As the World Turns – Policies and Procedures

As we start the beginning of a new award year, it is probably a fitting time to start considering the updates necessary to your Policies and Procedures Manual. Hopefully, your college has a Policy and Procedure Manual that is complete or reasonably complete since Federal regulations require colleges to have written policies and procedures for the administration of the Title IV aid programs. Although an official paper or electronic manual is not required for this purpose it is often very beneficial to the Financial Aid office. By creating and maintaining a manual, all of your policies and procedures are stored in one location, readily available in the event that it is requested during an audit or is needed by Financial Aid personnel. So let’s take a few minutes and look at an overview of the required items, just to ensure your college is up-to-date and covered. This is not an all-inclusive list; however, this should be used as a foundation for your Policies and Procedures Manual:

Recommended Sections:

  1. Student Eligibility – this section should contain your process to resolve student eligibility issues such as: conflicting information, third-step verification process for non-citizenship status, validation of High School (separate from verification process V-4/V-5) and resolving C-Flags;

  2. Verification – your college must have a written verification policy on deadlines, consequences or failure to submit, changes in EFC, correction of FAFSA data, etc.;

  3. Professional Judgment (PJ’s) – procedures to inform students on the availability of special conditions due to unusual circumstances, outlining standard forms and requirements and notification to students of outcome;

  4. Satisfactory Academic Progress (SAP) – these written procedures are critical for students to understand notification, who monitors, how FA is notified of failure of SAP, and the steps for FA Warnings and Probation;

  5. Packaging Students – this section should include your packaging philosophies and procedures (awarding policies for campus based programs, should be noted in the respective program’s procedures);

  6. Federal Supplemental Education Opportunity Grant (FSEOG) – awarding policy should have written procedures regarding the eligibility, selection procedures, and criteria for determining the award amount;

  7. Federal Work Study (FSW) – this section should include the application process, availability of Community Service, Off Campus employment opportunities, payroll and federal share;

  8. Perkins Loan* - the awarding policy should be outlined including eligibility requirements, selection procedures, and criteria for determining award amounts;

  9. Direct Loans – your policies and procedures should include how loan awards are determined, how you ensure the student has not exceed the 150% subsidized loan limit, type of confirmation process utilized, process for entrance and exit counseling and disbursement notification letters how and when provided;

  10. Teach Grant – procedures for verifying enrollment in eligible program, verification of required GPA at time of disbursement, performing any additional entrance counseling and providing exit counseling;

  11. Student Account – how the posting of disbursements to the student account is handled, process for handling credit balances, processing refunds and returns, and reconciliation of the student ledger records related to COD;

  12. Leave of Absence (LOA) – colleges are required to have a written policy and procedures for LOA’s which must stipulate that all requests must be made in writing and include the reason for the request. The process for accepting and granting the LOA, who is responsible, how FA is notified for handling of pending disbursements and updating information in NSLDS;

  13. Withdrawals – this section must maintain the college’s refund policies, including Return to Title IV (R2T4), procedure a student must follow to withdraw, the process of handling the sharing of this information between all departments, process for issuing and tracking Post Withdrawal Disbursements (PWD), and updating NSLDS;

  14. NSLDS – must include the process for receiving, reviewing and completing the NSLDS rosters, how to handle enrollment changes between rosters, how and who handles Transfer Student Monitoring reporting, and the process for reviewing NSLDS History on students with the effect of prior funding on current eligibility; and

  15. There are some miscellaneous items that should be documented in your policies and procedures:

    • Academic Year Definition for your programs;
    • If you have programs subject to clock to credit conversion, you should document how the calculation was performed to determine financial aid credits;
    • Cost of Attendance used each award year;
    • Procedures for annual distribution of consumer information;
    • Procedures related to Gainful Employment (GE) reporting and disclosures;
    • Job descriptions of Financial Aid employees; and
    • Personally Identifiable Information (PII) Security including reporting procedures for a data breach.

Remember as you update these policies and procedures annually, always retain the date of changes/revisions. The requirements may vary from award year to award year and you need to ensure your college is protected. The method used to create your policy and procedure manual is a personal choice for your college.

For additional information you should refer to the Federal Student Aid Handbook, Volume 2 School Eligibility and Operations and IFAP has a Guide to Creating a Policy and Procedure Manual that may be helpful in getting you started.

*Note: The Perkins Programs has ended; however, colleges are permitted to deliver subsequent disbursements of an existing Perkins Loan under certain circumstances. No additional disbursements are allowed after June 30, 2018. The college should still document some of the policies and procedures listed above since these are applicable to record-keeping timeframes. In addition, some of the policies and procedures such as loan serving and exit counseling remain in effect even though the new Perkins Loans are not being awarded.