Contents

INTRODUCTION ............................................................................................... I

CHAPTER 1 – INSTITUTIONAL AND PROGRAM ELIGIBILITY .............. 2-1

THE THREE DEFINITIONS OF ELIGIBLE INSTITUTIONS ................................................................................. 2-1
INSTITUTIONAL CONTROL ................................................................................................................................... 2-1
ELIGIBLE INSTITUTION .......................................................................................................................................... 2-2
LEGAL AUTHORIZATION BY A STATE ................................................................................................................ 2-3
ACCREDITATION ...................................................................................................................................................... 2-3
Alternatives to accreditation ............................................................................................................................... 2-4
Changes in accreditation ...................................................................................................................................... 2-4
Change in primary institution-wide accreditation ................................................................................... 2-4
Accreditation by more than one institution-wide accrediting agency .......................................... 2-4
Primary accreditor .................................................................................................................................................... 2-5
Dual accreditation .................................................................................................................................................... 2-5
ADMISSIONS STANDARDS ................................................................................................................................... 2-5
High school diploma ............................................................................................................................................... 2-5
Recognized equivalent of a high school diploma .................................................................................... 2-6
Home schooled .......................................................................................................................................................... 2-6
GED preparatory program required ................................................................................................................ 2-7
“TWO-YEAR” RULE .................................................................................................................................................. 2-7
ADDITIONAL INSTITUTIONAL ELIGIBILITY FACTORS ................................................................................... 2-8
Demonstrations of compliance ......................................................................................................................... 2-8
The 90/10 Rule ............................................................................................................................................................ 2-9
The cash basis of accounting .............................................................................................................................. 2-9
Exclusions from fraction ........................................................................................................................................ 2-9
SFA Program funds for institutional charges ............................................................................................. 2-10
Revenues ..................................................................................................................................................................... 2-10
Time period covered ............................................................................................................................................. 2-11
Failure to satisfy the 90/10 rule ........................................................................................................................ 2-11
Financial Statement Disclosure ........................................................................................................................ 2-11
Financial Statement Notification ..................................................................................................................... 2-11
Correspondence course limitation................................................................................................................. 2-12
Correspondence student limitation .............................................................................................................. 2-12
Incarcerated student limitation ....................................................................................................................... 2-13
Ability-to-benefit limitation ............................................................................................................................... 2-13
Bankruptcy ................................................................................................................................................................. 2-14
Crimes involving SFA program funds ............................................................................................................ 2-14
PROGRAM ELIGIBILITY REQUIREMENTS ....................................................................................................... 2-14
Determination of program eligibility ............................................................................................................ 2-14
Types of eligible programs at an institution of higher education .................................................. 2-15
Eligible programs at a proprietary or postsecondary vocational institution ............................ 2-15
Exceptions to eligible program definition .................................................................................................. 2-17
WEEKS OF INSTRUCTION AND THE 12-HOUR RULE .................................................................................. 2-17
Week of instruction/instructional time ........................................................................................................ 2-18
Minimum Weeks and Hours ............................................................................................................................... 2-18
Treatment of holidays ........................................................................................................................................... 2-19
ADDITIONAL ELIGIBILITY REQUIREMENTS .................................................................................................. 2-19
ESL Programs............................................................................................................................................................. 2-19
Study abroad programs ....................................................................................................................................... 2-19
 Flight schools ............................................................................................................................................................ 2-20
CLOCK HOUR/CREDIT HOUR CONVERSIONS .............................................................................................. 2-20
FOREIGN SCHOOLS ELIGIBLE FOR FFEL PROGRAMS ................................................................................ 2-22
Foreign medical schools ...................................................................................................................................... 2-22
REPORTING INFORMATION ON FOREIGN SOURCES ................................................................................. 2-23
Who must report? ................................................................................................................................................... 2-24
Contents of disclosure report ........................................................................................................................... 2-24
Alternative reporting ............................................................................................................................................ 2-25
Where to report foreign gift information .................................................................................................... 2-25
SOLOMON-POMBO AMENDMENT ................................................................................................................. 2-25

