| PublicationDate: 7/1/95 ChapterNumber: 2 ChapterTitle: General Institutional Responsibilities SectionNumber: 8 SectionTitle: Record Maintenance and Retention Requirements PageNumbers: 51-68 2.8 Record Maintenance and Retention Requirements Institutions participating in Title IV programs collect and generate a significant volume of program-related and student-related information on a yearly basis. Federal regulations specify which of these records must be maintained and the period of time for which they must be retained. These record maintenance and retention requirements are school-wide and include fiscal, financial aid, and general institutional records. ((Importance of maintaining records)) The importance of maintaining complete and consistent records cannot be overemphasized. These records are used to document a school's administrative capability and financial responsibility and are crucial in maintaining eligibility to participate in Title IV programs. As such, schools must make student, financial aid, program, and general records available to auditors and representatives of ED at their request. Records that are poorly maintained or that are not readily available for review can lead to findings, exceptions, and liabilities in the course of an audit or program review. This section describes the recordkeeping requirements contained in the Student Assistance General Provisions and in the specific regulations for each Title IV program. A discussion of the Family Education Rights and Privacy Act (FERPA) is also included. FERPA is an important law that protects the privacy of students and families by controlling disclosure of student records to parties outside the institution and by allowing students access to their own school records. 2.8.1 General Student Records In accordance with Section 668.23 of the Student Assistance General Provisions, schools must establish, maintain, and keep current certain records pertaining to Title IV recipients. For each student receiving Title IV funds, a school must keep records of: ((Required records)) - the student's admission to and enrollment status at the institution, - the program of study and the courses in which the student has enrolled, - the student's academic progress, - all financial aid the student receives at the institution, - the student's prior receipt of financial aid at other institutions, - all refunds due or paid to the student, Title IV programs, or FFEL Program lenders, - the student's job placement, (if the school provides a placement service and the student uses that service) and - verification of information reported on the student's financial aid application. ((Admission records)) For ALL students, not just Title IV recipients, the school must keep records regarding its admission requirements and the educational qualifications of each student admitted to or enrolled in each eligible program. Schools must also keep records relating to student consumer- information requirements and to requirements under the Student Right-To-Know and Campus Security Act. (See section 2.4.) 2.8.2 General Institutional Records ((Examples of institutional records)) Schools must maintain all records that relate generally to the institution's eligibility to participate in Title IV programs, as discussed in Sections 668.14, 668.15, and 668.16 of the Student Assistance General Provisions. Examples include: - the institution's Program Participation Agreement, - accrediting and licensing agency reviews, approvals, and reports, - state agency reports, - audit and program review reports, and - self-evaluation reports. 2.8.3 General Fiscal Records A school must keep consistent and accurate records of its use of Title IV funds. Program and fiscal records must show a clear (easily followed) audit trail for expenditures of federal funds. Similarly, these records must clearly show that funds were obtained, managed, disbursed, and returned in accordance with federal regulations. Fiscal records that must be maintained include: ((Examples of fiscal records)) - records of all Title IV program transactions, - bank statements for accounts containing Title IV funds, - student accounts, including (for each enrollment period) institutional charges, cash payments, Title IV payments, cash disbursements, refunds, and repayments, - general ledger (control accounts) and related subsidiary ledgers that identify each program transaction and separate those transactions from the institution's other financial transactions, and - Federal Work-Study (FWS) payroll records (see section 2.5.6). - Specific fiscal recordkeeping requirements for each Title IV program are discussed in that program's regulations. 2.8.4 Financial Aid Application and Award Records Schools are required to keep extensive records involving student applications for financial aid and financial aid awards. Required records include: ((Examples of financial aid records)) - student applications for financial aid and need analysis documents for all eligible aid applicants who attended the school, WHETHER OR NOT THEY RECEIVED ANY FINANCIAL AID, - documents establishing a student's financial need and eligibility for Title IV aid, - financial aid awards made to and accepted or declined by students, - cost of attendance information for individual students, - verification documents, including student (and spouse, if applicable) and parent federal tax returns, - records of FFEL Program loans and Federal Direct Loans, - documentation of required entrance and exit loan counseling for students borrowing under the FFEL, Federal Direct Loan, and Federal Perkins Loan Programs, - data used to establish a student's full-time or part-time enrollment status and period(s) of enrollment, - records of refunds due or paid to students, Title IV program accounts, or FFEL Program lenders, and - required certification statements (such as Statement of Educational Purpose, Statement of Refunds and Default, and Statement of Registration Status) and any documents used to support or verify those certifications. 2.8.5 Reporting Records ((Examples of reporting records)) Schools must maintain reports or copies of reports submitted or received in connection with administering Title IV programs, including-- - Fiscal Operations Report and Application to Participate (FISAP), - Federal Pell Grant Program Institutional Payment Summaries (IPSs) and Statements of Account (SOAs), - Department of Education Payment Management System (ED/PMS) cash requests, - ED/PMS 272 Reports (quarterly or monthly reports), - Student Status Confirmation Reports (SSCRs) for the FFEL and Federal Direct Loan Programs, - reconciliation reports for Title IV programs, - federal, state, and independent audit reports and school responses, - state grant and scholarship award rosters and reports, and - accrediting and licensing agency reports. In addition, schools must maintain records that support the data that appear on all required reports. 2.8.6 Program-Specific Records Schools must also keep records that relate specifically to each Title IV program. ((Federal Pell Grant Program)) For the Federal Pell Grant Program, under Section 690.82 of federal regulations, schools must maintain: - the Student Aid Report (SAR) or Institutional Student Information Record (ISIR) of each student applying for a Federal Pell Grant, - records of the eligibility of each enrolled student for whom the school has a valid SAR or ISIR, - the name and Social Security Number of and the amount paid to each student, - the amount and date of each payment, - the amount and date of any overpayment that is restored to the program account, - each student's cost of attendance, - how each student's full-time or part-time enrollment status was determined, and - each student's enrollment period. ((Federal Direct Loan Program)) For the Federal Direct Loan Program, under Section 685.309 of federal regulations, schools must maintain a copy of the application data submitted to ED and, on request, produce a record of: - the amount of the loan and the loan period, - the data in an individual student budget or the school's itemized standard budget that were used in calculating the student's estimated cost of attendance, - the sources and amounts of financial aid available to the student that the school used to determine the student's estimated financial aid for the loan period, - the amount of the student's tuition and fees paid for the loan period and the date the student paid the tuition and fees, - the amount and basis of the calculation of any refund paid to or on behalf of a student, - for a subsidized Direct Stafford/Ford Loan, the data used to determine the student's Expected Family Contribution, - for a subsidized or unsubsidized Direct Stafford/Ford Loan, the date of each disbursement of the loan, - the date of each disbursement of the loan and the amount of the disbursement, - the student's job placement, if known, - borrower information collected at the exit interview and documentation that confirms that the student received entrance and exit loan counseling, and - all records involved in any loan, claim, or expenditure questioned by a federal audit until the resolution of any audit questions. In addition, schools must maintain any other records that document their compliance with any applicable loan-related requirements. ((Federal Family Education Loan Program)) For the Federal Family Education Loan (FFEL) Program, under Section 682.610 of federal regulations, schools must maintain: - a copy of the loan application or data electronically submitted to the lender, - the name and address of the lender, - the amount of the loan and the loan period, - the data used to construct an individual student's budget or the school's itemized standard budget used to calculate students' estimated costs of attendance, - the sources and amounts of financial aid available to the student that the school used to determine the student's estimated financial aid for the loan period, - the amount of the student's tuition and fees paid for the loan period and the date the student paid the tuition and fees, - the amount and basis of the calculation of any refund paid to or on behalf of a student, - for a subsidized Federal Stafford Loan for which the borrower receives an interest subsidy, the data used to determine the student's Expected Family Contribution and the corresponding certification by the school to the lender, - the date of each disbursement of the loan and the amount of that disbursement, - the date the school endorsed each loan check, - the date(s) loan proceeds were delivered by the school to the student, - for loans delivered by electronic funds transfer (EFT), a copy of the student's written authorization to transfer initial and subsequent disbursements of each FFEL Program loan, - the student's job placement (if known) and - documentation that the student received entrance and exit loan counseling. In addition, schools must maintain any other records that document their compliance with any applicable loan-related requirements. ((Federal Perkins Loan Program)) For the Federal Perkins Loan Program, under Section 674.19 of federal regulations, schools must maintain: - program and fiscal records that - are reconciled at least monthly, - identify each student's account and status, - show the eligibility of each student assisted under the program, and - show how each student's need was met, - original promissory notes and repayment schedules in a locked, fireproof container until the loans are satisfied or until they are assigned to the federal government for collection, - all loan applications for those students reported on the FISAP, - all records supporting the school's application for funds under the Federal Perkins Loan Program, - a repayment history for each borrower that shows the date and amount of each repayment over the life of the loan and that indicates the amount of each repayment credited to