The Higher Education Act of 1965, as amended, provides the regulatory framework for institutions of higher education to provide federal assistance to their students.
The Act was set up to be reauthorized every five years and over the years has been extended. But the last reauthorization of the HEA took place in 2008, which has been living on extensions and new regulations that were never put into statutes.
Because of this, institutions are bombarded with numerous new regulations yearly.
We have had three different versions of “Borrower Defense to Repayment Program” (some on hold due to litigation or changes in administration).
There is also new, more harmful Gainful Employment calculation (on round two with a pending lawsuit).
And all institutions are required to report several years of information.
So many changes may eliminate many nondegree programs, causing some schools to close their doors. More of these changes include:
- The 90/10 calculation for proprietary schools,
- financial transparency regulations,
- distance education scrutiny,
- change of ownership and financial liability tied to owners/equity companies,
- increased letters of credit,
- recalculation of financial ratios,
- additional cyber security requirements,
- new watchdog groups to monitor institutions,
- and the list goes on.
ED Prcoessing System Changes
The 2024–2025 award year has its own challenges with a major overhaul of ED’s processing systems:
- interface with IRS,
- FAFSA simplification,
- Creation of a school/partner portal, and
- Changes to frequently used words in the financial aid glossary.
The Simplified FAFSA Is Not So Simple
On December 31, 2023, the soft launch of the 2023–2024 FAFSA was released, three months after the October 1 normal release, with many delays due to volume control, errors, and technical issues. We don’t expect the data to be processed until sometime in February. This poses a problem for early registration, award packages, and state grant deadlines for many institutions and students.
The new FAFSA uses a whole new vocabulary that students are not familiar with, such as “contributors” instead of “student/parents”, “SAI” replaces the “EFC.” And it requires all contributors to actually log in the students FAFSA with their own FSA ID.
Parents are no longer able to just complete a signature page. Additionally, everyone must give permission to exchange data with the IRS.
Calculating Pell Grant Awards
Calculating awards will be another interesting process, since there will not be a Pell payment chart to use. Once the 2023–24 Pell Grant award is determined, some students’ SAR will indicate maximum eligibility based on an SAI of 0 to negative 1500, another new concept. Others will receive a minimum amount.
For students that fall in between the minimum and maximum award: calculate the COA minus the SAI (was the EFC) and round that number up or down to the nearest $5.00.
For term-based students attending less than full time: take the award amount and prorate it by the credits attending in the term divided by the full-time credits in the academic year (Pell award x 8cr/24cr = $).
Full Verification Requirements Return
Since 2018, when verification requirements changed due to COVID, the institutions did little verification. The 2023–2024 award year brings full verification back into play, and there is no history for student selection criteria.
Reaching Out for Help
There are numerous resources to help you through the next months as you prepare and adjust for the new award year. ED has webinars and training on the knowledge center website and other organizations, such as FAME offer training and consulting services.
Check out Sally Samuels’ next workshop: