Session # 11

General Provisions
Regulations Package

Michelle Belton
Brian Kerrigan
History
• Negotiated Rulemaking
Federal Register Notice - Aug. 18, 2006
Regional hearings
 Berkeley, CA - Sep. 19, 2006
 Chicago, IL - Oct. 5, 2006
 Orlando, FL - Nov. 2, 2006
 Washington, DC - Nov. 9, 2006

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History (continued)
• Four negotiating committees were
established:
General Provisions
Loans
Academic Competitiveness & National
SMART Grants
Accreditation
• Negotiations from December - June

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General Provisions Package
• Consensus reached
• August 8, 2007 NPRM:
reflected the proposed regulatory
language agreed to by committee
22 public comments received by end of
comment period (September 7, 2007)
• Final rules: November 1, 2007
• Effective date:
July 1, 2008
Early implementation

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General Provisions Package
• Definitions
Professional degree
Graduate or professional student
Undergraduate student
Full-time student
Three quarter-time student
Half-time student

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General Definitions

• Professional Degree
Above bachelor’s degree
Generally requires professional
licensure
List of examples, including J.D., D.V.M.,
D.D.S., Pharm. D.

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General Definitions
• Graduate or professional student
Two key points:
 Grad/Prof students cannot receive
undergraduate level aid and graduate
level aid at same time
 Institution can change a student’s
status from “undergraduate” to
“graduate or professional” once a
student has completed at least 3
years at undergraduate level.

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General Definitions
• Undergraduate student
Key Points:
 For Perkins, FFEL, and DL programs,
any student who takes courses at or
below the baccalaureate level is an
undergraduate
 For Pell, ACG, SMART, and FSEOG a
student is only an undergraduate if
she is pursuing her first bachelor’s
degree or below

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General Definitions
• Undergraduate student (cont’d)
 For Pell, a student who has a
bachelor’s and is studying to earn a
state-required teaching certification
could be an undergraduate
 First three years of a dual degree
program students are undergraduates
 First four years of a program lasting
longer than five years that leads to a
bachelor’s degree.

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General Definitions

• Full-time student
Moved calculation from Pell Grant
regulations
Also clarified definition of full-time
student for correspondence programs

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General Definitions

• Half-time student & Three-quarter time

student
Existing definitions in the Pell Grant
program regulations were moved to the
General Provisions regulations

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General Provisions Package

• Other “definitions”
Independent study for direct
assessment programs
Substantially equal in length
Successfully completes
• Treatment of aid when recipient does not
begin classes

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Direct Assessment Programs

• Independent Study
Only applies to Direct Assessment
Programs
Course of study with predefined
objectives determined by student &
professor
Requires regular and substantive
interaction

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Treatment of Aid when recipient does
not begin classes
• Key Points
Consolidated Return to Title IV
requirements in General Provisions.
Must return Title IV funds used to pay a
student’s expenses within 30 days of
discovering a student has failed to
attend class.
Institutions restricted from disbursing
funds to any student who they know
will not be starting classes (i.e., a
student who has been expelled)

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Treatment of Aid when recipient does
not begin classes
• Key Points (continued)
Institutions not required to return funds
that are disbursed directly to a student
in a study abroad program or who is
attending a foreign institution
Institutions must notify lenders to issue
a final demand notice to these students

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General Provisions Package
• Payment period
Credit hour with standard terms or
terms that are substantially equal
Credit hour with terms that are not
substantially equal
Credit hours w/o terms or clock hours
Cohort default rate exemption
Excused absences
Re-entry w/i 180 days
Re-entry after 180 days or transfer

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Payment Period
• For credit hour programs with standard
terms or terms that are substantially
equal, it’s the term
• For credit hour with terms that are not
substantially equal—
Grants and Perkins, it’s the term
FFEL and DL, it’s ½ the credit hours and
½ the weeks
• For credit hours w/o terms or clock hours,
it’s ½ the (credit or clock) hours and ½
the weeks

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Payment Period
• When the cohort default rate exemption
applies, it’s the loan period

• Excused absences count if—

Written policy
# does not exceed the lesser of
 accrediting agency policy,
 State agency policy, or
 10%

