Avoid Common Program-Review Findings

USA Funds performs required program reviews at schools to ensure that they are meeting all regulatory requirements and guarantor policies in administering the Federal Family Education Loan Program (FFELP). A recent USA Funds presentation at the Kansas Association of Student Financial Aid Administrators (KASFAA) state conference outlined some of the most common problem areas found during program reviews. In the second part of this series, we outline seven additional common program-review issues:

• Failure to notify of the right to cancel EFT disbursements. Schools must notify student borrowers of their right to cancel all or part of their Electronic Funds Transfer (EFT) loan disbursement. When a student's school account is credited with loan funds, the borrower must be notified within 30 days before or after the disbursement of the type of loan, the amount of the disbursement and the borrower's ability to cancel all or a portion of the loan within 14 days of receiving the notification.
• Inconsistent application of satisfactory academic progress. Program-review issues arise when a school does not follow its internal procedures for satisfactory academic progress. These issues may include loan proceeds credited to a student's account while the student was on academic suspension or inconsistent application of the school's policy for actual class attendance.
• Inaccurate means to determine unofficial withdrawals. Schools are responsible for developing a method to determine whether a Title IV aid recipient has ceased attendance without notifying the school. This can be done by tracking students who have received a failing grade during a particular term to determine if the failing grade is due to (1) failing to attend classes and failing all subjects, or (2) failing due to an unofficial withdrawal.
• Incorrect Return of Title IV Funds calculation. Schools must properly calculate Return of Title IV Funds (R2T4) when a student completely withdraws from all classes. The R2T4 calculation is required for all refunds made on or after Oct. 7, 2000. In addition, incorrect calculations occur when books and supplies are not included as institutional charges. If a school cannot document a "real and reasonable" opportunity for students to purchase books and supplies from a source outside of campus, then the school must include these charges in the institutional charges.
• Out-of-date entrance- and exit-interview forms. Schools must inform borrowers about the Master Promissory Note (MPN) process, the extended repayment plan option and availability of the Office of the Ombudsman. During counseling sessions, schools must not use outdated forms that lack this information. Student-borrower signatures and dates cannot be missing from the forms.
• Enrollment-reporting discrepancies. Discrepancies between the Financial-Aid and Registrar offices must be reconciled in order to have a clean program review. In addition, schools must return enrollment reports in a timely manner, usually within 30 days, and report the actual last day of attendance rather than the date on which the last day of attendance was determined.
• Inaccurate crime statistics. Schools must provide accurate crime statistics to all students on an annual basis. A common error in publicizing these statistics is the failure to properly categorize crime statistics. Categories for murder must include (1) murder and non-negligent manslaughter and (2) negligent manslaughter. Categories for sex offenses must include (1) forcible sex offenses and (2) nonforcible sex offenses.

Correcting the most common issues before a program review will result in improved compliance and better service to students. For more information about common findings during program reviews, refer to Common Manual 11.3.C. If you have specific questions about program reviews, contact USA Funds' Policy staff.