principal, interest, collection costs, and penalty or late charges, - documentation of the date, nature, and result of each contact with the borrower or endorser in collection of an overdue loan, including copies of all correspondence to or from the borrower and endorser, (except bills, routine overdue notices, and routine form letters), - payment records, (including cancellation and deferment requests), - collection agency reports, and - litigation records. ((Federal Work-Study Program)) For the Federal Work-Study Program, under Section 675.19 of federal regulations, schools must maintain: - program records that - are reconciled at least monthly, - identify each student's account and status, - show the eligibility of each student assisted under the program, and - show how each student's need was met, - all employment applications for those students reported on the FISAP, - all records supporting the school's application for Federal Work- Study funds, - a certification that each student has worked and earned the amount paid, signed by the student's supervisor, an official of the institution, or off-campus employer, - for students paid on an hourly basis, a time sheet showing the hours each student worked in clock-time sequence or the total hours worked each day, - a payroll voucher containing sufficient information to support all payroll disbursements, and - a noncash-contribution record to document any payment of the institution's share of the student's earnings in the form of services and equipment. ((FSEOG Program)) For the Federal Supplemental Educational Opportunity Grant (FSEOG) Program, under Section 676.19 of federal regulations, schools must maintain: - program records that - are reconciled at least monthly, - identify each student's account and status, - show the eligibility of each student assisted under the program, and - show how each student's need was met, - all FSEOG applications for those students reported on the FISAP, - all records supporting the school's application for FSEOG funds, and - a noncash-contribution record to document payment of the institution's share of grants to students. 2.8.7 Record Retention Requirements Student records must be kept for FIVE YEARS FROM THE FOLLOWING DATES: Federal Pell Grant Program-- the last day of the award year FSEOG and Federal Work-Study Programs-- the date that the school files its FISAP for that award year Federal Perkins Loan Program for award records, the date that the school files its FISAP for that award year for loan records, the date of the loan's assignment, cancellation, or final repayment Federal Family Education Loan Program for loan records, the last day of the loan period for reports, the date the report is completed Federal Direct Loan Program for loan records, the student's last day of attendance for reports, the date the report is completed ((Microfilm and microfiche records)) The school must keep records involved in any claim or expenditure questioned by a federal audit or program review for at least five years and until such questions are fully resolved. ((Audit and program review records)) Required records may be maintained on microfilm, microfiche, or CD-ROM, with the exception of promissory notes under the Federal Perkins Loan Program and the Federal Family Education Loan (FFEL) Program. MICROFILMED OR MICROFICHED COPIES OF PROMISSORY NOTES ARE NOT ACCEPTABLE. ((Direct Loan records)) Because the Federal Direct Loan Program is fully automated, the required records may be maintained on diskette or in the school's computer. The Direct Loan Servicing Center is required to maintain original promissory notes for Direct Loans. 2.8.8 Disclosing Student Information ((FERPA)) The Family Education Rights and Privacy Act of 1974 (FERPA) sets certain conditions on disclosure of personal information from records kept by schools participating in Title IV programs. The law pertains to all students attending these schools, not just Title IV recipients. In addition, federal regulations issued under FERPA (34 CFR 99) apply to all school records, including admissions records, academic records, and financial aid records. ((Law enforcement records)) The 1992 Higher Education Amendments eliminated FERPA restrictions on records of a school's law enforcement unit. As amended, FERPA excludes from the definition of "education records," and from the restrictions and rights of access under FERPA, records that are maintained by a law enforcement unit of an education agency or institution that were created by that unit for the purpose of law enforcement. ((School requirements)) Under FERPA, a school is required to: - develop a written policy listing the types and locations of education records maintained by the school and stating the procedures for students and parents to review the records, - notify students and parents of their rights with respect to education records, and - document the student's file each time personally identifiable information is disclosed to a person other than the student. ((Student rights)) A student has the right to: - inspect and review his or her education records, - request an amendment to the records, and - if the request for an amendment is denied, to request a hearing to challenge the contents of the education records on the grounds that the records are inaccurate, misleading, or violate the student's rights. ((Disclosure to third parties)) FERPA regulations also govern the disclosure of student information to parties other than the student. There are several conditions under which personally identifiable information may be disclosed without the student's prior written consent. Some of these conditions are of interest to the fiscal officer: - Disclosure may be made to authorized representatives of the U.S. Department of Education (ED), ED's Office of Inspector General, or state and local education authorities. These officials may have access to records as part of an audit or program review or to ensure compliance with