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Ask a Fed: Verification, GE, ATB and more

May 23, 2016

Federal Training Officer David Bartnicki recently provided these updates:bartnicki


Please note that ED posted a REVISED 16/17 Tax Return Transcript matrix on May 4, 2016. We updated a few line items under the taxes paid line items for tax return transcripts. Schools are expected to use the new matrix effective May 4, 2016.


On May 2, 2016, ED posted a new series of Q&A’s related to the recent changes in the Perkins program. The Q&A’s can be found on the campus-based website, which can be reached via a campus-based link on the right-hand side of IFAP – Below are a couple of key Q&A’s:

ASN-Q1: Will the Department return to the institution any share of collections on a Perkins Loan that was assigned to the Department by the institution?

ASN-A1: No. Consistent with longstanding policy, institutions relinquish all their rights and share in any Perkins Loan that is assigned to the Department. Therefore, none of the funds collected by the Department on an accepted assignment will be returned to the institution that assigned the loan to the Department.

OTH-Q1: In Dear Colleague Letter GEN-15-21, the Department published a new Perkins Loan Master Promissory Note that has an expiration date of September 30, 2018. The Perkins Loan Extension Act of 2015 extends the Perkins Loan program through September 30, 2017, and requires additional disclosures. Will the Department be issuing a revised Master Promissory Note that includes the required new disclosures?

OTH-A1: No. The disclosures do not affect the terms and conditions of a Perkins Loan, so the Department is not revising the Master Promissory Note to include the required new disclosure statements. It is the institution’s responsibility to provide the disclosures prior to the first disbursement of each Perkins Loan.

OTH-Q2: The Perkins Loan Extension Act of 2015 required additional disclosures to each Perkins Loan borrower before it makes a first disbursement of a Perkins Loan. Is the Department planning to release a template or suggested verbiage for these new disclosures?

OTH-A2: No. The Department has no plans to provide a template or to develop model language for the new required disclosures.

OTH-Q3: Are institutions required to provide the new disclosure statements required by the Perkins Loan Extension Act of 2015 prior to every disbursement?

OTH-A3: No. Institutions are not required to provide the new disclosure statements prior to every disbursement. Institutions must provide all of the disclosures required in the regulations at 34 CFR 674.16 and all of the new disclosures required by the Perkins Loan Extension Act of 2015 before the institution makes the first disbursement of each Perkins Loan. For example, an institution that provides the disclosure statements to the student at the beginning of the award year, prior to the first disbursement of the Perkins Loan, would not be required to provide the disclosure statements upon each subsequent disbursement of that Perkins Loan.

For more Q&A’s please see the campus-based website.

Gainful Employment (GE)

On May 6 and May 10, 2016, ED posted electronic announcements indicating that schools would NOT use the new Data Challenge and Appeals System (DCAS) to review and correct their GE completers list for this cycle. Instead, schools will be reviewing and correcting their completer lists through NSLDS. In order to be able to review and correct their completer list, staff members need to have NSLDS access along with enrollment update capability. If employees need to update their NSLDS access, the school’s DPA should update their employee account access through SAIG.

In addition, we will be hosting two different GE webinars on the completer list process. On June 2 and June 7, we will host a webinar entitled – Reading Your Draft GE Completers List Files. On June 14 and 16 we will host a webinar entitled – Submitting GE Completers List Corrections. For webinar registration information, please see ANN-16-09 –

New Cash Management Regulations

On May 12, 2016, ED published an electronic announcement, which contained a series of Q&A’s around the new cash management regulations. ED hopes to establish a cash-management website link directly on IFAP in the coming weeks. Below are a few key Q&A’s:

TA Q7: The athletics department has an agreement with a bank to offer bank accounts that can be linked to the student ID card, but the arrangement has nothing to do with Title IV credit balance disbursements. Does this still count as a T2 arrangement?