CHAPTER 2 – GENERAL PARTICIPATION REQUIREMENTS ................ 2-27

THE PROGRAM PARTICIPATION AGREEMENT ............................................................................................. 2-27
Purpose and scope of the PPA .......................................................................................................................... 2-27
PPA Requirements .................................................................................................................................................. 2-28
Voter Registration Required............................................................................................................................... 2-31
GED preparatory program required .............................................................................................................. 2-32
Civil rights and privacy requirements ........................................................................................................... 2-32
DEFINITION OF A PAYMENT PERIOD.............................................................................................................. 2-32
Payment period for term-based credit hour programs ........................................................................ 2-33
Payment period for nonterm credit hour programs and clock hour programs....................... 2-33
Payment period for programs of an academic year or less ................................................................ 2-34
Payment period for programs of multiples of an academic year .................................................... 2-35
Programs longer than an academic year with a remainder ............................................................... 2-36
Definition of coursework ..................................................................................................................................... 2-37
More than two payment periods per academic year ............................................................................ 2-37
ACADEMIC YEAR REQUIREMENTS .................................................................................................................. 2-38
Thirty-week minimum of instructional time .............................................................................................. 2-38
Determining academic year length ............................................................................................................... 2-38
Definition of a week of instructional time .................................................................................................. 2-38
12-hour rule and definition of an academic year .................................................................................... 2-38
Reductions in academic year length ............................................................................................................. 2-39
CONTRACTS WITH THIRD-PARTY SERVICERS .............................................................................................. 2-40
Excluded activities .................................................................................................................................................. 2-40
Employees of a school .......................................................................................................................................... 2-41
Requirements for contracting with a third-party servicer .................................................................. 2-41
Institutional liability ............................................................................................................................................... 2-41
Notifying the Department of contracts ....................................................................................................... 2-41
ANTI-DRUG ABUSE REQUIREMENTS .............................................................................................................. 2-42
Requirements for a drug-free workplace .................................................................................................... 2-43
Submission of certification to the department ........................................................................................ 2-43
Distribution to students and staff ................................................................................................................... 2-43
Development and review of a drug prevention program .................................................................. 2-43
Consequences of noncompliance .................................................................................................................. 2-44
ANTI-LOBBYING CERTIFICATION AND DISCLOSURE ................................................................................. 2-45
CHAPTER 3 – ADMINISTRATIVE CAPABILITY ..................................... 2-47
REQUIRED ELECTRONIC PROCESSES ............................................................................................................. 2-47
Access to the “Information for Financial Aid Professionals” Web site ............................................. 2-48
Submission of the Application to Participate (Recertification) through the Internet: .......... 2-49
Submission of the FISAP through TIV WAN ................................................................................................ 2-50
January 1, 1999 requirements ........................................................................................................................... 2-50
Windows 95, Windows NT or higher .............................................................................................................. 2-50
Submission of Federal Pell Grant payment data ...................................................................................... 2-50
Submission of SSCR data and Federal Perkins Loan data to the NSLDS ...................................... 2-50
Submission of Federal Perkins Loan data to the NSLDS ...................................................................... 2-50
COORDINATING OFFICIAL ................................................................................................................................ 2-50
CONSISTENCY OF INFORMATION ................................................................................................................... 2-51
OIG REFERRALS .................................................................................................................................................... 2-51
COUNSELING ........................................................................................................................................................ 2-51
ADEQUATE STAFFING ......................................................................................................................................... 2-52
SYSTEM OF CHECKS AND BALANCES ........................................................................................................... 2-52
SATISFACTORY ACADEMIC PROGRESS ......................................................................................................... 2-52
Academic Amnesty/Renewal ............................................................................................................................ 2-54
FINANCIAL AID HISTORY ................................................................................................................................... 2-54
DEFAULT RATES .................................................................................................................................................... 2-55
Default management plan ................................................................................................................................. 2-55
WITHDRAWAL RATES .......................................................................................................................................... 2-56
DEBARMENT AND SUSPENSION CERTIFICATION ....................................................................................... 2-56
Debarment of school or its principals........................................................................................................... 2-56
Checking prospective employees or contractors ................................................................................... 2-57
Lower-tier covered transactions ...................................................................................................................... 2-57

