Marcia Fediw, Jamal Steward, Eric Miles, Thomas Killiam, and Michael Stein

Department of Education: Overview from

the Foreign Schools Team

International Education Council

2015 Student Loan Conference

and Workshop

Agenda

• Welcome and Introductions

• U.S. Department of Education (ED) Structure and Roles

and Foreign School Participation Data

• SAIG Enrollment Procedures

• Compliance Audits

• Audited Financial Statements

• Method of Payment

• Recent Developments and Reminders

2

U.S. Department of Education

3

Federal Student Aid

4

An OFFICE of the U.S. DEPARTMENT of EDUCATION

• Chief Operating Officer (James Runcie) appointed by

President of the United States

• Policy Liaison

• Technology

• Finance

• Performance Management

• Customer Experience

• Risk Management

• Administrative Services

• Acquisitions

• Business Operations

• Federal Loan School

Support Team

• Training Officers

• Program Compliance

• Multi-regional and

Foreign School

Participation Division

Foreign School Participation Data

• 399 Institutions

• 38 Countries

• 23,296 Students

• $1 Billion

annually

• Foreign CDRs

(Sector rates)

• FY2011 (3-yr): 3.8%

• FY2010 (3-yr): 4.6%

• FY2009 (3-yr): 7.3%

Institutional and Program Eligibility

Primary Application Types:

• Initial Certification

• Recertification

• Reinstatement

• Eligibility Only

• Voluntary Withdrawal

• Updates

• Mergers

• Change in Ownership

6

Institutional and Program Eligibility

Documents Required and Reviewed

• Legal Authorization & Degree Granting Authority

• Public, Private Non-Profit or For-Profit

• Academic Catalog, Programs & Locations, Partnerships

• School Policies:

• Admissions, Refund Policy, SAP, R2T4

• Special requirements and documents for Medical,

Veterinary, and Nursing Programs

7

Student Aid Internet Gateway (SAIG)

• SAIG allows authorized entities to exchange data electronically

with the Department

• Organizations enroll individuals as Destination Point

Administrators (DPAs) in the SAIG

• DPAs are assigned Destination Points (TG

numbers/mailboxes) that receive and transmit data for various

Title IV student aid program systems

• Each entity must designate one individual as its Primary DPA

8

SAIG Enrollment ProceduresRequired Electronic Processes [34 CFR 668.16(o)]

To be in compliance a school must:

• Enroll in SAIG

• Use FAA Access or its SAIG mailbox to exchange FAFSA or

ISIR data with the Department’s Central Processing System

(CPS)

• Use the Common Origination and Disbursement (COD) website

or its SAIG mailbox to exchange award and disbursement data

for Direct Loans, and

• Submit to the National Student Loan Data System (NSLDS)

student enrollment records, and NSLDS transfer student

monitoring records

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There are different batch and Web services available to ED-

approved foreign institutions:

• Central Processing System (CPS)

• Free Application for Federal Student Aid (FAFSA) data, including

corrections, can be entered and submitted over the SAIG

• National Student Loan Data System (NSLDS)

• NSLDS is a national database that collects and maintains individual

student data for all Title IV, HEA student loan borrowers and grant

recipients

• Common Origination and Disbursement (COD) System

• COD enables Direct Loan origination, disbursement, and other required

reporting information to be exchanged electronically through the SAIG

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Batch and Web Services

FSA provides three software products to facilitate electronic data

exchange:

• EDconnect• A Windows-based file transfer protocol program that enables

users to send and receive FSA information electronically

• EDExpress• A financial aid management software package schools use to

manage Title IV student financial aid application data, package

awards, and exchange origination and disbursement data with

COD

• SAIG Web Portal• Used by DPAs to manage mailboxes, view data transmissions

history, restore files, and change SAIG passwords

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FSA Software

SAIG Enrollment Form

• Foreign schools must complete a paper SAIG enrollment form,

which is available on the Foreign Schools Information Page

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SAIG Enrollment Form

• Enrollment actions available:

• Designating a Primary DPA With All Services (Required)

• Designating a Non-Primary DPA

• All Online Services (COD, FAA Access to CPS, NSLDS)

• COD Online and NSLDS Online

• COD Online Only

• NSLDS Online Only

• Adding/Modifying Services for an Existing DPA

• Updating/Changing an Existing DPA*

• Designating an Institutional Third-Party Servicer DPA

Note: *Currently, to update/change an existing DPA, e-mail

FSA.foreign.schools.team@ed.gov for further guidance.

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SAIG Enrollment FormEnrollment forms are broken down into four Steps:

• Step One – Collects information about your school and the DPA you

want to enroll.

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Information Needed to Complete

Step One:

• Item 1: TG Number/Mailbox of

Primary DPA or DPA who’s

information is being changed

• Item 2: Name of Organization

• Item 3: Demographic details of

designated DPA.

SAIG Enrollment Form

• Step Two – Adds the appropriate services for the school and the DPA

identified in Step One.

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Information Needed to Complete

Step Two:

• Items 5 through 14:

• Eight-digit OPEID number

• Federal School Code

number

• Direct Loan School Code

number

• Name of Organization

SAIG Enrollment Form

• Step Three – Collects the required agreements and signature pages

from the Primary DPA (and if applicable, the Non-Primary identified in

Step One).

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Information Needed to Complete

Step Three:

• The signature of the Primary

DPA (and if applicable, the Non-

Primary DPA identified in Step

One).

SAIG Enrollment Form

• Step Four – Collects the required authorization from the school’s

President/CEO or Designee to process the enrollment information for

the DPA identified in Step One.