TA A7: Yes. Any account that can be linked to a student ID will be considered, at minimum, to be an account under a T2 arrangement.

SCM Q1: The regulations state that institutions must ensure that “initiating” direct payments by electronic funds transfer (EFT) to an existing account is as timely as it is to send money to an account under a T1 or T2 arrangement. What does this mean?

SCM A1: This means that institutions and financial institutions with T1 and T2 arrangements cannot create any unnecessary delay by processing a student’s existing banking and payment information more slowly than accounts made available under T1 and T2 arrangements. For example, some financial institutions would require students to fill out paper applications to initiate EFTs to their own bank accounts. Students would then have had to fax in that form to receive money in their own bank account. At the same time, financial institutions would make it clear in the selection menu that students could sign up for accounts online and receive their payments much more quickly. There was no technological reason for this delay, and it simply existed as a manufactured delay designed to push students toward the accounts. This practice and others like it are now prohibited under the new regulations.

However, we understand that, while institutions may initiate electronic payments at the same time, the time that elapses before a student receives the funds may vary based on the method of electronic transfer used and the speed with which the receiving financial institution processes payments. To account for differences over which the institution and initiating financial institution have no control, we also have stated that there can be no difference in the time between initiating a payment to a student’s bank account and initiating a payment to an account opened under a T1 or T2 arrangement.

BAS Q1: Are the books and supplies provisions in the regulations tied to T1 and T2 arrangements, or must all institutions comply with these provisions?

BAS A1: All institutions must comply with the books and supplies provisions.

BAS Q2: The regulations state that an institution may include the costs of books and supplies as part of tuition and fees if the institution has an arrangement that enables it to make those books or supplies available to students below competitive market rates. What does the phrase “below competitive market rates” mean?

BAS A2: The phrase “below competitive market rates” means that the price charged to students is below the price generally available to the public. It does not refer to the list or “sticker” price of the book. Institutions are expected to demonstrate that they have researched available prices of books and supplies before including the cost in tuition and fees.

BAS Q3: Do institutions that arrange for bulk rental or purchase of textbooks for all students in a program and include the cost of those materials in tuition and fees in order to provide savings for their students have to provide a mechanism for students to opt out of such an arrangement?

BAS A3: Institutions must have a process that allows students to opt out of an arrangement to include the cost of books and supplies in tuition and fees and notify students of the option to opt out of the arrangement, unless the books or supplies are not available elsewhere or there is a compelling health or safety reason to use certain books and supplies. For any student who opts out, the institution must reduce the tuition by the cost of any books and supplies included in tuition and fees. The reduction for students who opt out must reflect the institution’s per-student cost of the books.

For more Q&A’s please see the May 12, 2016 electronic announcement –

2016-2017 FSA Handbook

For those who were patiently waiting I am happy to report that the 2016-2017 FSA Handbook AVG section has been posted to IFAP. Other volumes are going through our final review process and should be posted soon.

Direct Loan 2016-2017 Interest Rates

On May 13, 2016, ED posted the new 2016-2017 Direct Loan interest rates for loans first disbursed on or after July 1, 2016 but before July 1, 2017. The new rates are:

  •  Undergraduate students (sub and unsub) – 3.76%
  •  Graduate students (unsub) – 5.31%
  •  PLUS loans (parent and grad/professional) – 6.31%

Ability-to-Benefit Students and Career Pathway Programs

GEN-16-09 was published on May 9, 2016 detailing the recent changes made by Congress regarding ATB students and career pathway programs. Effective December 18, 2015, two main changes occurred:

  • A revised definition of an eligible career pathway program (same as WIOA definition);
  • The elimination of the career pathway alternative Pell Grant disbursement schedules.

What is important to remember now is that as of 12/18/15 career pathway programs have 2 components: a Title IV postsecondary program and a component that enables an individual to attain a high school diploma or its recognized equivalent. The component of the eligible career pathway program that enables an individual to attain a high school diploma or its recognized equivalent may not be paid for using Title IV aid and should not be incorporated into a student’s Title IV enrollment status or Title IV cost of attendance.