CHAPTER 4 – FINANCIAL RESPONSIBILITY ............................................ 2-59

GENERAL STANDARDS ....................................................................................................................................... 2-60
Proprietary or private nonprofit institution ............................................................................................... 2-60
Audit opinions and past performance ......................................................................................................... 2-60
Composite score ...................................................................................................................................................... 2-60
Refund Reserve Standards.................................................................................................................................. 2-63
Current in debt payments .................................................................................................................................. 2-64
Public schools ........................................................................................................................................................... 2-64
ALTERNATIVES TO THE GENERAL STANDARDS ........................................................................................... 2-65
Letter of credit alternative for new school ................................................................................................. 2-66
Letter of credit alternative for participating school ............................................................................... 2-66
Zone alternative....................................................................................................................................................... 2-66
Provisional certification for school not meeting standards ............................................................... 2-67
Provisional certification for school where persons or entities owe liabilities ........................... 2-68
PAST PERFORMANCE AND AFFILIATION STANDARDS ............................................................................. 2-69
Past performance of a school............................................................................................................................ 2-69
Past performance of persons affiliated with a school ........................................................................... 2-69
FINANCIAL STATEMENTS ................................................................................................................................... 2-70
FOREIGN SCHOOLS............................................................................................................................................. 2-70
CHAPTER 5 – CASH MANAGEMENT .........................................................2-71
PURPOSE OF CASH MANAGEMENT REGULATIONS .................................................................................. 2-71
REQUESTING FUNDS .......................................................................................................................................... 2-72
The advance payment method ........................................................................................................................ 2-72
The reimbursement method ............................................................................................................................. 2-72
Limitations on use of FFEL funds .................................................................................................................... 2-73
The cash monitoring payment method ....................................................................................................... 2-74
The just-in-time payment method ................................................................................................................. 2-74
GAPS ....................................................................................................................................................................... 2-76
MAINTAINING AND ACCOUNTING FOR FUNDS ......................................................................................... 2-76
Bank account notification requirements ..................................................................................................... 2-77
Interest-bearing or investment account ...................................................................................................... 2-77
Exceptions .................................................................................................................................................................. 2-78
Federal Perkins Loan Program participants ............................................................................................... 2-78
Accounting and financial requirements ...................................................................................................... 2-78
DISBURSING FUNDS ........................................................................................................................................... 2-78
Definition of disbursed ........................................................................................................................................ 2-79
Exceptions .................................................................................................................................................................. 2-79
Disbursement by crediting a student’s account ...................................................................................... 2-80
Allowable charges .................................................................................................................................................. 2-80
Disbursing SFA funds directly ........................................................................................................................... 2-81
DISBURSEMENT BY PAYMENT PERIOD .......................................................................................................... 2-81
Excused absences ................................................................................................................................................... 2-82
EARLY DISBURSEMENTS .................................................................................................................................... 2-82
LATE DISBURSEMENTS ....................................................................................................................................... 2-83
SFA CREDIT BALANCES ..................................................................................................................................... 2-84
Holding credit balances ....................................................................................................................................... 2-86
PRIOR-YEAR CHARGES ....................................................................................................................................... 2-86
REQUIRED SCHOOL NOTIFICATIONS ............................................................................................................. 2-87
Opportunity for loan cancellation .................................................................................................................. 2-87
REQUIRED STUDENT AUTHORIZATIONS ...................................................................................................... 2-89
EXCESS CASH ........................................................................................................................................................ 2-91
Allowable excess cash tolerances ................................................................................................................... 2-91

