1. Title IV Administration for Clock-Hour Programs MAFAA 2012 Spring Conference

2. Topics Title IV foundations Federal Pell Grant information Direct Loan information R2T4 2

3. Title IV Foundations for Clock Hour Programs 3

4. Academic Year Must be defined by school using statutory guidelines for each academic program –Must use that definition for all students in the same program –Must use that definition for all Title IV purposes Program length may be longer or shorter than the definition of an academic year Does not always correspond to a school’s scheduled academic calendar 4

5. Academic Year Academic year is used to: –Determine payment periods –Prorate Direct Stafford Loans –Determine eligibility for second scheduled Pell awards Sometimes confused with: –Grade level classification, often set by Registrar –Award year defined by ED 5

6. Clock Hour Academic Year Statutory minimum definition for programs that measure progress in clock hours –900 clock hours –26 weeks of instructional time –A week is a 7-day period in which there is at least one day of instruction or exams –Need not correspond to a calendar week 6

7. Academic Year Examples 1050 clock hour, 35 week program –Some academic year options 900 clock hours, 26 weeks 900 clock hours, 30 weeks 1050 clock hours, 35 weeks 2000 clock hour, 80 week program –Some academic year options 900 clock hours, 26 weeks 900 clock hours, 36 weeks 1000 clock hours, 40 weeks 7

8. Clock Hour Enrollment Status Minimum full-time standard for undergraduate clock-hour programs is 24 clock hours per week –A student attending 24 hours per week will complete 900 hours in 37.5 weeks –If attending 30 hours per week, will complete 900 hours in 30 weeks –If attending 35 hours per week, will complete 900 hours in 26 weeks Half-time is half of full-time (minimum 12 hours) 8

9. Payment Period The academic year is divided into payment periods Payment periods used for: –Pell Grant calculations and disbursements –Direct Loan disbursements Calculation of payment periods varies based on the published length of the program A change in award years does not change the defined payment periods 9

10. Payment Period For clock-hour programs, the payment period is defined not only in clock hours, but also in weeks of instructional time A student must successfully complete the clock hours AND weeks of instructional time in a payment period to progress to the next payment period 10

11. Payment Period – Programs of One Academic Year or Less The program is divided into two equal payment periods –CANNOT have more than two payment periods in an academic year –1st payment period is the period of time when the student completes half the number of clock hours and half the weeks of instructional time in the program –2nd payment period is the period of time in which the student successfully completes the remainder of the program 11

12. Payment Period Example Programs of one academic year in length Medical Assistant program is 900 clock hours with 36 weeks of instructional time – Academic year is 900 clock hours and 36 weeks 1 st payment period = Clock hours 1-450 and 18 weeks elapse 2 nd payment period = Remainder of program – clock hours 451-900 and remaining 18 weeks 12

13. Payment Period – Program Greater Than One Academic Year For the first academic year and any full academic year after that: –First payment period is the period of time when the student completes half the number of clock hours and half the weeks of instructional time in the academic year –Second payment period is the period of time in which the student successfully completes the remainder of the academic year 13

14. Payment Period – Program Greater Than One Academic Year Example – Nursing program is 1800 hours and 52 weeks, academic year definition is 900 clock hours and 26 weeks –First academic year 1 st payment period = 450 clock hours & 13 weeks 2 nd payment period = 450 clock hours & 13 weeks –Second academic year 1 st payment period = 450 clock hours & 13 weeks 2 nd payment period = 450 clock hours & 13 weeks 14

15. Payment Period – Program Greater Than One Academic Year If the remainder of a program than is more than half an academic year but less than a full academic year in length –3 rd payment period is half the clock hours and half the weeks of instructional time remaining in the program –4 th payment period is the time necessary to complete the remainder of the program 15

16. 16 Payment Period Example Cosmetology Program 1500 clock hours and 48 weeks Academic year is 900 clock hours and 26 weeks Year 1: 450 hours/13 weeks and 450 hours/13 weeks Year 2: 300 hours/11 weeks and 300 hours/11 weeks

17. Payment Period – Program Greater Than One Academic Year If the remainder of a program than is less than half an academic year –3 rd payment period is the remainder of the academic program 17

18. Payment Period Example Automotive Technology Program 1330 clock hours and 38 weeks Academic year is 900 clock hours and 26 weeks 1 st payment period – hours 1-450 and 13 weeks elapse 2 nd payment period – hours 451-900 and 26 weeks elapse 3 rd payment period – remainder of program – hours 901 to 1330 and remainder of weeks 18

19. 19 Payment Period Disbursements At least one disbursement must be made in each payment period The full amount due the student for a payment period should be disbursed to the student before the end of the payment period Disbursements must be made to best meet the needs of the student –Institution may not have a practice of delaying disbursement beyond the 60% point in time to avoid R2T4 calculation

20. TERM 20 Clock Hours and Terms How does this work with your term structures? –Rule 1—Ignore the fact that you have terms!! –Rule 2—Terms do not apply!! –Rule 3—Regardless of terms, track progression to the next payment period using clock hours and weeks of instruction, not terms!