With the elimination of the career pathway alternative Pell Grants, all otherwise-eligible students may now receive a Pell Grant under the Regular Federal Pell Grant Payment and Disbursement Schedules published in GEN-15-02 for any payment period in the current 2015–2016 award year and under GEN-16-01 for the 2016–2017 award year.

In addition, a student who was enrolled in an eligible career pathway program prior to December 18, 2015, as such a program was previously defined under the Consolidated and Further Continuing Appropriations Act of 2015 (Pub. L. 113-235), continues to be Title IV eligible under the guidance provided in GEN-15-09 for the remainder of the 2015–2016 award year. For all other students who were first enrolled in an eligible career pathway program on or after December 18, 2015, to be Title IV eligible, the eligible career pathway program must meet the revised definition provided in Pub. L. 114-113, as outlined in GEN-16-09.

Teacher Certification Programs

GEN-16-10 was published on May 11, 2016 outlining some clarifications ED recently provided regarding teacher certification programs. Please note that a teacher certification program for Title IV purposes is a program where the student will receive a certificate from a State that is required for employment as an elementary or secondary school teacher in that State, even though the institution where the students take the coursework does not award a degree or other educational credential upon the completion of that coursework. If the postsecondary institution also offers an institutional credential, then the program is not considered a teacher certification program for TIV purposes and the student is paid Title IV aid under the normal rules surrounding any regular degree or certificate program offered by the school.

A student may receive Title IV for teacher certificate programs in the following areas:

  • For a student to receive an initial teaching credential or certificate;
  • For periodic renewal of a teaching credential or certificate that is required by the State where the student currently has a credential or certificate;
  • For a student who has a teaching credential or certificate in one State to receive a credential or certificate in another State; or
  • For a student to receive an additional teaching certificate or credential that is required by a State for the student to teach in a different subject area. For example, a student who is currently certified to teach grades 1 through 5 may receive aid for a teacher certification program that includes courses needed to receive a certification that is required to teach special education. Similarly, a student who is currently certified to teach math may receive aid for a teacher certification program leading to a separate State certification that is required to teach science.

For Title IV aid specific program requirements and additional certification limitations, please see GEN-16-10 –

Credit Checks, PULS loans and Early FAFSAs

Policy recently provided some information to schools that had some questions around the possibility of having multiple credit checks run for parent PLUS loans due to some of the potential processing changes a school might implement with early FAFSAs. Policy provided the following information:

Question: Will the implementation of the 2017-2018 Early FASFA cause multiple credit checks to be conducted for Direct PLUS Loan applicants?

Answer: The Early FAFSA implementation will not, by itself, cause multiple credit checks. However, actions taken by a school or PLUS Loan applicant may result in multiple credit checks, depending on the timing of those actions.

A Direct PLUS Loan credit check is valid for 180 days. This means that an applicant for whom a credit check was conducted will undergo another credit check if an action that triggers a credit check occurs more than 180 days after the date of the prior credit check.

A credit check is triggered if (1) a school submits a PLUS Loan award record to COD; (2) an applicant completes a Direct PLUS Loan Request on; or (3) a school requests a credit check through COD.

An institution may want to modify its procedures to prevent multiple credit checks in connection with the Early FAFSA implementation.

For example: A school instructs its Direct PLUS Loan applicants to complete the Direct PLUS Loan Request as soon as the FAFSA is complete. A FAFSA is submitted in October 2017, and the applicant completes a Direct PLUS Loan Request at that time. This triggers a credit check. The school submits a Direct PLUS Loan award record in May 2018. This triggers a second credit check, because more than 180 days have elapsed since the prior credit check.

The school could eliminate the second credit check by changing its procedures to ensure that completion of the Direct PLUS Loan Request and submission of the PLUS award record occur no more than 180 days apart.

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