By Jill Desjean, Senior Policy Analyst

NASFAA knows this year’s FAFSA rollercoaster has consumed more of the financial aid office’s energies than in years past. However, this year’s changes aren’t limited to FAFSA simplification. They include several regulatory changes that become effective July 1, 2024. Read on to make sure your campus is prepared to comply with those regulations. 

Gainful Employment (GE) and Financial Value Transparency (FVT)

While the GE/FVT rules go into effect on July 1, 2024, the first compliance deadline for these regulations is the institutional program-level and student-level reporting, which is due on October 1, 2024 (delayed by ED from the original July 31 reporting deadline in light of this year’s FAFSA issues.) While NASFAA has asked for a longer delay, as of today the deadline stands at October 1. 

Reporting requirements have yet to be finalized, but ED has issued one Electronic Announcement on the topic, with more promised as the reporting deadline approaches. Institutional GE/FVT reporting is extensive, and reporting will involve many campus units including, but not limited to, the offices of financial aid, registrar, institutional reporting, student accounts, and information technology. Be sure to collaborate with all campus offices that will be involved in institutional GE/FVT reporting as soon as possible to ensure your campus is ready to hit the ground running as soon as possible after the reporting window opens in July.

One important decision your institution can make now is whether to report institutional data using the standard option (six most recently completed years) or the transitional option (two most recently completed years). Regardless of the institution’s choice for reporting student debt data, ED will use median earnings data based on students who completed in 2017-2018 and 2018-19 for this first year the rule is in effect. 

There are benefits and tradeoffs to each reporting option. Using a transitional 2-year reporting option will be less burdensome because institutions will report only two years’ versus six years’ worth of data. Some institutions may have to use the transitional option because they don’t have 6 years of data or because of other resource limitations. 

Using the transitional reporting option, though, will mean that only newer indebtedness figures from the past two award years will be used in the numerator of the debt-to-earnings (D/E) ratio. If your institution has seen an increase in student indebtedness over the past several years, transitional reporting may cause your institution to have higher D/E ratios than would be observed using standard reporting. 

It is important to note that the decision to use standard or transitional reporting would apply to the entire institution and that institutions choosing the two-year transitional cohort would not be able to change that decision. All reporting would be standard after the first six years the rules are in place. Institutions should weigh the pros and cons of each reporting option carefully before deciding which to use. 

Check out NASFAA’s GE web center for details on the new rules as well as previous iterations. And remember to tune into ED’s Preparing for FVT/GE Reporting – New NSLDS Reports webinar on May 1 and NASFAA’s May 8 webinar for the latest on the new GE/FVT regulations. 

Program Participation Agreement (PPA)

GE Program Length

Not to be confused with the Gainful Employment accountability framework, this new provision focuses exclusively on the maximum length for programs that lead to gainful employment to qualify for Title IV student aid. GE programs in the past were eligible to offer Title IV aid provided they did not exceed 150% of the minimum number of clock hours required for the occupation for which the program prepares the student by the state the institution is located. Effective July 1, 2024, the maximum program length will instead be capped at 100% of the state’s minimum required clock or credit hours. 

There is an exception for a program’s length to be based on another state’s minimum required clock or credit hours if the program meets certain criteria based on where the majority of their students reside, are employed, or intend to seek employment. There is also an exception to these new rules for occupations where state entry-level requirements include completion of an Associate degree or higher, or where the program is delivered entirely through distance education or correspondence courses.

Institutions can continue to offer the longer program to students who were enrolled before July 1, 2024, but new students enrolling on or after July 1 can only be enrolled in the shorter program length. ED recently acknowledged challenges institutions may face with respect to state or accreditor approval of program length changes. While ED has not offered a delay, they have indicated their willingness to use discretion when it comes to enforcement action if an institution can document those challenges. See NASFAA’s AskRegs article on this topic.

Financial aid administrators should be preparing for these changes by ensuring their campus partners who are responsible for determining program length are aware of the changes. 

Title IV Eligible Programs Must Be Programmatically Accredited, Satisfy Educational Requirements for Professional Licensure of Certification, and Comply with State Laws Related to Closure

ED also adds to the PPA requirements that, for each student enrolling in a Title IV eligible program on or after July 1, 2024, the institution must ensure the program is programmatically accredited where required and that the program satisfies education requirements for licensure or certification in the state the institution is located and, for distance education students, the state the student is located. 

Financial aid administrators can help their campuses prepare for this change by ensuring the appropriate offices on campus are aware of these changes and have an action plan in place for compliance.

