal year, and may have its
audited financial statement prepared according to the standards of the
school's home country. A foreign school that received $500,000 or
more in SFA Program funds during its most recently completed
fiscal year must have its audited financial statement translated and
presented for analysis under U.S. Generally Accepted Accounting
Principles (GAAP) and Generally Accepted Government Auditing
Standards (GAGAS).

[[Fidelity bond coverage]]
In the past, schools were required to maintain fidelity bond coverage
for its employees. This is no longer a federal requirement for schools
that participate in the SFA Programs. However, some schools are
still required to maintain fidelity bond coverage because state laws
require it. Even if it is not required to do so, a school may choose to
maintain fidelity bond coverage to protect itself when losses occur
resulting from a lack of integrity, honesty, or fidelity on the part of
the school's employees or officers.

[[Changes in control]]
A school must report any changes of control under which a person
acquires the ability to affect substantially the actions of the school.
Such changes in control could call into question the school's
financial responsibility. (For more information, see Section 9.)

STANDARDS OF ADMINISTRATIVE CAPABILITY

As directed in the law, the Department has developed procedures and
requirements concerning the assessment of a school's administrative
capability, taking into consideration the school's past SFA-related
performance.

[[NEW]]
Final regulations published November 29, 1996 added a new
standard of administrative capability. To be considered
administratively capable to participate in an SFA Program, a school
must participate in all electronic processes that are required by the
Department, if the processes are provided at no substantial charge to
the school.

[[Required electronic processes]]
The use of electronic processes is integral to achieving the Project
EASI goal of an integrated student aid delivery system for students
and schools. (For more information on Project EASI, see page 3-41.)
The Department believes that widespread use of electronic processes
will result in reduced burden on students and schools, provide a
higher level of service to students, and result in improved school
administration and accountability.

The Department will identify the required electronic processes in
future notices published in the Federal Register. Notification in the
Federal Register will furnish schools with the information necessary
to make internal preparations for system configurations and
adjustments to record layouts. It will include the system requirements
for participation in the electronic process. The Department expects to
be able to provide notice of electronic processes in which schools are
expected to participate before December 1 prior to the award year in
which participation must begin.

As electronic processes are announced for implementation, the
Department will provide software where needed. A school is not
restricted to using software provided by the Department to
participate in an electronic process required by the Department. The
school may also use software developed by the school or its vendor
in accordance with specifications provided by the Department.

The Department will provide training on required electronic
processes as needed. Training dates will be announced and made
available in all ten of the Department's regions.

[[Coordination of aid]]
Another standard of administrative capability requires that an eligible
school designate a capable individual*3* to administer the SFA
Programs and to coordinate aid from these programs with the
school's other federal and nonfederal student aid programs. The
school's administration must be coordinated in such a way that all the
information it receives concerning a student's SFA eligibility--from
any school office--is communicated to the financial aid
administrator. To properly package and most effectively use the
various types of student assistance (federal, school, state, private,
etc.), a financial aid administrator must be aware of all sources of aid
at the school and must be able to coordinate with all financial aid
programs a school offers to ensure that a student's aid does not
exceed his or her need.

[[Consistency of student information]]
The school must have a system of identifying and resolving
discrepancies in the SFA-related information received by various
school offices. Such a system would include a review of all financial
aid and need analysis documents, federal and state income tax forms,
and documents relating to admissions, citizenship, and previous
educational experience. For instance, if a student receives veterans
benefits through one school office, that office must notify the aid
administrator of these benefits to ensure that the amounts are
correctly reported on the student's aid application and are counted as
a resource for the campus-based programs and estimated financial
assistance for the Direct Loan and FFEL programs. As another
example, the school's admissions or registrar's office must provide
the financial aid office with any information that it has affecting a
student's eligibility--the student's enrollment in an ineligible
program, for instance, or past educational experience.

[[OIG referrals]]
If the school finds that a student may have engaged in fraud or other
criminal misconduct in applying for SFA funds, it must refer this
information to the Department's Office of Inspector General (OIG),
which will in turn notify other officials as appropriate. (Please note
that this requirement does not preclude the school from notifying
other law enforcement agencies as necessary.) Some examples of
fraudulent information include the use of false identities, forgery of
signatures or certifications, and false claims of income, citizenship,
or independent student status.