CHAPTER 6 – RETURN OF TITLE IV FUNDS ...........................................2-93

WITHDRAWALS* ................................................................................................................................................... 2-93
Worksheets ................................................................................................................................................................. 2-94
General requirements ........................................................................................................................................... 2-94
Verification ................................................................................................................................................................. 2-95
Consumer information ......................................................................................................................................... 2-95
Foreign schools ........................................................................................................................................................ 2-96
Definition of a Title IV recipient ........................................................................................................................ 2-96
Rounding .................................................................................................................................................................... 2-97
Date of the institution’s determination that the student withdrew .............................................. 2-97
Use of payment period or period of enrollment ..................................................................................... 2-98
Payment period ....................................................................................................................................................... 2-99
Period of enrollment ............................................................................................................................................. 2-99
Applicability ............................................................................................................................................................... 2-99
Step 1: Student’s Title IV Aid Information ................................................................................................. 2-100
Funds to include in the calculation ............................................................................................................. 2-100
FSEOG program funds ....................................................................................................................................... 2-100
LEAP program funds ........................................................................................................................................... 2-101
Title IV Aid Disbursed ......................................................................................................................................... 2-101
 Title IV Aid that Could Have Been Disbursed ......................................................................................... 2-101
Step 2: Percentage of Title IV Aid Earned .................................................................................................. 2-104
Withdrawal Date ................................................................................................................................................... 2-104
Approved leaves of absence .......................................................................................................................... 2-115
Unapproved leaves of absence ..................................................................................................................... 2-119
Percentage of payment period or period of enrollment completed ......................................... 2-119
Credit-hour programs ........................................................................................................................................ 2-119
Scheduled breaks ................................................................................................................................................. 2-119
Step 3: Amount of Title IV aid earned by the student ........................................................................ 2-122
Effects of a post-withdrawal reduction in charges .............................................................................. 2-123
Step 4: Total Title IV Aid to be disbursed or returned ......................................................................... 2-123
Post-withdrawal disbursements ................................................................................................................... 2-123
Crediting a student’s account ........................................................................................................................ 2-124
Notice to a student offering a post-withdrawal disbursement ..................................................... 2-126
Disburse grant before loan ............................................................................................................................. 2-127
Title IV aid to be returned ................................................................................................................................ 2-129
Step 5: Amount of unearned Title IV aid due from the school ....................................................... 2-129
Aid disbursed to the student before institutional charges are paid ........................................... 2-130
Institutional charges ........................................................................................................................................... 2-130
Use of institutional charges in determining the school's responsibility for return ............. 2-130
Effects of Waivers on Institutional Charges ............................................................................................. 2-132
January 7, 1999 Policy Bulletin....................................................................................................................... 2-132
Institutional versus noninstitutional charges ......................................................................................... 2-132
Principle 1: Most costs are institutional ..................................................................................................... 2-133
Principle 2: An institutional charge does not need to be assessed to all students .............. 2-133
Principle 3: Institutional charges may or may not be charged to a student's account ...... 2-133
General guidelines for defining institutional charges ....................................................................... 2-134
Demonstrating a real and reasonable opportunity ............................................................................ 2-134
Applying the rules: Is this an institutional charge? .............................................................................. 2-136
Summary .................................................................................................................................................................. 2-137
Step 6: Return of funds by the school ........................................................................................................ 2-138
Order of return of Title IV funds .................................................................................................................... 2-138
Timeframe for the return of Title IV funds. ............................................................................................... 2-139
Step 7: Initial amount of unearned Title IV aid due from the student ........................................ 2-139
Step 8: Return of funds by the student ...................................................................................................... 2-139
GRANT OVERPAYMENTS .................................................................................................................................. 2-140
Student overpayments less than $25 ......................................................................................................... 2-141
Accepting payments from students ........................................................................................................... 2-143
Notifying the Department ............................................................................................................................... 2-143
Reporting and referring overpayments .................................................................................................... 2-144
Accepting payments on referred overpayments ................................................................................. 2-146

