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General Institutional Responsibilities

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.]]

Last Modified: 06/30/1995