[[Counseling]]
The school must provide adequate financial aid counseling to all
enrolled and prospective students and their families. Counseling
must include, at a minimum, information about the source and
amount of each type of aid offered, the method by which aid is
determined and disbursed or applied to a student's account, and the
rights and responsibilities of the student associated with the student's
enrollment and receipt of financial aid. This information should
include a description of the school's refund policy, satisfactory
progress standards, and any other conditions or factors that may
affect the student's aid package. The school must also provide
entrance and exit counseling for student borrowers in the Perkins,
FFEL, and Direct Loan programs. For a complete discussion of loan
counseling requirements, see Chapter 6 (Perkins Loans), Chapter 10
(FFEL), Chapter 11 (Direct Loans) and Direct Loan entrance and
exit counseling guides.

[[Adequate staffing]]
To manage a school's aid programs effectively, the aid administrator
must be supported by an adequate number of professional,
paraprofessional, and clerical personnel. An "adequate" staff depends
on the number of students aided, the number and types of programs
in which the school participates, the number of applicants evaluated
and processed, the amount of funds administered, and the type of
financial aid delivery system the school uses. What may be adequate
at one school may be completely insufficient at another. The
Department will determine, on a case-by-case basis, whether a school
has an adequate number of qualified persons, based on program
reviews, audits, and information provided on the school's application
for approval to participate in the SFA Programs.

[[Separation of function]]
In addition to having a well-organized financial aid office staffed by
qualified personnel, a school must ensure that its administrative
procedures for the SFA Programs include an adequate system of
internal checks and balances. This system, at a minimum, must
separate the functions of AUTHORIZING PAYMENT and
DISBURSING OR DELIVERING FUNDS so that no one person or
office exercises both functions for any student receiving SFA funds.
Small schools are not exempt from this requirement even though
they may have limited staff. Individuals working in either
authorization or disbursement may perform other functions as well,
but not both authorization AND disbursement. If a school performs
any aspect of these functions via computer, no one person may have
the ability to change data that affect both authorization and
disbursement.

[[Satisfactory progress and financial aid history]]
Two institutional requirements are directly related to student
eligibility: satisfactory academic progress and financial aid history.
An eligible school must have a policy to measure the academic
progress of its students, according to the elements of a reasonable
standard of satisfactory progress as provided in the regulations. In
addition, when a student transfers from one school to another, the
new school must receive a financial aid history for the previous
schools the student has attended before it disburses Federal Pell
Grant, Direct Loan, FFEL, or campus-based funds to the student or
certifies a PLUS Loan application. See Chapter 2 for an overview of
satisfactory progress and financial aid history requirements.

A school is not administratively capable when

[[High default rates]]
- the cohort default rate for Perkins Loans made to students for
attendance at the school exceeds 15% (see Chapter 6 for details),
or

- the cohort default rate for Stafford/SLS loans or for Direct Loans
made to students for attendance at the school equals or exceeds
25% for one or more of the three most recent fiscal years (see
Chapter 10 for details).

If a school is not administratively capable SOLELY because of a
high default rate, the Department will provisionally certify the
school.

In addition to affecting a school's administrative capability and
limiting the school's participation in the SFA Programs, a high
default rate may make a school ineligible to participate in the FFEL
or Direct Loan programs or cause the Department to limit, suspend,
or terminate a school's participation in the SFA Programs. See
Chapters 10 and 11 for detailed information on default requirements.

[[Default management plan required]]
In the past, a school with a Stafford/SLS default rate of specified
percentages was required to implement some or all of the default
reduction measures of 34 CFR Part 668, Appendix D of the General
Provision regulations. Final regulations published December 1, 1995
that revised several aspects of the Department's default prevention
and reduction measures removed these requirements beginning with
the 1996-97 award year. However, new schools are still required to
develop a default management plan prior to certification. Also, a
school that undergoes a change in ownership that results in a change
in control, or a school that changes its status as a main campus,
branch campus, or additional location must also develop a default
management plan.

[[Calculating the withdrawal rate]]
New schools (schools that seek to participate in an SFA Program for
the first time) must have an undergraduate withdrawal rate for
regular students of no more than 33% for an award year in order to
be considered administratively capable.

When calculating the withdrawal rate, all regular, enrolled students
must be included. The definition of "enrolled" does not require either
payment of tuition or class attendance; therefore, the withdrawal rate
calculation must include enrolled students who have not yet paid
tuition or who did not actually begin attending classes. A student is
considered to have withdrawn if he or she officially withdraws,
unofficially drops out, or is expelled from the school or receives a
refund of 100% of his or her tuition and fees (less any permitted
administrative fee). A student who withdraws from one or more
courses or programs, but does not withdraw entirely from the school,
does not meet the definition of "withdrawn." Note that the 33%
withdrawal rate applies to all enrolled, regular students--not just to
SFA recipients.

Enrolled--a student enrolls when he or she completes the
registration requirements (except payment of tuition and fees) at
the school. Correspondence students are enrolled if they have been
admitted to the program and have submitted one lesson (that was
completed without the assistance of a school representative).

