BeautyLink - Volume 6, Issue 2 - (Page 29)

AND THEN THERE'S COMPLIANCE Between a Rock and a Hard Place SOME SAYINGS LAST the "Schools are not allowed to charge students who receive federal student assistance a different tuition than those who do not receive aid." D. SHERWIN HIBBETS Learn More test of time. One adage we have all heard, and perhaps experienced, is "between a rock and a hard place." No one likes to be there! Yet, there are times when that is the way it feels working with the day-to-day nuances of Title IV Federal Student Aid programs. A way to avoid too great of a pressure between those rocks and hard places is to stay vigilant on some of the seemingly small details related to financial aid. Exercising diligence in this way will assist in keeping some small rocks from turning into crushing boulders. A reality for a large majority of students is that they must take out student loans as a means to meet educational costs. Naturally, any school wants to assist its students in the process of obtaining necessary funds. However, the aim to be of assistance may conflict with the desire to try to help the student avoid unmanageable debt levels, as well as the school's efforts toward realizing a low Cohort Default Rate (CDR). A common observation is that in attempting to meet both sides of this position, schools become pressed in packaging financial aid for the students. That is, often schools will limit the students' borrowing to direct educational costs, or said differently, they will award just enough aid to make certain the school's charges are met. Perhaps the rationale for this is that indeed the school nobly desires to help the student avoid unmanageable levels of debt. Whatever the impetus for this method of packaging financial aid, the school is putting itself in position to feel the weight of a rock or the pressure of a hard place. Read that to mean the school is opening itself up to a finding in an audit or a program review. The U.S. Department of Education (ED) has made clear the fact that schools may not simply choose to limit students' ability to borrow no more than the amount needed for direct school charges. Students must be allowed to opt for the maximum Title IV loan funds available if otherwise eligible, i.e., Title IV cost of attendance less expected family contribution and estimated financial assistance shows need, etc. (This statement does not negate a school's ability to approve a lesser amount on a case-by-case basis with the reason provided in writing to the borrower.) Schools that have made a practice of limiting student borrowing to only cover direct school charges should implement a change that ensures students are aware of, and have opportunity to request, all Title IV funds to which they are eligible. However, schools may elect to counsel students on the merits of avoiding loans or choosing to reduce the amount they actually borrow, even if awarded a higher amount. Another potential area for feeling the crush of being in a hard place is if a school charges a different rate of tuition or fees should a student pay in cash rather than using financial aid. This may not be as common of a situation, but it has been noted that some schools have attempted to offer discounts to students if they pay their tuition in full before the start of school, or if they pay by means other than federal student aid. Schools are not allowed to charge students who receive federal student assistance a different tuition than those who do not receive aid. A discount would, in essence, be requiring a different charge for the same service. It must be noted, though, that this restriction does not extend to the provision that allows for charging different categories of students different tuition The courses FA110 - Developing an Efficient Financial Aid Office, FA210 - Application Process: Verification, C-Codes and PJ and CM101 - Internal Audits - Building a Compliant Campus are available on the AACS Online Training Center. Members call AACS at 800-831-1086 for your VIP Discount Code. Visit the following URLs to learn more about these courses:, and B E AUT YL I NK | BA L* A N C E | 2 0 1 4 | 29

Table of Contents for the Digital Edition of BeautyLink - Volume 6, Issue 2

Message From the Aacs President & Cea Chair
The Workings of Washington
Creating a Recipe for the Future
Voices From the Trenches
Creating Harmony in the Classroom
Living an Integrated Life
A Student’s Perspective
And Then There’s Compliance
This Hairstylist Is on Fire!
Keeping the Enrollment Funnel Flowing
Beauty Changes Lives
Significant Changes
Battle of the Strands
Cyber Liability and Data Security
Superstar Graduate
Plagued by More Delays
Voices From the Classroom
Launching a Blow Out Career
People & Places
New Products & Services
Associate Member Profiles: Distributors
New School Members
Upcoming 2014-15 Events
Index to Advertisers

BeautyLink - Volume 6, Issue 2