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Key Fiscal Procedures in Title IV Campus-Based Programs

PublicationDate: 7/1/95
ChapterNumber: 3
ChapterTitle: Key Fiscal Procedures in Title IV Campus-Based Programs
SectionNumber: 2
SectionTitle: Federal and Nonfederal Shares of Funding
PageNumbers: 71-75

The total amount that a school may spend on any campus-based
program is a dollar figure composed of both federal and nonfederal
funds. For each program, there are rules for determining what share
of the total amount may come from federal funds and what share of
the total amount must come from nonfederal funds. (The nonfederal
share was formerly referred to as a matching requirement.)

3.2.1 Federal Supplemental Educational Opportunity Grant
(FSEOG) Program

((Federal share))
The federal share of FSEOG awards made to students may not
exceed 75 percent of the total FSEOG awards made by the school.
((Nonfederal share))
The school must contribute a nonfederal share of 25 percent. There
are three methods by which an institution may meet the 25 percent
nonfederal share requirement for FSEOG:

- Individual FSEOG recipient basis--The school may provide its
share to each individual FSEOG recipient together with the federal
share such that each student's total FSEOG award consists of 25
percent nonfederal dollars and 75 percent federal dollars. A
school using this method calculates and documents on a student-
by-student basis what portion of the student's FSEOG award
comes from federal funds and what portion comes from
nonfederal funds.

- Aggregate basis--The school may ensure that the sum of all funds
awarded to all FSEOG recipients in a given award year consists of
75 percent federal dollars and 25 percent nonfederal dollars. A
school using this method calculates and documents on an
aggregate basis what portion of total federal AND nonfederal
dollars awarded to all FSEOG recipients comes from federal
funds and what portion comes from nonfederal funds.

For example, if a school awards a total of $60,000 to all FSEOG
recipients in 1995-96, it must ensure that $45,000 comes from
federal funds and $15,000 comes from nonfederal funds. The
school may meet this requirement by awarding nonfederal funds to
FSEOG recipients on a student-specific basis. For example, if the
school makes a total of $60,000 in FSEOG awards to a total of
100 students, the entire nonfederal share may be met by awarding
a total of $15,000 in nonfederal monies to only five FSEOG
recipients. However, each FSEOG recipient must receive some
FSEOG federal funds.

- Fund-specific basis--The school may establish an FSEOG fund
into which it deposits federal program funds and the required 25
percent nonfederal share. Awards to FSEOG recipients are then
made from this "mixed" fund. A school using this method first
creates a pool of funds containing 75 percent federal dollars and
25 percent nonfederal dollars, then makes FSEOG awards to
students from this pooled fund.

((Sources of nonfederal share))
The nonfederal share of FSEOG funds may come from the school or
a source other than the school itself. Allowable nonfederal sources
include institutional grants and scholarships, tuition or fee waivers,
state scholarships, or foundation or other charitable organization

3.2.2 Federal Work-Study (FWS) Program

((Federal share))
The federal share of FWS wages paid to students employed other
than by a private for-profit organization may not exceed 75 percent.
(The 75 percent applies to expenditures for FWS wages, not
administrative cost allowance.)
((Nonfederal share))
Schools must provide at least 25 percent of their total FWS wages
from nonfederal sources. For example, if a school wanted to spend
$45,000 of its FWS federal funds for student wages, it would be
required to provide at least $15,000 in nonfederal funds. A total of
$60,000 would then be available to pay student wages under the
FWS Program.

((Exceeding minimum nonfederal share))
Schools are allowed to provide more than the required minimum 25
percent nonfederal share. For example, if a school received $60,000
in federal funds and wished to spend a total of $100,000 for student
FWS wages, it would be allowed to spend $40,000 of nonfederal
funds to do so. In this example, the federal share of total earned
compensation under the FWS program expenditures would be 60
percent, while the nonfederal share would be 40 percent.

((Private-sector jobs))
For off-campus FWS jobs with private, for-profit organizations, the
federal share of wages paid to students is limited to 50 percent. The
school and/or employer must provide a nonfederal share of at least
50 percent. The school and employer may contribute a nonfederal
share that exceeds the required 50 percent. However, that amount
may not exceed 25 percent of the sum of a school's current year
initial (final) and supplemental allocations.