Debarment And Suspension Certification

[[Debarment of schools or its principals]]
Debarment and suspension requirements are also a part of the
administrative capability standards. Debarment and suspension
actions are imposed against individuals who the government
determines constitute a current risk to federal agencies based on the
individual's actions. The Department gives effect to debarment and
suspension actions by other agencies that have been imposed under
procedures that provide due process protections equivalent to those
afforded by the Department.

Before a school may receive Pell Grant or campus-based funding, a
school must certify that neither the school nor its employees have
been debarred or suspended by a federal agency. This certification is
on the PPA and, for schools participating in the campus-based
programs, is included on ED Form 80-0013, which is a part of the
FISAP package mailed to schools each summer.

If the school or its principals have been suspended, debarred, or
proposed for debarment by one federal agency, the school is no
longer eligible to participate in ANY SFA Program. The principals
of the school include the owners, the directors, officers, partners,
employees, or any other person with primary management or
supervisory responsibilities. A principal may also be someone who is
not employed by the school, but who has critical influence on or
substantive influence over a covered transaction (such as the receipt
of Pell Grant or campus-based funds).

If a school discovers that a person employed in a primary
management or supervisory capacity has been suspended or debarred
by a federal agency, the school must remove that person from such a
position or risk losing its SFA eligibility.

Similar debarment and suspension procedures apply to debarments
and suspensions of lenders or loan servicers under the FFEL
Programs.

[[Checking prospective employees or contractors]]
To protect itself, a school might ask prospective employees and
contractors about previous debarment or suspension, either in person
or on a written application. A school may also call the Department to
find out if an individual or organization is on the Nonprocurement
List. The debarment or suspension of a person who is not a principal
of the school and who does not work in the financial aid office will
not affect the school's SFA eligibility, so long as that person is not
involved in any covered transactions. The regulations list the
particular transactions from which a debarred or suspended entity is
excluded under the SFA Programs.

[["Lower-tier covered transactions"]]
A school must not enter into LOWER-TIER COVERED
TRANSACTIONS with a debarred or suspended individual or
organization. A lower-tier covered transaction is any transaction
between a participant in a covered transaction (such as the school)
and another individual or organization, if that transaction stems from
a covered transaction. Examples of common lower-tier covered
transactions are a school's contracts with a financial aid consultant
service or with a loan collection or billing agency. A school must
obtain a certification from any lower-tier organization if the amount
of the lower-tier transaction is $25,000 or more. (The required
certification clause is given on page 25 of "Dear Colleague" letter
GEN-89-21.) The lower-tier organization must inform the school in
writing if the organization or its principals are debarred or
suspended. Therefore, the certification does not need to be renewed
from year to year.


*1* It is the school's responsibility to determine whether a remedial
program is at the secondary level. However, if the state, the school's
accrediting agency, or the state agency recognized for the approval
of public postsecondary vocational education determines that a
remedial program is at the elementary level, the school must abide by
that determination. For more on remedial coursework, including the
admission of ability-to-benefit students, see Chapter 2.

*2* To demonstrate its compliance with the financial responsibility
standards, a nonprofit school must prepare a classified statement of
financial position in accordance with generally accepted accounting
principles or provide the required information in notes to the audited
financial statement.

*3* An individual is "capable" if he or she is certified by the state (in
which the school is located), if state certification is required. Other
factors include the individual's successful completion of SFA
Program training provided or approved by the Department, and
previous experience and documented success in SFA Program
administration.

Section 2: General Participation Requirements
pages 3-41 to 3-56


PROJECT EASI

[[NEW]]
Project EASI (Easy Access for Students and Institutions) is an
initiative of the Department to pursue a collaborative effort among a
diverse group of government, business, and educational leaders to
reengineer the postsecondary student aid delivery system to meet the
needs of its primary customers, the students and their families. Many
of the initiatives of Project EASI, such as a definition of a common
payment period for all SFA Programs and the required use of the
Department's electronic services by schools, will affect the
participation of schools. The reengineered delivery system will meet
the needs of students and their families by providing an integrated
system to facilitate the ability of students and their families to plan
for postsecondary education, choose among postsecondary
educational programs and schools, and finance their choices. This
integrated system will be available for all users of the delivery
system including students and their families, state agencies, and
others. Project EASI will reduce delivery system costs to all
participants, reduce burden (including regulatory burden), reduce
fraud and system vulnerability, and enhance management capabilities
of the Department and other users of the system, including schools
and states.

