Avoid the Snafus of Student Financial Aid Regulations
Originally published on July 22, 2019
Updated on August 16th, 2022
It’s no secret that the regulatory framework surrounding student financial aid can be one of the most difficult to navigate. As a result, many institutions could have unaddressed compliance issues despite their financial personnel’s best efforts to follow regulations—and they might not learn about it until their single audit is performed.
The U.S. Department of Education has identified a list of its top audit and program review findings regarding student financial aid. They include:
- Repeat finding – failure to take corrective action
- NSLDS Roster Reporting – Inaccurate/Untimely Reporting
- R2T4 Calculation Errors
- R2T4 Made Late
- Verification Violations
- Over/Underpayment of Pell Grant
- Student Credit Balance Deficiencies
- Entrance/Exit Counseling Deficiencies
- Qualified Auditor’s Opinion Cited in Audit
- G5 Expenditures Untimely/Incorrectly Reported
There are several steps you can take to prevent or fix these audit findings.
Create a policies and procedures manual. This seems simple, but having a strong policies and procedures manual can alleviate reviewer concerns as to whether an institution is consistently and appropriately following the regulatory framework.
Communicate. Student financial aid findings are often not the fault of any one department within the student services segment of an institution. Some of the most troublesome areas are those that require solid interdepartmental communication to ensure all regulatory requirements are being met.
When multiple departments are not effectively communicating, issues can only become compounded. We call this silo management, and breaking down these silos is an important part of ensuring organizational effectiveness.
Many institutions find that grouping student services like the offices of the registrar, bursar, and student financial aid together in a geographically central area can reduce the natural tendency of these silos to form. This in turn creates an environment of success for both the institution and its students.
Attend trainings. The National Association of Student Financial Aid Administrators (NASFAA) offers in-person and online trainings to provide financial aid professionals the resources and education opportunities necessary to implement these regulatory requirements.
Self-assess. Federal Student Aid (FSA) offers a library of FSA assessments to determine if your institution is in compliance with federal regulations. Additionally, student financial aid offices can perform their own audits of student records or the application of specific regulatory items like NSLDS reporting. By picking a small group of records to thoroughly examine, the institution can better identify issues and develop a plan to remedy them before they’re found in a single audit or program review.
Ask for help. There is no shame in asking for assistance in applying complex federal regulations or developing effective strategies and processes. Remember, this is to ensure that your institution is in compliance with federal regulations; it’s better to ask than assume.
At James Moore, our higher education CPAs keep up to date on the latest federal regulations regarding student financial aid. We’re passionate about helping you make sense of these regulations, so you can rest assured that you’re in compliance.
All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.
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