21. Federal Pell Grant Calculations and Requirements 21

22. Annual/Scheduled Pell Award The maximum amount a student would receive during a full academic year for a given enrollment status, EFC and COA The annual award for a student in a clock-hour program is taken from the full-time payment schedule, even if the student is attending less than full-time –Thus, the annual award will always equal the scheduled award 22

23. 23 Pell Calculation for Payment Period Formula 4 Scheduled Award times THE LESSER OF: Number of clock hours in the payment period Number of clock hours in program’s academic year or Number of weeks of instructional time in the payment period Number of weeks of instructional time in program’s academic year

24. Pell Calculation Example 1 Program less than one academic year –650 clock hour, 18 week program –Academic year defined as 900 clock hours, 26 weeks –Payment periods defined as 325 clock hours and 9 weeks –Take lesser of 325/900 =.361 or 9/26 =.346 times the annual award $5,000 X 9/26 = $1,730.77 24

25. 25 Pell Calculation Example 2 $4,000 X 450 or 13 = $2,000 900 26 First Academic Year 1500 clock hour program over 48 weeks Academic year definition – 900 clock hours and 26 weeks

26. 26 Pell Calculation Example 2 $4,000 X 11 or 300 = 26 900 Second Academic Year $1,333.33 11/26 =.423 270/900 =.333

27. Title IV Disbursements An institution makes a disbursement of Title IV program funds on the date that the institution credits a student’s account at the school or pays the student directly with – –Funds received from the Department –Institutional funds used in advance of receiving funds from the Department 27

28. Disbursing by Payment Period Student must successfully complete the required clock hours and weeks in a payment period before receiving disbursements for a subsequent payment period Excused absences may be included when determining clock hours completed under certain circumstances 28

29. Excused Absences Absences must be ones that the student does not have to make up School must have written policy that permits excused absences Number of excused absences may not exceed the lesser of: –Allowed excused absences per accrediting agency or state authorizing agency –10% of the clock hours in the payment period 29

30. Disbursement Reporting to COD Report the actual disbursement date and amount –Report as early as 7 days before actual (true) date of disbursement –Report no later than 30 days of crediting the student’s account Direct Loans – interest begins to accrue on the actual disbursement date reported by the school 30

31. Federal Direct Loan Information 31

32. Determining Loan Periods Loan period may be the same as the period of enrollment for programs one academic year in length or less –Loan periods may cross award years Loans must be disbursed equally by payment period –The loan period determines the payment periods 32

33. Determining Loan Periods Maximum loan period –Generally school’s academic year. –Can be the length of program if program longer than an academic year (for example, program 900 hours over 40 weeks and academic year is 26 weeks) Minimum loan period – the lesser of: –The academic year, the student’s program, OR –The remaining portion of the program, OR –The remaining portion of an academic year 33

34. 34 Monitoring Annual Loan Limits Borrower-based Academic Year (BBAY) –Must be used for clock-hour and nonterm programs and –May be used by term-based credit hour programs –Moves with student’s attendance and progression in program –Student becomes eligible for new annual loan limit after successful completion of clock hours AND weeks in academic year

35. Prorating Annual Loan Limits Student enrolled in program less than an academic year in length Student enrolled in program that is longer than an academic year and is in a final period of study that is less than an academic year 35

36. Prorating Annual Loan Limits Program less than an academic year Use lesser of: Weeks enrolled Weeks in AY or Hours enrolled Hours in AY Final period less than an academic year Use: Hours enrolled Hours in AY 36

37. 37 BBAY – Clock-Hour Program 1200 Clock-Hour/32 Week Program 900 Clock-Hour/26 Week Academic Year 450 hrs/13 wks 1st BBAY $5,500 annual loan limit *You must prorate annual loan limit for final period less than an academic year $4,500 x 300 / 900 = $1,500 Sub $2,000 x 300 / 900 = $667 Unsub 300 hrs/6 wks 2nd BBAY $6,500 annual loan limit*

38. Frequency of Annual Loan Limits Example Program is 1800 clock hour over 72 weeks Academic year is defined as 900 clock hours and 36 weeks Student completes 900 hours in 30 weeks Student not eligible for new annual loan limit until 36 weeks have elapsed –Student will have completed 1100 hours then Second loan prorated –700/900 X $4,500 = $3,500 38

39. Transfer and Program Change Transfers in with accepted clock hours and has overlapping loan period from prior school –New loan period is remaining portion of prior school’s academic year –Eligible for remaining amount of annual loan limit Student completes program and begins new programs at same school during academic year –New loan may be originated for remainder of academic year in first program 39

40. Return to Title IV Funds 40

41. Attendance Under the new regulations, schools that are required to measure the clock hours that a student completes in a program are considered to be institutions that are required to take attendance for R2T4 purposes –See preamble page 66898 of October 29, 2010 Federal Register 41

42. Required to Take Attendance Last date of attendance must be withdrawal date Date of determination of withdrawal cannot be more than 14 calendar days after withdrawal date 42

43. Re-entry/Transfer Within 180 Days If withdrawn student re-enters same program of study within 180 days, or transfers into new program at any time and at least some hours transfer in –Student begins new payment period upon re-entry or transfer –Remaining portion of program treated as length of entire program for awarding Title IV funds 43

44. Transfer Into New Program If a student transfers into a new program at the same school she can be considered in the same payment period if: –Continually enrolled –Coursework transferring out of is substantially similar to coursework in new program –Payment periods are substantially equal in clock hours and weeks –Little or no changes to institutional charges for payment period –Clock hours transfer 44

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