[[Key elements of Project EASI]]
The following key elements will be part of a reengineered student aid
delivery system:

- Every student will have his or her individual student account. The
individual student account will contain all the student's data in the
system, and all activity in the system concerning the student will
be processed through his or her individual student account.
Individual student accounts will be the basis for integrating the
delivery system.

- A student will be able to provide current information to, and
receive current information from, all system users (for example,
his or her school) through his or her individual account.

- The data in the individual student accounts will reflect
standardized data definitions for all system users, and data
reported using common reporting records.

- The delivery system will not be program specific; it could be used
to deliver funding under any student assistance program.

- To the extent practicable, the delivery system will use advanced
technology to automate data processing and will be a paperless
system.

- Strict security, such as encryption wand controlled access to the
data, will be designed as part of the system.

Additional information, including a more detailed description of
Project EASI, can be found at http://easi.ed.gov on the Project EASI
World Wide Web home page.

DEFINITION OF A PAYMENT PERIOD

[[NEW]]
Final regulations published November 29, 1996 include a new
definition of a payment period that is applicable to all SFA
Programs, except FWS. A common definition of a payment period
provides a foundation for further simplification of the administration
of SFA Program funds. For example, the same final regulations also
provide that all SFA Program disbursements be made on a payment
period basis (for more information, see Section 3). The Department
believes that these disbursement rules will aid students in managing
their funds and may reduce overborrowing. Note that FFEL and
Direct Loan disbursements must still be made in accordance with the
specific disbursement rules for those programs (see Chapter 10 for
specific information on FFEL disbursements, and Chapter 11 for
specific information on Direct Loan disbursements).

The new definition is based on the definition used for years for the
Pell Grant Program, with minor modifications. There are two sets of
requirements: one for term-based credit hour programs, and one for
nonterm credit hour programs and all clock hour programs. Unlike
the previous Pell Grant Program definition, there is no separate
definition for clock hour programs that are offered in terms.

For a program offered in semester, trimester, quarter, or other
academic terms and measured in credit hours, the payment period is
the term. For example, if a loan period includes all three quarters of
an academic year, the loan must be disbursed in three substantially
equal payments. This is a change for any quarter-based school that
has been disbursing the loan funds for all three quarters in two
disbursements.

[[The chart on page 3-43 is currently unavailable for viewing. Please reference
your paper document for additional information.]]

[[Nonstandard terms]]
Programs that are offered in modules are not counted as programs
measured in terms. The phrase "other academic terms" (also known
as nonstandard terms) refers to those structured educational intervals
at a school that do not fit into a normally defined semester, trimester,
or quarter term. For example, other academic terms could include six
five-week terms.

Payment periods for programs measured in credit hours without
terms and all clock hour programs vary depending on whether the
length of the program is

- one academic year or less,

- a multiple of a full academic year,

- longer than an academic year with a remainder shorter than or
equal to one half of an academic year, or

- longer than an academic year with a remainder shorter than an
academic year, but longer than one half of an academic year.

[[Academic year or less]]
If the program is an academic year or less in length, the first payment
period is the period of time in which the student completes the first
half of the program, as measured in credit or clock hours. The second
payment period is the period of time in which the student completes
the second half of the program as measured in credit or clock hours.

[[The chart on page 3-44 is currently unavailable for viewing. Please reference
your paper document for additional information.]]

For example, if a program is 600 clock hours and the academic year
is defined as 900 clock hours, the first payment period is the period
of time needed for the student to complete the first 300 clock hours.
The second payment period would be the period of time needed for
the student to complete the last 300 clock hours (see example one
below). If the program was equal to the academic year (900 clock
hours), the first payment period would be the period of time needed
for the student to complete the first 450 clock hours. The second
payment period would be the period of time needed for the student to
complete the second 450 clock hours (see example two below).

[[The graphic "Example - One academic year or less" on page 3-44 is
currently unavailable for viewing. Please reference your paper document
for additional information.]]

[[Multiples of a full academic year]]
If the program is equal to two or more complete academic years, for
the first academic year and any subsequent academic year, the first
payment period is the period of time in which the student completes
the first half of the academic year, as measured in credit or clock
hours. The second payment period is the period of time in which the
student completes the second half of the academic year as measured
in credit or clock hours.

For example, if a program is 1800 clock hours and the academic year
is defined as 900 clock hours, the first payment period for both the
first and subsequent academic year is the period of time needed for
the student to complete the first 450 clock hours. The second
payment period would be the period of time needed for the student to
complete the next 450 clock hours (see example below).

[[The chart "Payment periods for nonterm credit hour programs
and all clock hour programs longer than one academic year" on
page 3-45 is currently unavailable for viewing. Please reference
your paper document for additional information.]]