((Sources of nonfederal share))
Nonfederal FWS funds may come from any resource available to a

- The school can pay the nonfederal share from its own funds or
other nonfederal sources, outside funds from an off-campus
employer, or a combination of these types of funds.

- Schools can also pay the nonfederal share in the form of noncash
contributions of services and equipment, such as tuition and fees,
room and board, books, and supplies.

((Community service employment))
As a result of campus-based program regulations issued in
November 1994, a school participating in the FWS Program is
required to spend at least 5 percent of its initial (final) and
supplemental allocations annually to compensate students employed
in community service activities. However, a school may request a
waiver of this requirement in writing. ED will approve a waiver only
if ED decides that a school has proved that enforcing the requirement
would cause a hardship for its students.

((Work-College Program))
The Higher Education Amendments of 1992 authorized the Work-
College Program. Schools that satisfy the stringent definition of
"work colleges" may apply to ED to participate in the program.
Federal funding is available for the 1995-96 award year; schools can
also transfer FWS and Perkins Loan funds to the Work-College

A "work college" means an eligible public or private nonprofit
school with a commitment to community service. The school must
meet the following criteria:

- have operated a comprehensive work-learning program for at least
two years,

- require all students who reside on campus to participate in a
comprehensive work-learning program,

- have a program that serves as an integral part of the school's
educational program and is part of the school's educational
philosophy, and

- provide students in the comprehensive work-learning program
with an opportunity to contribute to their education and to the
welfare of the community.

((JLD Program))
The Job Location and Development (JLD) Program enables schools
to expand off-campus job opportunities for students. Off-campus
employers, rather than schools, pay students whose jobs are located
or developed through the JLD Program. Because no federal funds
are used to pay wages, students are not required to meet standard
FWS eligibility criteria.

A school may use up to 10 percent or $50,000 (whichever is less) of
its FWS allocation to establish or expand a program to locate and
develop off-campus jobs, including community-service jobs. Jobs
located or developed under the program may be for either profit or
nonprofit employers.

The federal funds that a school sets aside from its FWS allocation for
JLD expenses may be used to pay up to 80 percent of allowable
costs. The school must provide the remaining 20 percent of
allowable costs, either in cash or in services.

More information about JLD can be found in Chapter 7, Section 6, of
The 1995-96 Federal Student Financial Aid Handbook.

3.2.3 Federal Perkins Loan Program

((FCC and ICC))
The amount of new Federal Perkins Loan Program funds provided to
an institution for an award year by the federal government is called
the federal capital contribution (FCC). Schools must provide an
additional share from their own funds called the institutional capital
contribution (ICC). The ICC must equal or exceed one-third (33 1/3
percent) of the FCC or one-quarter (25 percent) of the combined
FCC and ICC. For example, if a school received an FCC of $3,000,
it would be required to provide an ICC of at least $1,000, for a
combined amount of $4,000.
((Expanded Lending Option))
Schools participating in the Expanded Lending Option (ELO) are
required to provide an ICC that matches the FCC dollar for dollar,
which is a 50 percent nonfederal share and a 100 percent match.

((Level of Expenditure))
The total amount of Federal Perkins Loan funds allocated to an
institution for a given award year is equal to the total of the FCC plus
the ICC. Note that this allocation differs from the institution's
approved Level of Expenditure (LOE). The allocation represents
"new" money added to a school's established Federal Perkins Loan
fund and is used to make loans to students and to pay administrative
and collection costs. The LOE is the maximum dollar amount that
ED allows a school to expend from its loan fund in a given award
year. This includes all authorized expenditures for the program, such
as all loans to students, ACA, and collection costs. The LOE equals
the total of ICC, FCC, funds available from the school's collection of
Federal Perkins Loans in repayment, and anticipated cash on hand.
To increase the LOE, schools go through the appropriate ED
Regional Administrator.

Last Modified: 06/30/1995