With the release of the 2024 Compliance Supplement from the Office of Management and Budget (Supplement), there are changes to the Student Financial Assistance (SFA) Cluster that may impact institutions of higher education.
Though not a complete list, the following are some of the key changes from the 2023 supplement to the 2024 supplement for the SFA cluster.
Matrix of Compliance Requirements
The supplement lists the 12 compliance requirements for audits and which requirements relate to the SFA cluster. In the 2024 supplement, the requirement of activities allowed or unallowed is only relevant to Health and Human Services (HHS) programs within the SFA cluster and not Department of Education (ED) programs. This may result in changes to audit procedures for Institutions that only have ED programs, but the requirement remains unchanged for HHS programs such as 93.364 Nursing Student Loans (NSL) and 93.342 Health Professions Student Loans (HPSL).
If your institution has HHS programs 93.364 and 93.342 noted above, the 2024 supplement increased loan limits by 4.277% per year until 2030. The current limit of NSL loans to a student for an academic year may not exceed $5,460, except that for each of the final two academic years of the program, the total must not exceed $8,588, and total NSL loans may not exceed $26,928. These limits will increase by 4.277% until 2030.
Institutional Eligibility
The 2024 supplement has reorganized requirements relating to institutional eligibility and states an institution is not eligible under 34 CFR 600.7(a)(1) if in the latest complete award year:
- More than 50% of the institution’s courses were correspondence courses;
- 50% or more of enrolled students were enrolled in correspondence courses;
- More than 25% of enrolled students were incarcerated; or
- More than 50% of enrolled students had neither a high school diploma nor the recognized equivalent and the institution does not provide a four-year or two-year program that awards a bachelor’s or associate degree.
A course offered through correspondence is a course in which the institution provides instructional materials, by mail or electronic transmission, including examinations on the materials, to students who are separated from the instructors. Interaction between instructors and students in a correspondence course is limited, is not regular and substantive, and is primarily initiated by the student.
Institutions are not required to report this information to the ED, but must maintain documentation of their compliance with the requirements. The regulations require an annual attestation on compliance with these institutional eligibility requirements. The ED’s regulations describe the auditor’s substantiation of these calculations, and reporting thereon, as an attestation performed in accordance with the American Institute of Certified Public Accountant’s Statement on Standards for Attestation Engagements. However, the ED does accept coverage of these calculations through an institution’s annual Title IV compliance audit or single audit submission. If you are part of an institution that offers correspondence courses, consult the 2024 compliance supplement, and with your auditor, for more details on the above calculations.
Special Tests and Provisions
As part of the Special Tests and Provisions regarding disbursements to students, a new requirement recommends auditors test to determine whether the institution’s policies and procedures provide for determining a student’s eligibility at the time of disbursement. This may be a new question from auditors that will need verification, and institutions should review their documented policies to ensure eligibility is being determined before making disbursements.
These are just some of the changes that may have a more noticeable impact on your single audits that fall under the regulations of the 2024 compliance supplement. We will continue to assess and track the developments related to the Student Financial Assistance Cluster. Reach out to a Schneider Downs Audit and Assurance team member if you have questions.
About Schneider Downs Higher Education Services
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