For officials in the University’s Office of Financial Aid, the legal challenges associated with handling federal grant money have become increasingly burdensome in recent years.
Enforcing regulations under a Title IV loan — a government loan subject to federal rules and proration standards, which dictate that students may not receive their full amount of federal aid if they do not attend an institution for the entire academic year — are particularly cumbersome for the University, according to Pamela Fowler, executive director of the University’s Office of Financial Aid.
The University, along with a number of other schools around the country, acted as an experimental site for the efficiency of the regulation, meaning that since 1992, the University has not been subject to the regulation, according to Fowler. The experiment’s term expired this year and the University must now enforce the Title IV regulation, which requires students to complete their degrees more quickly, according to Fowler.
The policies laid out in Title IV say that students must continue to earn their grants by remaining enrolled and completing the necessary amount of credit hours each year. A student can either be officially withdrawn from the University through ceased enrollment, or unofficially withdrawn by failing a class, Fowler said. While students who officially withdraw must return their grant money, students who withdraw unofficially are only forced to repay the grant in some cases.
Fowler said the process of regulating loan proration is challenging for students who graduate a term early, since it prevents them from receiving their full potential grant or loan money.
“There comes a point in time, especially when you’re borrowing money and taking the taxpayers’ money, that the goal here is to get a degree, and you should get that as quickly and efficiently as possible,” Fowler said.
Fowler said the process of determining the cause of an unofficial withdrawal often results in disputes over grant money, particularly challenging when dealing with the approximately 10,000 University students who have federal loans or grants.
“I have to go through every single term and get a list of all the students that have an ‘F,’ and determine if that student just walked away from their classes or if that student really earned the ‘F,’” Fowler said.
She said one of the reasons issues over dispersing grant money arises is due to the universality of the regulations.
“(The loan and grant regulations) don’t always apply to everybody, but everybody has to follow the same rules and regulations,” Fowler said.
Beyond resistance at the university level, the advisory committee on Student Financial Assistance — an independent organization that provides information to Congress on student aid related issues — filed a report on Dec. 7 that reviewed regulations for dispensing federal loans and grants to college students, giving particular scrutiny to Title IV loans.
Rich Williams, higher education advocate for the U.S. Public Interest Research Group, said the regulations are in place to provide security for the federal money that is allocated to higher education.
“(The regulations are) wide-ranging and cover various issues to prevent fraud and the integrity of the financial aid program for students,” Williams said.
Williams said the advisory committee on Student Financial Assistance is currently reviewing the regulations and recognizes their ineffectiveness for certain higher-education situations.
“Maybe some (regulations) are needed less than others,” Williams said. “The committee is taking a look at what those could be and finding a way to streamline them.”
In addition to ensuring that grant and loan money is being used efficiently, Christine Lindstrom, director of the Higher Education Debt Project, said student welfare is also a primary concern in constructing federal regulations.
“(We) view student loans and regulation through the lens of what’s best for the student borrower,” Lindstrom said.” … Will it protect the student loan borrower? That’s how we define our advocacy.”