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Payment Period
• Re-entry w/i 180 days, stay in the same
payment period

• Re-entry after 180 days or transfer –

calculate new payment periods, or
remain in the same payment period,
 Continuous enrollment,
 Substantially similar coursework,
 Substantially equal payment periods,
 Little or no changes in charges, &
 Credits are accepted in new program

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General Provisions Package
• Minimum period for loan
Credit hour with standard terms or
terms substantially equal, with no term
less than 9 weeks
Clock hours or credit hours w/o
standard terms and w/o terms that are
substantially equal with no term less
than 9 weeks
Transfer students
Completing one program and
immediately starting another

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Minimum Period for a Loan
• For credit hour program with standard
terms or terms substantially equal, with
no term less than 9 weeks, it’s the term

• For clock hours or credit hours w/o

standard terms and w/o terms that are
substantially equal with no less than 9
weeks, it’s the lesser of—
The length of the program (or the
remaining portion of the program), or
The academic year

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Minimum Period for a Loan
• For transfer student, it’s the remaining
portion of the program or academic year
(The student can get the remaining
balance of the annual loan)

• For completing one program and

immediately starting another, it’s the
remainder of the academic year (The
student can get the remaining balance of
the annual loan limit at the loan level of
the new program)

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General Provisions Package
• Academic year progression
Credit hour programs with standard
terms or terms substantially equal, with
no term less than 9 weeks
Credit hour program with non-standard
terms that are not substantially equal
or each term is not at least 9 weeks or
credit hours w/o terms
Clock hour programs

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Academic Year Progression

• For credit hour programs with standard

terms or terms substantially equal, with
no term less than 9 weeks, the student
progresses when the academic year
calendar period elapses

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Academic Year Progression

• For credit hour programs with non-

standard terms that are not substantially
equal or each term is not at least 9 weeks
or credit hours w/o terms, the student
progresses at the later of—
Completion of the weeks, or
Completion of the coursework

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Academic Year Progression

• For clock hour programs, the student

progresses at the later of
Completion of the weeks, or
Completion of the clock hours

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R2T4 Changes
• Confirmation not needed for PWD of grant
funds
• PWD of grant funds asap but no later than
45 days after the institution determines
the student withdrew
• PWD of loan funds asap but no later than
180 days after the institution determines
the student withdrew
• Use of the payment period that ends later
(see next slide)

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R2T4
• For credit hour programs with non-
standard terms that are not substantially
equal in length—if the payment period is
used for calculation and the student gets:
1) grants and/or a Perkins (where the
payment period is the term), and 2) an
FFEL or DL (where the payment period is
½ the hours and ½ the weeks),
Use the payment period that ends later,
and
Attribute funds to the payment period
that ends later
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R2T4 Changes
Academic Year is 24 credit hours & 30 weeks
Terms: 1 = 10 wks, 2 = 6 wks, 3 = 14 wks.
FFEL (DL) PP1 FFEL (DL) PP2
15 weeks 15 weeks

WD at day 50

10 weeks 6 weeks 14 weeks

Grant PP1 Grant PP2 Grant PP3

(Perkins) (Perkins) (Perkins)

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R2T4 Changes
• The WD was at day 50 (which is in both
the FFEL/DL PP1 and the Grant/Perkins
PP1)
• Assume student got an FFEL and a Pell
FFEL/DL PP1 = 15 weeks*
Grant/Perkins PP1 = 10 weeks
• Determine the payment period that ends
later* and use it

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R2T4 Changes
PP 1 = 10/30 X $4,310 = $1,437
PP 2 = 6/30 X $4,310 = $ 862*
PP 3 = 14/30 X $4,310 = $2,011

• Attribute the portion of Pell from the

Pell PP 2 to be included as Aid That
Could Have Been Disbursed (as if Pell
was disbursed for the FFEL PP 1)
(Attribution for 5 wks of Pell from PP 2
is: 5/6 X $862* = $718)

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R2T4 Changes
• Total Title IV Aid disbursed or could
have been disbursed for R2T4
calculation:
FFEL PP 1 = $1,750
Pell PP 1 = $1,437
Portion from Pell PP 2 = $ 718
Total $3,905