[[The graphic "Example - Multiples of an academic year" on
page 3-45 is currently unavailable for viewing. Please reference your
paper document for additional information.]]

[[Longer than academic year with remainder]]
If the program is longer than an academic year, but has a remaining
portion of the program that is not equal to an academic year, for the
first academic year and any subsequent full academic year, the first
payment period is the period of time in which the student completes
the first half of the academic year, as measured in credit or clock
hours. The second payment period is the period of time in which the
student completes the second half of the academic year as measured
in credit or clock hours. For the remaining portion of the program, if
the remainder is equal to or shorter than one half of an academic
year, the payment period is the remaining portion of the program.

For example, if a program is 1200 clock hours and the academic year
is defined as 900 clock hours, the first payment period for the first
academic year is the period of time needed for the student to
complete the first 450 clock hours. The second payment period
would be the period of time needed for the student to complete the
next 450 clock hours. The first, and only, payment period for the
second academic year is equal to the remaining portion of the
program (see example below).

[[The graphic "Example - Remainder equal to or shorter than half an
academic year" on page 3-46 is currently unavailable for viewing.
Please reference your paper document for additional information.]]

If the remaining portion of the program is more than one half of an
academic year, but less than a full academic year, for the remaining
portion of the program the first payment period is the period of time
in which the student completes the first half of the remaining portion
of the program, as measured in credit or clock hours. The second
payment period is the period of time in which the student completes
the second half of the remaining portion of the program as measured
in credit or clock hours.

For example, if a program is 1700 clock hours and the academic year
is defined as 900 clock hours, the first payment period for the first
academic year is the period of time needed for the student to
complete the first 450 clock hours. The second payment period
would be the period of time needed for the student to complete the
next 450 clock hours. The first payment period for the second
academic year would be the period of time needed for the student to
complete the next 400 clock hours. The second payment period for
the second academic year would be the period of time needed for the
student to complete the final 400 clock hours (see example below).

[[The graphic "Example - Remainder greater than half an academic
year" on page 3-46 is currently unavailable for viewing. Please reference
your paper document for additional information.]]

This is a change from the old Pell Grant payment period definition.
Under the old definition, the first payment period of the second
academic year would be 450 clock hours, and the second payment
period would be 350 clock hours. The new definition results in the
fourth Pell Grant disbursement being made earlier than under the old
definition. Also, under the new definition, the third disbursement of a
Pell Grant will be smaller and the fourth disbursement larger than
under the old Pell Grant payment period definition. The total Pell
Grant award remains the same.

In addition, if a student is enrolled in a program measured in credit
hours without terms and the school does not award credits until the
entire program is complete, the second payment period begins on the
later of

- the calendar midpoint between the first and last scheduled days of
class of the program or academic year, or

- the date, as determined by the school, that the student has
completed half of the academic coursework.

[[Definition of coursework]]
The term academic coursework does not necessarily refer to credits.
It may refer to the lessons or other measures of learning within a
course. For instance, for a course made up of 40 equal lessons, the
student reaches the halfway point in the coursework after completing
20 lessons.

- If the student completes the first 20 lessons before the calendar
midpoint of the academic year, the second payment period does
not begin until the calendar midpoint.

- If the student completes the first 20 lessons after the calendar
midpoint of the academic year, the second payment period does
not begin until the student completes the first 20 lessons.

[[More than two payment periods]]
For a program measured in credit hours without terms and any clock
hour program, a school may choose to have more than two payment
periods per academic year. If so, the length of the payment periods
must be substantially equal throughout the academic year. For
example, if a school chooses to have three payment periods in an
academic year, each payment period must correspond to one-third of
the academic year. Each subsequent payment period cannot begin
until the student completes the clock or credit hours in the previous
payment period.

ACADEMIC YEAR REQUIREMENTS

[[30-week minimum of instructional time]]
Every eligible program, including graduate programs, must have a
defined academic year that contains a minimum of 30 weeks of
instructional time. In addition, for undergraduate programs, over the
minimum of 30 weeks of instructional time, a full-time student must
be expected to complete at least 24 semester or trimester hours, 36
quarter hours, or 900 clock hours as appropriate. A school may
determine the amount of work a full-time graduate or professional
student is expected to complete over an academic year.

[[Determining academic year length]]
A school may have different academic years for different programs,
but must use the same academic year definition (1) for calculating all
SFA awards for students enrolled in a particular program and (2) for
all other SFA Program purposes, such as the certification of loan
deferments. To determine the number of weeks of instructional time,
a school must count the period that begins on the first day of classes
and ends on the last day of classes or examinations.

