| 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 funds. 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 school: - 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 Program. 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. |