August 2008

Compliance Questions & Answers

Compliance Q&As

This portion of the MDHE Digest includes questions and answers about topics that our Missouri financial aid officers bring to our attention.

If you have a regulatory or policy question for the MDHE, contact your MDHE client service representative, Dan Day, or the MDHE at info@dhe.mo.gov.

Question #1

What are a school's options if a student's Stafford Loans for the 2008-09 academic year has already been packaged using the prior loan limits?

Answer

According to ECASLA, schools can either provide notification to the student that he or she may be eligible for increased amounts of unsubsidized loans or re-package an eligible student's loan amounts with the additional unsubsidized loan amount that will be disbursed on or after July 1, 2008.

Citation:
Dear Colleague Letter GEN 08-08 dated June 18, 2008

Question #2

Do students that are home schooled qualify for Title IV assistance in Missouri?

Answer

Students who receive a secondary education in Missouri home school settings qualify for Title IV assistance by virtue of their exception from Missouri's truancy laws. Missouri does not provide a credential for secondary home school completion, which is the alternative means of establishing Title IV eligibility.

Based on the interaction between these citations (CFR 668.32(e)(4)(ii), Missouri Revised Statutes 167.031 and 167.042), students home schooled in Missouri qualify for Title IV assistance by virtue of their exception from Missouri's truancy laws. Missouri does not provide a state certification for home schooled students, which is the alternative means of establishing eligibility per CFR 668.32 (e)(4)(i).

Question #3

Can a student provide a letter to an institution giving them permission to use their current financial aid to pay for a prior year balance if it's over $1500?

Answer

No. As stated in the 2008-2009 FSA Handbook, in general FSA Funds may only be used to pay for the students? costs for the period for which the funds are provided. However, a school may use up to $200 of current year funds for prior year charges for tuition and fees, room, or board (and with permission, educationally related charges). In addition, the 11/01/07 regulations removed the exception that allowed an institution to pay for more prior year charges under certain circumstances. Effective July 1, 2008, a school may not pay prior year charges in excess of $200 (without exception).

Citations:
FSA Handbook 08-09, pages 4-29
Federal Register 11/01/2007, Federal Student Aid Programs Final Rule (Sec. 668.164(d))