CASE STUDIES.............................................................................................2-147

CHAPTER 7 – CONSUMER INFORMATION ...........................................2-203

BASIC CONSUMER INFORMATION REQUIREMENTS ................................................................................ 2-205
Financial Aid Information ................................................................................................................................. 2-205
General Information about the School ..................................................................................................... 2-206
CONSUMER INFORMATION FROM THE DEPARTMENT .......................................................................... 2-207
STUDENT RIGHT-TO-KNOW DISCLOSURES ................................................................................................ 2-208
Determining the Cohort ................................................................................................................................... 2-209
Standard-Term Schools ..................................................................................................................................... 2-209
Nonstandard Term or Non-Term Schools................................................................................................. 2-209
 Definitions ............................................................................................................................................................... 2-210
Waivers ...................................................................................................................................................................... 2-210
Reporting Information on Rates for the General Student Body Cohort ................................... 2-211
Step 1: Determining the cohort .................................................................................................................... 2-211
Step 2: Calculating the rates ........................................................................................................................... 2-211
Step 3: Disclosing the rates ............................................................................................................................. 2-212
Reporting information on rates for student athletes ......................................................................... 2-215
Step 1: Determining the cohort .................................................................................................................... 2-215
Step 2: Calculating the rates for completion or graduation for student athletes ................. 2-215
Step 3 - Disclosing the rates for student athletes ................................................................................ 2-216
Supplemental Information .............................................................................................................................. 2-216
EQUITY IN ATHLETICS ...................................................................................................................................... 2-217
Disclosure of the Report ................................................................................................................................... 2-217
Contents of the Equity in Athletics/EADA Report ................................................................................ 2-218
Definitions ............................................................................................................................................................... 2-220
LOAN COUNSELING .......................................................................................................................................... 2-221
DRUG AND ALCOHOL ABUSE PREVENTION INFORMATION ................................................................. 2-221
Information to be included in drug prevention materials ............................................................... 2-221
Distribution of Materials to All Students and Employees ................................................................ 2-222
MISREPRESENTATION ....................................................................................................................................... 2-222
Definition of Misrepresentation ................................................................................................................... 2-222
Nature of Educational Program .................................................................................................................... 2-223
Nature of Financial Charges ............................................................................................................................ 2-224
Employability of Graduates ............................................................................................................................. 2-224
CAMPUS SECURITY ........................................................................................................................................... 2-224
General Information ........................................................................................................................................... 2-224
Distribution of the Campus Crime Report ............................................................................................... 2-226
Definition of campus .......................................................................................................................................... 2-227
Timely Warning ..................................................................................................................................................... 2-227
Campus Security Authority ............................................................................................................................. 2-228
Professional and pastoral counselors excluded from reporting requirements..................... 2-229
FERPA .................................................................................................................................................................... 2-230
Daily Crime Log ..................................................................................................................................................... 2-231
The Annual Security Report ............................................................................................................................ 2-231
Policies and Procedures for Reporting Crimes ...................................................................................... 2-232
Complaints against schools ............................................................................................................................ 2-237

CHAPTER 8 – RECORDKEEPING AND DISCLOSURE ...........................2-243

REQUIRED RECORDS ........................................................................................................................................ 2-243
Program records ................................................................................................................................................... 2-244
FISCAL RECORDS ............................................................................................................................................... 2-244
General records ..................................................................................................................................................... 2-245
RECORD RETENTION PERIODS ...................................................................................................................... 2-247
RECORD MAINTENANCE ................................................................................................................................. 2-248
Acceptable formats ............................................................................................................................................. 2-248
Safeguarding electronic records .................................................................................................................. 2-249
Special requirements for SARs and ISIRs .................................................................................................. 2-249
EXAMINATION OF RECORDS .......................................................................................................................... 2-250
Location .................................................................................................................................................................... 2-250
Cooperation with agency representatives .............................................................................................. 2-250
Timely access ......................................................................................................................................................... 2-250
Reasonable access to personnel .................................................................................................................. 2-251
SFA recipient information ................................................................................................................................ 2-251
DISCLOSING STUDENT INFORMATION ....................................................................................................... 2-251
FERPA .................................................................................................................................................................... 2-251
Disclosure requests for information ........................................................................................................... 2-254
Sample disclosure statement ......................................................................................................................... 2-254
Redisclosure to other authorized parties ................................................................................................. 2-254