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Calculation of a Pell Grant
• Use of Formula 1
Credit hour programs
12 hours for full-time per term
At least 30 weeks
 In 2 semesters or trimesters (fall
through spring) or 3 quarters (fall,
winter, spring) with no overlapping
terms
 Any 2 semesters or trimesters or 3
quarters that have periodic starts
(e.g., monthly), where students are
not in overlapping terms
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Calculation of a Pell Grant
• Credit hour w/o terms and clock hour
programs (Formula 4)
Scheduled Pell x the lesser of—
Hours in the payment period
Hours in the academic year
OR
Weeks in the payment period
Weeks in the academic year

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Calculation of a Pell Grant
• Correspondence programs w/o terms
(Formula 5)
Half-time amt x the lesser of—
Hours in the payment period
Hours in the academic year
OR
Weeks in the payment period
Weeks in the academic year

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Calculation of an ACG/SMART
• Use of Formula 1
Credit hour programs
12 hours for full-time per term
At least 30 weeks
 In 2 semesters or trimesters (fall
through spring) or 3 quarters (fall,
winter, spring) with no overlapping
terms
 Any 2 semesters or trimesters or 3
quarters that have periodic starts
(e.g., monthly), where students are
not in overlapping terms
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Calculation of an ACG/SMART

• Credit hour w/o terms and clock hour

programs (Formula 4)
Scheduled award x the lesser of—
Hours in the payment period
Hours in the academic year
OR
Weeks in the payment period
Weeks in the academic year

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General Provisions Package
• Cash Management
Issuing a check
Electronic disbursements
Minor prior-year charges
Late disbursements
Returning unclaimed funds
Loan cancellation notice and
confirmation of a loan
Excess cash

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Cash Management

• Issuing a check
Issued on date mailed or date student
notified
Student has 21 days to pick up check
After 21 days, school must mail check,
initiate EFT or return the funds

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Cash Management
• Electronic Disbursements
School may have a policy requiring
students to have bank account
If student does not have or want an
account, school must disburse funds in
another way
If school opens an account or actively
assists student, certain conditions apply

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Cash Management
● Electronic Disbursements
Must obtain student’s written consent to
open the account
Inform student of terms and conditions
May not make any claims against the
funds in the account
No cost to student for opening account
or receiving debit or stored-value card

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Cash Management
● Electronic Disbursements
Ensure that student has convenient
access to branch office or ATM, no fees
for cash withdrawals
School may not limit use of the card to
certain vendors
May not market or portray card as a
credit card

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Cash Management
• Minor prior-year charges
Amount increases to not more than
$200
Do not need to get student’s permission
for tuition and fees or room and board
Cannot use current year funds to cover
prior-year charges of more than $200

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Cash Management

• Late disbursements
Late disbursement period extended
from 120 to 180 days
No late disbursements after 180 days

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Cash Management
• Returning unclaimed funds
Uncashed check must be returned no
later than 240 days after check issued
If check or EFT is returned, can make
additional attempts to re-disburse
Attempts must be made no later than
45 days after EFT or check is returned
Title IV funds never escheat to the state

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Cash Management
• Loan notice and confirmation
If school obtains affirmative
confirmation, current loan notice
procedures apply
Without confirmation:
 Must notify student not earlier than
30 but no later than 7 days after
crediting account
 Must give student 30 days to cancel
loan or loan disbursement

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Cash Management
• Loan notice and confirmation
Affirmative confirmation is a process
where a school obtains written
confirmation of the types and amounts
of title IV loans the student wants for
an award year
Must be obtained before loan funds are
disbursed
Includes signed award letters, web-
based process for accepting awards

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Cash Management
• Excess Cash
Includes any title IV funds received
from ED that are deposited or
transferred into a federal account as a
result of an award cancellation,
adjustment, or recovery
Only the 1% tolerance option is
retained
Finding may trigger cash monitoring or
reimbursement

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Contact Information
We appreciate your feedback and
comments. We can be reached at:

• [email protected] (202) 502-7821

• [email protected] (202) 219-7058
• Fax Number (202) 502-7874

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