On Oct. 31, 2023, the Department of Education (ED) unveiled new regulations that will affect all institutions participating in Title IV programs. These regulations, which will go into effect July 1, 2024, cover financial responsibility, administrative capability, certification procedures and ability-to-benefit programs.

Key Changes

• Financial Responsibility Requirements: Institutions will face new mandatory and discretionary triggers that may require them to provide a letter of credit to the ED.
• Financial Obligations: Institutions must now meet new requirements to demonstrate their ability to fulfill financial obligations.
• Submission Timelines: There are new timelines for submitting notifications and audits to the ED.

To assist institutions in understanding and implementing these regulations, the ED's Federal Student Aid (FSA) office has released a comprehensive document titled “Financial Responsibility - Questions and Answers.” This FAQ provides detailed guidance on the new regulations and addresses key concerns such as:

• Fiscal Year Alignment: How institutions should align their fiscal year with the year used for IRS tax returns.
• Related Party Disclosures: Requirements for disclosing information about related parties.
• Applicability to Public Institutions: Clarification on which aspects of the regulations apply to public institutions.

These changes are part of a broader effort by the ED to ensure financial stability and integrity within Title IV participating institutions, ultimately protecting students and taxpayer funds. Institutions are encouraged to review the FAQ document thoroughly to ensure compliance and to prepare for the upcoming changes.

Connect With Us

If you have questions or concerns about the new requirements, please connect with one of our higher education financial professionals.

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