[[Definition of a week]]
For all programs except those measured in credit hours without
standard terms, a "week of instructional time" is any seven day
period in which at least one day of regularly scheduled instruction,
examination, or preparation for examinations occurs. (Instructional
time does not include periods of orientation, counseling, vacation, or
other activity not related to class preparation or examination.) The
requirements for a "week of instructional time" are similar to those
for a "week of instruction" for the eligible program definitions (see
page 3-13).

For educational programs measured in credit hours without standard
terms (semesters, trimesters, or quarters), a week of instruction must
include at least 12 hours of instruction, examinations, or preparation
for examinations within a consecutive seven-day period.

[[30 calendar-week year assumes class meets 12 hours per week]]
A school wishing to set its academic year to be only 30 calendar
weeks long (for this purpose a calendar week is seven consecutive
days) would have to meet an average of 12 hours per week for the 30
calendar-week period. A school with a program that meets less
frequently than 12 hours a week would have to meet enough
calendar weeks to provide 360 hours of instruction, examinations, or
preparation for examinations (30 calendar weeks x 12 hours per
week) in order to have a program offered over a full academic year
(equivalent to 30 weeks of instructional time).

For example, if a school wants to establish an academic year of 30
weeks of instructional time for a credit-hour, nonterm program that
meets 10 hours a week, the school would need to have approximately
36 calendar weeks (36 calendar weeks x 10 hours per week = 360
hours of instruction, examinations, or preparation for examinations)
in order to have the equivalent of 30 weeks of instructional time for a
full academic year. Therefore, in this example, a student enrolled in
this program would not be eligible to take out another Stafford Loan
until he or she had completed the required amount of work and 36
calendar weeks had elapsed. A school must also use this calculation
to determine when one-third and two-thirds of an academic year
have occurred.

[[Pell calculations]]
When calculating awards under the Pell Grant Program, a school
must always use weeks of instructional time (see Chapter 4).
However, the length of the academic year in calendar weeks will
probably exceed the number of weeks of instructional time.

[[Holidays]]
Because the 12-hour rule does not require a school to offer
instruction, examinations, or preparation for examinations on
specific days, a school may not include a holiday as a day of
instruction unless regularly scheduled instruction, examinations, or
preparation for examinations occurs on that day.

For more information on the effects of the 12-hour rule on a
particular SFA Program, see the relevant program chapter in this
Handbook.

[[Reductions in academic year length]]
The law permits schools that provide two-year or four-year associate
or baccalaureate degree programs to apply to the Department if they
want to establish a full academic year of less than 30 weeks of
instructional time. The Department is permitted to grant a reduction
in the length of an academic year to no less than 26 weeks of
instructional time. If a reduction is approved, a school is permitted to
have an academic year of less than 30 weeks of instructional time
(but no less than 26 weeks of instructional time) without any
reduction in the amount of SFA funds that a student enrolled in an
eligible program is eligible to receive for an entire academic year.

[[Long-term reductions]]
A long-term reduction is available to schools that want to begin or
continue to operate with a reduced academic year on a long-term
basis. This reduction must be renewed each time a school is required
to apply for recertification.

When evaluating a school's application for a reduction, the
Department will consider factors such as

- the school's compliance with awarding and disbursement
procedures based on the academic year requirements of the Higher
Education Amendments of 1992,

- the approval of the academic year by the school's accrediting
agency or state agency,

- the hours of attendance and other coursework that a full-time
student is required to complete in the academic year, and

- any unique circumstances the justify granting the request.

For further details on the information required for submission of a
request for a reduction, see 34 CFR 668.3.

If a school is ineligible for a reduction in the length of an academic
year because of noncompliance with awarding and disbursement
procedures, that school may be eligible if the school makes
arrangements with the Department to recalculate awards as necessary
and repay any resulting liabilities.

CONTRACTS WITH THIRD-PARTY SERVICERS

Section 668.25 of the General Provisions regulations published April
29, 1994, added requirements for all participating institutions that
contract with third-party servicers. These requirements were
effective July 1, 1994. As defined by regulation, a third-party
servicer is an individual or organization that enters into a contract
(written or otherwise) with a school to administer any aspect of the
institution's SFA participation.

[[Activities included in "servicer" definition]]
Examples of functions that are covered by this definition include

- processing student financial aid applications, performing need
analysis, and determining student eligibility or related activities;

- certifying loan applications, servicing loans, or collecting loans;

- processing output documents for payment to students, and
receiving, disbursing, or delivering SFA funds;

- conducting required student consumer information services;

- preparing and certifying requests for advance or reimbursement
funding, preparing and submitting notices and applications
required of eligible and participating schools, or preparing the
Fiscal Operations Report and Application to Participate (FISAP);
and

- processing enrollment verification for deferment forms or Student
Status Confirmation Reports.