CHAPTER 9 – AGREEMENTS BETWEEN SCHOOLS .............................2-255

CONSORTIUM AGREEMENT ........................................................................................................................... 2-255
Elements of a consortium agreement ....................................................................................................... 2-255
Effective date of the agreement ................................................................................................................... 2-256
CONTRACTUAL AGREEMENT ......................................................................................................................... 2-257
STUDY ABROAD OR DOMESTIC EXCHANGE PROGRAMS ...................................................................... 2-258

CHAPTER 10 – APPLYING FOR AND MAINTAINING

PARTICIPATION IN THE SFA PROGRAMS .........................................2-259
APPLYING TO PARTICIPATE ............................................................................................................................. 2-259
Electronic application ........................................................................................................................................ 2-260
Electronic application process ...................................................................................................................... 2-260
PRECERTIFICATION TRAINING REQUIREMENT .......................................................................................... 2-262
WHEN TO COMPLETE AN APPLICATION ..................................................................................................... 2-263
A school seeking initial certification to participate in the SFA programs ................................ 2-263
Reapplication and recertification ................................................................................................................. 2-264
A school seeking to be recertified ............................................................................................................... 2-264
An eligible nonparticipating institution ................................................................................................... 2-265
A school that voluntarily left the SFA programs ................................................................................... 2-266
A school that was terminated from the SFA programs ..................................................................... 2-266
A school that undergoes a change in ownership ................................................................................ 2-267
Preacquisition review ......................................................................................................................................... 2-268
Temporary approval for continued participation on provisional certification ...................... 2-268
Changes at Public Institutions ....................................................................................................................... 2-270
Change in controlling interest ....................................................................................................................... 2-271
Owner’s death or retirement .......................................................................................................................... 2-271
Changes in ownership interest and 25% threshold ............................................................................ 2-272
Change in Ownership for Publicly Traded Corporations .................................................................. 2-272
Change in Ownership or Control of a Non-Profit Institution ......................................................... 2-273
Reporting ................................................................................................................................................................. 2-273
Steps to be taken by former owners .......................................................................................................... 2-275
Payments to eligible students ....................................................................................................................... 2-275
Steps to be taken by prospective owners ............................................................................................... 2-276
Accepting liabilities and return of funds policy .................................................................................... 2-276
Effect of cohort default requirements ....................................................................................................... 2-276
Audits and closeout procedures .................................................................................................................. 2-277
PPA and ECAR ........................................................................................................................................................ 2-277
Effective date for participation ...................................................................................................................... 2-278
Provisional certification .................................................................................................................................... 2-278
Revoking provisional certification ............................................................................................................... 2-279
SUBSTANTIVE CHANGES AND
HOW TO REPORT THEM ............................................................................................................................ 2-279
Changes requiring the Department’s written approval ................................................................... 2-280
Changes not requiring the Department’s written approval ........................................................... 2-281
ADDING LOCATIONS OR PROGRAMS .......................................................................................................... 2-283
 Eligibility of additional locations .................................................................................................................. 2-283
Reporting a New Location ............................................................................................................................... 2-284
Applying for Approval of a New Location ............................................................................................... 2-285
Adding a program — when a school may make eligibility determination ............................. 2-285
ED must approve all other added programs .......................................................................................... 2-286
Waivers ...................................................................................................................................................................... 2-286
Changing from a non-main campus to a branch campus ............................................................... 2-286
Disbursement Rules Related to Applications ......................................................................................... 2-287
Changes in accreditation ................................................................................................................................. 2-288
Notification of school closure or bankruptcy ........................................................................................ 2-289
QUALITY ASSURANCE PROGRAM ................................................................................................................ 2-289
EXPERIMENTAL SITES INITIATIVE .................................................................................................................. 2-291

