As part of our commitment to keeping you informed with the latest regulatory developments, members of our Student Financial Aid Specialty Group recently attended the Department of Education’s Federal Student Aid (FSA) conference in Atlanta, GA. Among many topics discussed during the conference, the following are the key matters higher education institutions need to focus on in the near term.
Assessing Next Steps for the Perkins Loan Program Portfolio
As the Perkins Loan program has ended, institutions should be assessing next steps for handling their portfolio of loans. Upon filing the 2019-2020 Fiscal Operations Report and Application to Participate (FISAP), the Department of Education (the Department) will be collecting the federal share of an institution’s portfolio, as reported on the FISAP. Institutions should begin assessing their options:
- Assigning a portion of the portfolio to the Department,
- Assigning the entire portfolio, or
- No assignment at all.
The Department is not requiring all loans to be assigned, but encourages institutions to assess each loan individually and decide to keep or assign the loan. This decision should take into account the costs associated with administering the outstanding loans.
Avoiding Errors When Awarding Pell Grant Funds
The Department reported it often receives questions or finds errors in the administration of the Pell Grant program. One area they highlighted was Year-Round Pell. The Year-Round Pell allows a student to receive 150 percent of his or her scheduled award in an award year, provided the student is eligible. The additional awarded amount under this provision does not increase the total amount of Pell awards the student may be eligible for in total, only accelerates the awarding of the amounts. When calculating the awarded amount for students who are not full-time, the Department recommends using a percentage rather than a dollar amount; this will avoid amounts rounding up and resulting in a potential over awarding of funds. For transfer students, the Department reminded attendees that institutions should be certifying these students themselves and not relying on the previous institution a student attended. Illustrative guidance on awarding Year-Round Pell can be found in Volume 3 Chapter 3 page 62 of the FSA Handbook.
Helpful Changes to Verification Supporting Documentation
The Department addressed two areas of supporting documentation related to tax returns that would satisfy verification requirements and potentially ease the burden on institutions. First, an institution is able to rely on a copy of the filed tax return and no longer is required to get an IRS transcript. Second, in situations where students and families do not file a tax return, receipt of a letter from the parent or guardian attesting to the fact that no return was filed for the requested tax year would satisfy the verification supporting documentation requirement.
For More Information
Our Not-For-Profit Practice has a dedicated specialty group of professionals trained in student financial aid and federal Single Audit related matters. We work with higher education institutions of varying sizes throughout the United States. If you have questions regarding your institution’s Single Audit programs, please contact us here.
Jimmy Hanson is a Senior Associate in our Student Financial Aid Specialty Group. He can be reached at 617.761.0648 or email@example.com
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