[[Excluded activities]]
Examples of functions that are not covered by this definition include

- performing lock-box processing of loan payments,

- performing normal electronic fund transfers (EFTs),

- publishing ability-to-benefit tests,

- performing functions as a Multiple Data Entry Processor (MDE),

- financial and compliance auditing,

- mailing documents prepared by the institution, or warehousing
institutional records, and

- providing computer services or software.

[[Definition of "employee"]]
An employee of a school is NOT a third-party servicer. For this
purpose, an EMPLOYEE is one who

- works on a full-time, part-time, or temporary basis,

- performs all duties on site at the school under the supervision of
the school,

- is paid directly by the school,

- is not employed by or associated with a third-party servicer, and

- is not a third-party servicer for any other school.

[[Eligible servicer; applicable requirements]]
A school may only contract with an eligible third-party servicer, as
defined by specific regulatory criteria. Under such a contract, the
servicer agrees to comply with all applicable requirements, to refer
any suspicion of fraudulent or criminal conduct in relation to SFA
Program administration to the Department's Inspector General, and,
if the servicer disburses funds, to confirm student eligibility and
make required refunds.

If the contract is terminated, or the servicer ceases to perform any
functions prescribed under the contract, the servicer must return all
applicable SFA funds and related records to the school.

[[School is liable]]
Although an eligible servicer must meet all these and other
requirements, the school remains liable for any and all SFA-related
actions taken by the servicer on its behalf, under the terms of the
contract.

[[Must report contacts]]
Schools should already have notified the Department of all existing
third-party servicer contracts. If a school has not notified the
Department, the school must do so by providing the Department with
the following information for each third-party servicer with which
the school contracts: name, address, employer identification number,
telephone number, fax number, and Internet address.

If a school has submitted information regarding its third-party
servicers as part of an application for certification or recertification,
no additional submission is required. A school is not required to
notify the Department if it does not contract with any third-party
servicers.

Schools are also required to notify the Department if the school
enters into a new contract with a third-party servicer; the school
significantly modifies a contract with an existing third-party servicer;
the school or one of its third-party servicers terminates a contract, or
a third-party servicer ceases to provide contracted services, goes out
of business, or files for bankruptcy. Notification to the Department
(which must include the name and address of the servicer and the
nature of the change or action) must be made within ten days of the
date of the change or action.

Schools are not required to provide copies of the actual contracts
with third-party servicers unless the Department specifically requests
the school to submit the contracts.

When submitting information on third-party servicers to the
Department, a school must display its OPEID (the institutional
identifier found on the eligibility or approval letter establishing its
HEA eligibility) on the upper right side of the transmittal.

The information must be provided to the Department at one of the
following addresses (submissions should be marked "Third-Party
Servicer Report"):

By regular mail

U.S. Department of Education
Institutional Participation and Oversight Service
P.O. Box 44805
L'Enfant Plaza Station
Washington, DC 20026-4805

By overnight mail or courier delivery

U.S. Department of Education
Institutional Participation and Oversight Service
7th and D Streets, SW
GSA Building, Room 3522
Washington, DC 20407

By Internet

IPOS@ed.gov

ANTI-DRUG ABUSE REQUIREMENTS

The HEA requires a school to certify to the Department that it
operates a drug abuse prevention program that is accessible to its
students, employees, and officers. Two other laws added related
requirements for postsecondary schools that receive SFA funds.

The Drug-Free Workplace Act of 1988 (Public Law 101-690)
requires a FEDERAL GRANT RECIPIENT to certify that it provides
a drug-free workplace. Because a school applies for and receives its
campus-based allocation directly from the Department, the school is
considered to be a grantee for purposes of the Act. Therefore, to
receive campus-based funds, a school must complete the certification
on ED Form 80-0013, which is part of the FISAP package (the
application for campus-based funds). This certification must be
signed by the school's CEO or other official with authority to sign
the certification on behalf of the entire institution.

[[Requirements for a drug-free workplace]]
The certification lists a number of steps that the school must take to
provide a drug-free workplace, including

- establishing a drug-free awareness program to provide
information to employees,

- distributing a notice to its employees of prohibited unlawful
activities and the school's planned actions against an employee
who violates these prohibitions, and

- notifying the Department and taking appropriate action when it
learns of an employee's conviction under any criminal drug
statute.

A school's Administrative Cost Allowance (ACA) may be used to
help defray related expenses, such as the cost of printing
informational materials given to employees. For more information on
ACAs, see Section 3.