CHAPTER 11 – PROGRAM INTEGRITY....................................................2-293

STATE AND ACCREDITING AGENCY ROLES ................................................................................................ 2-293
State role .................................................................................................................................................................. 2-293
Accrediting agency role .................................................................................................................................... 2-293
THE DEPARTMENT’S ROLE .............................................................................................................................. 2-295
Your comments are important ...................................................................................................................... 2-295
Audit requirements for schools .................................................................................................................... 2-296
Simultaneous audit submissions ................................................................................................................. 2-296
Types of audit guidelines ................................................................................................................................. 2-299
Submission dates for SFA audits ................................................................................................................... 2-300
Compliance audit submission requirements ......................................................................................... 2-301
Financial statements audit submission requirements ....................................................................... 2-302
Consolidated statements ................................................................................................................................. 2-302
Required disclosure of 90/10 finding ......................................................................................................... 2-303
Audits for foreign schools ................................................................................................................................ 2-303
Audits for third-party servicers ...................................................................................................................... 2-303
Having the audit performed ........................................................................................................................... 2-304
Submitting audits ................................................................................................................................................ 2-304
Access to records ................................................................................................................................................. 2-305
PROGRAM REVIEWS.......................................................................................................................................... 2-306
Selection of schools for review ..................................................................................................................... 2-306
Written report ........................................................................................................................................................ 2-307
GUARANTY AGENCY REVIEWS ...................................................................................................................... 2-307
APPEALING AUDIT AND PROGRAM REVIEW DETERMINATIONS ......................................................... 2-308
WHEN A SCHOOL CEASES TO BE AN ELIGIBLE INSTITUTION ............................................................... 2-309
Loss of accreditation .......................................................................................................................................... 2-309
Exceptions ............................................................................................................................................................... 2-309
REQUIREMENTS WHEN A SCHOOL’S SFA PARTICIPATION ENDS ......................................................... 2-310
VOLUNTARY WITHDRAWAL FROM SFA PARTICIPATION ........................................................................ 2-310
INVOLUNTARY WITHDRAWAL FROM SFA PARTICIPATION .................................................................... 2-310
When participation ends .................................................................................................................................. 2-311
Additional closeout procedures ................................................................................................................... 2-312
CASE MANAGEMENT ........................................................................................................................................ 2-312
Possible actions..................................................................................................................................................... 2-313
CORRECTIVE ACTIONS AND SANCTIONS ................................................................................................... 2-314
Administrative subpoena authority ............................................................................................................ 2-314
Sanctions .................................................................................................................................................................. 2-314
Actions due to program violations or misrepresentation ............................................................... 2-315
Emergency action ................................................................................................................................................ 2-315
 Fine .............................................................................................................................................................................. 2-315
Limitation ................................................................................................................................................................. 2-316
Suspension .............................................................................................................................................................. 2-316
Termination ............................................................................................................................................................. 2-316
Corrective action .................................................................................................................................................. 2-316
Possibility of reinstatement ............................................................................................................................ 2-316
Criminal penalties ................................................................................................................................................ 2-317

CHAPTER 12 – DISTANCE EDUCATION .................................................2-319

DEAR COLLEAGUE LETTER GEN-98-10 ........................................................................................................ 2-320
Definitions ............................................................................................................................................................... 2-320
What is a correspondence course? .............................................................................................................. 2-320
What is a telecommunications course? ..................................................................................................... 2-321
What is an educational program? ................................................................................................................ 2-321
Institutional eligibility ........................................................................................................................................ 2-321
What is the effect of correspondence courses
on institutional eligibility? ............................................................................................................................... 2-321
Student eligibility ................................................................................................................................................. 2-322
Are there any limits on a student’s eligibility for SFA
program funds for attendance in a correspondence course? ....................................................... 2-322
Cost of Attendance ............................................................................................................................................. 2-323
What costs can be included in a student’s cost of attendance? ................................................... 2-323
Pell and FSEOG)Program disbursements ................................................................................................. 2-323
Special disbursement rules that apply to students in correspondence courses? ................ 2-323
Miscellaneous questions and answers ...................................................................................................... 2-324
DISTANCE EDUCATION DEMONSTRATION PROGRAM ........................................................................... 2-325
Purpose of the Demonstration Program .................................................................................................. 2-325
Waivers of SFA program requirements ...................................................................................................... 2-325
Eligible applicants ................................................................................................................................................ 2-326
Applying to participate ..................................................................................................................................... 2-326
Selection of participants .................................................................................................................................. 2-327
Evaluation of the Demonstration Program ............................................................................................. 2-327
Oversight .................................................................................................................................................................. 2-328