Title IV program requirements. - Disclosure may be made if it is in connection with financial aid that the student received or applied for. Information may only be released if it is needed to determine the amount of the aid, the conditions for the aid, the student's eligibility for the aid, or to enforce the terms or conditions of the aid. - Disclosure may be made to the student's parent, if the student is a dependent of the parent as defined by the Internal Revenue Service. - Disclosure may be made to organizations that are conducting studies concerning administration of student aid programs on behalf of educational agencies or institutions. ((Recording disclosures)) Schools are required to keep a record of each request for access and each disclosure of personally identifiable student information. The record must identify the parties who requested the information and their legitimate interest in the information. This disclosure record must be maintained as long as the records themselves are maintained. For more information about FERPA requirements, consult Chapter 3, Section 7, of The 1995-96 Federal Student Financial Aid Handbook. 2.8.9 Record Management Procedures ((Filing original records)) It is essential that schools maintain records related to Title IV programs in an organized manner. Good record management procedures assist institutions in carrying out daily functions associated with administering Title IV funds, filing required reports in an accurate and timely manner, and maintaining a clear audit trail. One important aspect of record management is careful and orderly filing of original records. Many schools establish individual, cumulative student aid files, separating documents within each student's file on the basis of award year. ((Clear audit trail)) Although it is important to keep original records used in processing financial aid, schools must also have a recordkeeping system that traces transactions involving those records. A school's recordkeeping procedures should allow for establishing and maintaining a clear (easily followed) audit trail. A clear audit trail is defined as maintaining required documentation that supports each transaction involving receipt or expenditure of federal funds. A school may maintain records in a manual, paper-based system or in a computer database, or it may use a combination of these methods. Many schools that use automated systems to manage records also maintain paper files that contain original documents needed to support the electronic information stored in a database. ((In-house control documents)) The in-house control documents a school uses to manage records can vary on the basis of institutional policies and procedures. Some commonly used control documents include: - a communication log that summarizes all in-person or telephone contacts with a student or about a student's financial aid; - a document control card or checklist that monitors documents received against documents needed to process a student's financial aid; - an award packaging worksheet or data entry form that shows how and when a student's award was packaged and by whom; - a loan status card for each federal student loan program that tracks loan applications, disbursements, entrance and exit loan counseling, refunds, repayments, and collection activities (if applicable); and - a student master record that contains financial aid information for a student for each award year. ((Student master record)) A student master record is used to record basic information relating to a student's application for and receipt of financial aid. The student master record typically contains: - demographic information, such as name, address, date of birth, and citizenship status; - enrollment information, such as admission status, enrollment dates, credits attempted and completed, and grade point average; - need analysis information, such as Expected Family Contribution (EFC), family income, and cost of attendance (COA); - award information, such as amounts and sources of funds awarded and whether awards were accepted or declined; and - student account information, such as tuition and fee charges assessed, cash payments made by a student or parent, financial aid disbursements, and refunds and repayments. ((Automated record-keeping)) Automated recordkeeping systems are often designed so that information contained in the student master record can be imported from or exported to other school offices. For example, student demographic and enrollment information might be updated automatically from registrar records, while award information might be transferred electronically to business office records. Such systems ensure that a school's records are maintained in a consistent and accurate manner and reduce errors that can occur when data is transferred manually. The quality of a school's recordkeeping can also be enhanced by using software systems that allow the school to retrieve and transmit information to and from organizations and agencies outside the institution. For example, financial aid offices using EDExpress receive need analysis information electronically, directly from ED's Central Processing System (CPS). Business offices using MEERS (Monthly Electronic Expenditure Reporting System) report expenditures of federal funds electronically, directly to the Department of Education Payment Management System (ED/PMS). In addition, many state scholarship agencies and guaranty agencies that participate in the Federal Family Education Loan (FFEL) Program have systems that allow schools to send and receive award and disbursement records electronically. These systems can reduce significantly the time involved in processing a student's financial aid and improve the accuracy of information flowing to and from agencies outside the school. [[The chart entitled "The Refund Process" on page 68 is not currently available for viewing. Please reference your paper document for additional information.]] |