[[Scope of drug-free workplace]]
The drug-free workplace requirements apply to all offices and
departments of a school that receives campus-based funds.
Organizations that contract with the school are considered
subgrantees; however, only grantees are subject to the requirements
of the Drug-Free Workplace Act.

The Drug-Free Schools and Communities Act (P.L. 101-226)
requires a school to certify that it has adopted and implemented a
program to prevent drug and alcohol abuse by its students. Unlike
the annual drug-free workplace certification, a school usually will
only submit this new certification to the Department once. (An
exception would be a school that changes ownership.)

[[Information to be distributed to students]]
The drug prevention program adopted by the school must include
annual distribution to all students and employees of information
concerning drug and alcohol abuse as described above, except that
these steps must be taken by schools that receive ANY FEDERAL
FUNDING and must include the school's STUDENTS as well as its
employees. The information that must be distributed is more
specifically described in Section 8.

[[Developing a drug prevention program]]
A school must review its drug prevention program once every two
years to determine its effectiveness and to ensure that its sanctions
are being enforced. The development of a drug prevention program,
although it is a condition for SFA funds, is usually an enterprise that
is undertaken by the school administration at large, not by the
financial aid office. The regulations originally published on this topic
(August 16, 1990) were mailed to participating schools at the time;
they offer a number of suggestions for developing a drug prevention
program. Also, several organizations that can serve as resources are
listed on the next page.

[[Measuring the effectiveness of the program]]
The effectiveness of a school's drug prevention program may be
measured by tracking

- The number of drug- and alcohol-related disciplinary actions,

- The number of drug- and alcohol-related treatment referrals,

- The number of drug- and alcohol-related incidents recorded by
campus police or other law enforcement officials,

- The number of drug- and alcohol-related incidents of vandalism,

- The number of students or employees attending self-help or other
counseling groups related to alcohol or drug abuse, and

- Student, faculty, and employee attitudes and perceptions about the
drug and alcohol problem on campus.

A school that does not certify that it has a drug prevention program,
or that fails to carry out a drug prevention program, may lose its
approval to participate in the SFA Programs. (See the regulations for
details on Department sanctions and appeals procedures available to
the school.)

Additional Sources of Information

The following resources are available for schools that are
developing drug prevention programs.

- The Center for Substance Abuse Treatment and Referral
Hotline.
Information and referral line that directs callers to treatment
centers in the local community. (1-800-662-HELP)

- The Center for Substance Abuse Prevention Helpline.
A line that provides information only to private entities about
workplace programs and drug testing. Proprietary and private
nonprofit but not public postsecondary schools may use this
line. (1-800-967-5752)

- The National Clearinghouse for Alcohol and Drug Information.
Information and referral line that distributes U.S. Department
of Education publications about drug and alcohol prevention
programs as well as material from other federal agencies.
(1-301-468-2600)

ANTI-LOBBYING CERTIFICATION AND DISCLOSURE

In accordance with P.L. 101-121 (and regulations published
December 20, 1989), any school receiving more than $100,000 for
campus-based Programs must provide the following to the
Department for each award year:

[[Forms required for schools with campus-based allocations
over $100,000]]
- CERTIFICATION FORM (Combined with Debarment and Drug-
Free Workplace certifications, ED-80-0013) The school will not
use federal funds to pay a person for lobbying activities in
connection with federal grants or cooperative agreements. This
certification must be renewed each year for your school to be able
to draw down campus-based funds.

- DISCLOSURE FORM (Standard Form LLL) If the school has
used NONFEDERAL funds to pay a noninstitutional employee for
lobbying activities, the school must disclose these lobbying
activities to the Department. The school must update this
disclosure at least quarterly, when changes occur.

Both of these forms are sent to schools with the campus-based fiscal
report/application (FISAP) each summer. The certification form and
the disclosure form must be signed by the CEO or other individual
who has the authority to sign on behalf of the entire institution. A
school is advised to retain a copy in its files.

This certification primarily covers the use of the campus-based
Administrative Cost Allowance (ACA). Schools may not use the
ACA to pay for their membership in professional associations (such
as NASFAA, NATTS, AICS, or NACUBO), regardless of whether
the association engages in lobbying activities. Association
membership is not a legitimate administrative cost of the SFA
Programs.

[[ACA may not be used for member ship fees]]
The school is also responsible for payments made ON ITS BEHALF,
and must include the certification in award documents for any
subgrantees or contractors (such as need analysis servicers, financial
aid consultants, or other third parties paid from the ACA). See
Section 3 for more information on the ACA.

Last Modified: 07/22/1998