Avoid Common Program-Review Findings

USA Funds^® performs required program reviews at schools to ensure that schools 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. Here are six of the most-common issues:

• Inconsistent admissions requirements. Schools must obtain a copy of a student’s high school diploma and properly admit “ability-to-benefit” students, if required by the school’s policy.
• Missing SAR or ISIR documentation. Student Aid Report (SAR) or Institutional Student Information Report (ISIR) documentation missing from the borrower’s file at the time a student’s loan was certified, or discrepancies in SAR/ISIR data can contribute to problems in a program review. In addition, the SAR/ISIRs are the key documents in determining if a student is eligible for a Pell Grant.
• Improper verification. Issues include not properly verifying SAR/ISIR information, including required documentation to account for an override of dependency status and missing or unsigned tax-return documents.
• Improper loan certification. The loan period, cost of attendance, Expected Family Contribution and estimated financial aid all must be calculated for the same length of time. For example, a 12-month loan period with a 12-month cost of attendance should not be matched with the nine-month calculation for expected Family Contribution and Estimated Financial Aid.
• Student budget exceptions. Using incorrect student budget figures as a component of the cost of attendance and failing to include FFELP loan fees in calculating the borrower’s cost of attendance are both common errors.
• Improper loan proration. Schools must use the proper calculation for loan proration.
  • If the original program is less than an academic year, the school needs to determine two ratios:
    
    

    Number of hours in program	X     Grade-Level Limit
    Number of hours in academic year

    
    
    

    Number of weeks in program	X     Grade-Level Limit
    Number of weeks in academic year

    Note: Schools should use the lower percentage of the two and multiply it by grade-level limits.

  • If the original program is greater than an academic year, but the final period of study is less than an academic year, use the number of hours in the final period of study divided by the number of hours in an academic year. Use that ratio and multiply it by the grade-level limits.

    Number of hours in the final period of study	X     Grade-Level Limits
    Number of hours in an academic year

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.