Financial Student Aid Regulation Changes: Breaking Down 5 More Rules

By Parker Charlton | September 27, 2021

If you’ve been following along with the McClintock Minute, you know we’ve been breaking down the many notable changes and updates that the Department of Education (ED) made effective this summer to Financial Student Aid (FSA) regulations. As we start the fall, however, we know institutions, understandably, still have questions on many topics — and we have answers.

Read on for information on five key topics.

SAP Flexibilities

There are two significant SAP flexibilities established through the new rules:

  • Pace (quantitative) reviews are no longer required from subscription-based, non-term and clock-hour programs.

For students in subscription-based programs, their coursework, based on a specified number of credit hours, is not required to begin or end within the timeframe of a given term. However, the student cannot receive a subsequent disbursement until the credit hours associated with their enrollment status in all prior payment periods is complete, and the student will not continue to receive Title IV aid without progressing.

Students in non-term credit-hour and clock-hour programs, meanwhile, will not receive subsequent disbursement until half the hours and weeks in the academic year are successfully completed.

  • Institutions now have the option to calculate the maximum timeframe (MTF) for credit-hour programs by credit hours, as they were already doing, or by calendar time. Whichever method an institution chooses, the same measurement must be used for all students in the same program and cannot be switched. If calendar time is used, it’s important to note that the method does not account for individual student enrollment status changes and the institution must address how not attending a payment period within a program impacts MTF.

Subscription-Based Programs

ED will begin to allow Competency Based Education (CBE) programs to be subscription-based, because the current options (non-term or term-based) are complicated and difficult for institutions to use with CBE programs. This method is clearer, letting institutions to treat a subscription period as a payment period, requiring students to complete certain competencies in past subscription periods in order to receive future Title IV funds, and offering flexibility to the current rules for all self-paced programs.

Distance Education

ED updated some term definitions for distance education programs. These are two of the most important updates:

  • Substantive Interaction: This is defined as “engaging students in teaching, learning and assessment, consistent with the content under discussion and including two of the following”:
  1. Providing direct instruction
  2. Assessing or providing feedback on a student’s coursework
  3. Providing information or responding to questions about the content of a course or competency
  4. Facilitating a group discussion regarding the content of a course or competency
  5. Other instructional activities approved by the institution’s or program’s accrediting agency
  • Regular Interaction: Ensure regular interaction between a student and an instructor or instructors. Do this by providing the opportunity for substantive interactions (see above) with the student on a predictable and regular basis commensurate with the length of time and amount of content in the course or competency (and prior to the completion of the course or competency). Also, monitor the student’s academic engagement (see below) and success, and ensure an instructor is responsible for proactively engaging in substantive interaction with the student when needed or requested by the student.

Academic Engagement

ED provided a definition for “academic engagement,” which is “active participation by a student in an instructional activity related to student’s course of study that is defined by the institution in accordance with any applicable requirements.” Engagement includes, but is not limited to, activities such as attending a class or lecture, submitting an assignment, taking an assessment and other types of participation or interaction with instructors. Find the full definition, as well as activities that are not considered academic engagement, here.

Reporting R2T4 Exemption Students

Lastly, we have reminder for an R2T4 exemption guidance: Students are treated as having completed a term when they meet the conditions for an exemption from treatment as a withdrawal. Therefore, if a student does not complete a term but does meet one of the R2T4 exemptions (half-time or 49%, for example), the student’s withdrawal date should be listed in NSLDS as the end of the term, regardless of their last date of attendance.  Learn more here, under ER-Q1 and ER-A1.

Even months after they went into effect, the latest round of FSA changes continues to stir up questions, and the answers can be rather nuanced. That’s why we’re here to help institutions navigate their way to answers and avoid missteps. For a deeper dive into these topics and more, please reach out to us to schedule a chat.

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