Transcript withholding

ED is now limiting instances where schools may withhold a student’s transcript. Specifically, institutions may not withhold a transcript if a student owes the school a balance that was caused by errors in the institution’s administration of the Title IV programs or due to fraud or misconduct by the institution or its staff. Institutions also may not withhold transcripts for payment periods in which students received Title IV aid and paid or made arrangements to pay all institutional charges. 

Institutions would still be able to withhold transcripts for payment periods where no Title IV aid was received or where the student did have Title IV aid but owed a balance for that payment period and hadn’t made arrangements to pay that balance. However, institutions may find it challenging to issue partial transcripts and instead choose to abandon the practice of withholding transcripts for past-due balances altogether.

Financial aid administrators should be preparing for these changes by ensuring their partners in the Registrar’s and Business Offices are aware of these changes. Their respective professional associations, AACRAO and NACUBO have created many resources on this topic, including this recorded webinar. 

Administrative capability

Financial aid counseling and communications

New requirements related to financial aid counseling and communications are added as well. ED adds to its existing list of elements required in the financial aid office’s communications to be considered adequate financial aid counseling: cost of attendance based on enrollment status, broken down by individual elements and direct and indirect costs; an indication of whether aid must be earned or repaid; net price; and deadlines for accepting, declining, or adjusting aid offered. 

Financial aid administrators should ensure they are meeting these new financial aid counseling and communications requirements. Institutions are already in compliance with these updated regulations if their aid offers align with NASFAA’s code of conduct or College Cost Transparency Initiative.

Evaluating the validity of a high school diploma

The new regulations are significantly more prescriptive with respect to evaluating the validity of a student’s high school diploma in instances where an institution believes the high school diploma is not valid or was not obtained from an entity that provides secondary school education. A school’s procedures would now have to require that adequate documentation from the high school include transcripts, written descriptions of course requirements, or written statements from the high school attesting to the rigor and quality of its coursework offered. Institutions would also have to document that the high school in question is recognized by relevant state or tribal agencies and that the high school does not appear on any lists published by ED of high schools that issue invalid diplomas.

Financial aid administrators should review their procedures on how they establish the validity of a high school diploma when they have cause to question it to ensure they meet all of these new requirements. 

Providing adequate career services and geographically accessible clinical or externship opportunities

The regulations effective July 1, 2024 add a requirement that institutions provide adequate career services as well as, within 45 days of the student’s completion of required coursework, geographically accessible clinical or externship opportunities related to and required for completion of the credential or licensure. 

Financial aid administrators can ensure their institutions are compliant with these changes by working with staff in the career services and placement offices. 

Disbursing funds in a timely manner that best meets the students’ needs

A new requirement is added to the administrative capability regulations stipulating that an institution is only considered to be administratively capable if it disburses funds in a timely manner. ED would consider an institution out of compliance with this new provision for reasons such as: ED becoming aware of multiple student complaints about disbursement timing, high rates of withdrawals due to delayed disbursements at an institution, institutions delaying disbursements until after students have earned 100% of their aid for Return to Title IV (R2T4) purposes, or institutions delaying disbursements to ensure passage of the 90/10 ratio. 

Saving on a Valuable Education Income-Driven Repayment Plan (SAVE)

After the U.S. Supreme Court blocked President Joe Biden’s student debt relief plan in June 2023, the Biden administration immediately announced its new income-driven repayment (IDR) plan, the Saving on a Valuable Education (SAVE) repayment plan. 

Already implemented

• Auto-Renewal: If a borrower consents to disclose their tax information, their monthly payment will be adjusted and their enrollment in IDR (including SAVE) will be automatically recertified every year

• Automatic re-enrollment: Borrowers will be automatically enrolled into SAVE if they are currently enrolled in or recently applied to the REPAYE plan (which will be replaced by the SAVE plan) 

• Elimination of negative amortization 

• Income below 225% of the poverty line is protected

• Excludes spousal income for borrowers who are married and file separately 

• 20 years to cancellation for undergraduate debt (25 years for graduate debt)

• Elimination of requirement for borrowers returning to SAVE after having previously been on another repayment plan to provide income documentation for years not on REPAYE/SAVE

• Early cancellation for low-balance borrowers

Implementation set for July 1, 2024

• Monthly payment equals 5% of discretionary income for undergraduate debt and 10% for graduate debt

• Credit for consolidation loans that include loans with qualifying payments equal to the weighted average of pre-consolidation qualifying payments made

• Automatic IDR enrollment for borrowers who are 75 days or more late with their monthly payment 

• Restricting new enrollment in certain IDR plans

• Automatic credit toward forgiveness for certain periods of deferment and forbearance

Publication Date: 5/6/2024

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