Introduction

Introduction
The purpose of this publication is to describe how a school becomes eligible to participate in the
Federal Student Aid (FSA) programs and to explain the administrative and fiscal
requirements of FSA program participation. In addition, this publication discusses other issues
relevant to the general administration of the FSA programs.

This chapter provides a summary of the changes and

clarifications presented in greater detail in the chapters that follow.
Alone, the text here does not provide schools with the guidance
needed to satisfactorily administer the Title IV, HEA programs. For
more complete guidance, you should refer to the text in the
chapters cited, the Code of Federal Regulations (CFR) and the
Higher Education Assistance Act (HEA) as amended.

Throughout this volume, new information is indicated with the

following symbol.

New

When the text represents a clarification rather than a change, it

is indicated with this symbol.

Clarification

MAJOR CHANGES BY CHAPTER

Chapter 1 – Institutional and Program Eligibility
√ We have clarified, for institutional eligibility purposes, the
criteria for considering home-schooled students to be the
equivalent of high school graduates.
Chapter 5 – Cash Management
√ We have clarified that as long as regulations do not
specifically require that a school send a notice via U.S. mail,
the school may send that notice via electronic means. Unless
required by regulation, a school does have to obtain and
maintain confirmation of a notice sent electronically.

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√ We have added a section explaining that a school may obtain

authorizations electronically as long as the school provides
the protections enumerated under The Electronic Signatures in
Global and National Commerce Act.
Chapter 6 – Return of Title IV Funds
√ We have clarified that the determination of a student’s
withdrawal date is the responsibility of the school. If a school
is using a last date of attendance at an academically-related
activity as the withdrawal date, the school, not the student,
must document the student’s attendance.
√ We have revised the requirement for including LEAP funds
in a Return calculation.
√ We discuss the Return requirements when a student fails to
earn a passing grade in any of his or her classes.
√ We discuss the ways that COD will affect how schools enter
student payments in the Pell system and refer overpayments
to ED Collections.
√ We alert schools to the fact that payments on Pell Grant
overpayments and reductions in Pell Grants that occurred
during the 1999-2000, 2000-2001, and 2001-2002 award years
will be recorded differently than those that occur in
subsequent years. In addition, we inform schools that for the
2002-2003 award year, schools that are full participants in
COD will record reductions and payments in a different way
than phase-in participants.
√ We have clarified the actions that an institution should take
if it expels, suspends, or otherwise disenrolls a student
during a period.
√ We have clarified that for a student who withdraws after the
60% point-in-time, even though a return is not required, a
school must still complete a Return calculation in order to
determine whether the student is eligible for a post-
withdrawal disbursement.
√ We have clarified that any time a student enrolled in a
standard-term program offered in modules withdraws or
drops a class before having begun attendance in all classes
for which the student was registered, the institution must
recalculate the student’s eligibility for Pell and campus-based
funds based on a revised cost of education and enrollment
status (34 CFR 690.80(2)(2)(ii)).
√ We have clarified that generally the type of leave of absence
that would meet the definition of an approved leave of
absence applies primarily to clock hour or self-paced credit
hour programs.

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√ We have provided instructions on the actions an institution

must and may not take in the event of the death of a
student.
√ We have clarified that under the Return regulations,
application and registration fees are excluded from
institutional charges because they are not an educational
cost.
√ We explain that if an institution tracks the completion of
clock hours in portions of an hour, it might be able to use
portions of an hour to determine the percentage of Title IV
aid earned when a student withdraws.
√ We have clarified that a school must include the cost of
books and materials purchased with a book voucher
(generated from Title IV funds) in the Return of funds
calculation in Step 5, Part G, if the book voucher cannot be
used to purchase course materials from a convenient
unaffiliated source.
√ We have provided instructions on the actions a school
should take if it receives a payment for an overpayment
previously referred to ED Collections if
1. the overpayment was made in the current award year;
and
2. the payment will retire the student’s debt in full.
√ We have included a sample of the information a school must
provide in its consumer information about the Return of
Title IV aid.
Chapter 10 – Applying for and Maintaining
Participation in the FSA Programs
√ Chapter 10 has been reorganized and the section describing
Quality Assurance Program has been expanded.
Chapter 12 – Distance Education
√ The section on correspondence and telecommunications
courses and students has been reorganized and expanded. It
now provides a more detailed explanation on the effects of
correspondence and telecommunications courses and
students on institutional eligibility.

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