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Information Needed to Complete

Step Four:

• The signature of the school’s

President/CEO or Designee

Two Factor Authentication

• All authorized users are required to enter two forms of

“authentication” to access FSA systems via the Internet:

• The first factor is something that an individual knows—his or her

User ID and password

• The second factor is something that an individual has—a token that

generates a One-Time Password (OTP)

• If an institution needs additional TFA tokens, the Primary DPA

should send an e-mail to TFA_Communications@ed.gov, and

include the school name and OPE ID on the correspondence

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Active Confirmation

• Active confirmation is the process of confirming access

needs of enrolled staff and deleting access that is no

longer required

• If active confirmation is not completed within the

prescribed timeframe, all services and access assigned

to the organization and individuals could be permanently

removed

• Every organization enrolled for a SAIG account must

review and validate its assigned TG numbers annually

19

Common Mistakes and Useful Links

• Common Mistakes to Avoid

• Submitting photocopies of SAIG enrollment form signature pages.

• Not designating a Non-Primary DPA to serve as a backup to the

Primary DPA.

• Password sharing and the sharing of system access.

• Useful Links for DPAs

• FAA Access to CPS Online – https://faaaccess.ed.gov

• NSLDS Online – https://www.nsldsfap.ed.gov

• COD – https://cod.ed.gov/cod/LoginPage

• FSA Software – https://www.fsadownload.ed.gov/

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Financial Statement Reporting

Title IV Funds Received During

Fiscal Year

Public & Private Non-Profit For-Profit

Home Country GAAP

U.S. GAAP & GAGAS

HomeCountry GAAP &

U.S. GAAP & GAGAS

$10,000,000 +Required annually, in English

Required annually, in English

Required annually, in English

$9,999,999- $3,000,000

Required annually, in English

Required annually, in English, may omit for 2consecutive years afterU.S. GAAP & GAGAS audit

$2,999,999- $500,000

Required annually, in English

Not Required

Less than $500,000Not required,except during Initial Certification

Not Required

NOTE: If a foreign institution has a financial condition or financial reporting problem, the Secretary may require the foreign institution to submit audited financial statements in a manner specified by the Secretary.

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Financial Analysis

• Assessment of institutional financial viability and health

using financial ratios that are weighted & combined into a

single composite score of financial responsibility

• Composite scores range from negative 1.0 through

positive 3.0. Less than 1.5 is a failing score, but some

schools may qualify for “zone” if score is at least 1.0

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Financial Analysis

• Other considerations

• Past performance (including timely submission of acceptable

compliance audits and audited financial statements)

• Going concern statements

• Qualified, Adverse, Disclaimed Auditor Opinions

• Failure to repay Title IV, HEA program liabilities owed to ED

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Financial Analysis

• In general, “No news is good news”

• For Currently Participating Institutions, if a problem:Zone Alternative

(Score 1.0 – 1.4, not exceed 3 consecutive years), Zone reporting requirements,

Restricted Method of Payment HCM1 & audit attestation.

Provisional Certification10% LOC (minimum), Provisional certification, Zone reporting requirements,

Restricted Method of Payment HCM1 or HCM2, audit attestation.

Letter of Credit only

50% LOC (minimum), can be considered financially responsible. No “Zone”

reporting, no Method of Payment restrictions, no audit attestation.

• New / Reinstatement Institutions

Letter of Credit only as above.

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Compliance AuditsTitle IV Funds

Received During Most Recent

Fiscal Year

Public & Private Non-Profit For-Profit

$500,000 +Standard Compliance Audit

Submit Annually

Standard Compliance

Audit

Submit Annually

Less than $500,000

Alternative Compliance Audit Submit Annually

Alternative Compliance Auditmay cover up to 3 fiscal years IF

• Receive < $500,000 in most recent FY period• Fully Certified• Has submitted timely acceptable compliance audits for two consecutive years and has no history of late submissions since then• Notified by ED

NOTE: If a foreign institution has an administrative capability or compliance reporting

problem, the Secretary may require the compliance audit to be performed at a higher level of engagement, and may require a compliance audit to be submitted annually.

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Compliance Audit Reporting

• Conducted by Certified Independent Auditor

• Due no later than six months after the end of the

institution’s fiscal year

• Alternative Compliance AuditInstitution received less than $500,000 in U.S. Dollars in Title IV, HEA Program Funds

• Standard Compliance AuditInstitution received more than $500,000 in U.S. Dollars in Title IV, HEA Program Funds

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Compliance Audit Reporting

• A Reminder Notice is e-mailed 60 days prior to the audit due date

• A Reminder Notice is e-mailed 30 days prior to the audit due date

• A Missing Compliance Audit letter is e-mailed if the audit has not been

submitted and accepted by the due date

• A Citation Letter is mailed, via courier, and electronic copies are e-mailed

to the institution

• Once cited, the institution will be placed on Heightened Cash Monitoring,

required to submit a Letter of Credit on a U.S. Bank for 5 years, and be

Provisionally certified

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Compliance Audit Reporting

Purpose of Compliance Audit Reporting

• Ensure an institution is taking corrective action to

administer Title IV programs correctly, and

• Ensure recipients have received all Title IV, HEA

programs funds they are entitled to receive, and

• Ensure ED is reimbursed for the cost of any errors in

program administration caused by the institution

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Compliance Audit Resolution

• Compliance Audit Resolution is a process that normally occurs

after an institution submits an acceptable compliance audit

report

• Compliance audits ensure that Title IV, HEA funds have been

expended correctly, but auditors may identify weaknesses and

errors in Title IV, HEA program administration

• Schools are expected to implement corrective action for each

finding of non-compliance to prevent recurrence

• Compliance audit reports containing more serious findings are

flagged for additional resolution by the Multi-Regional and

Foreign School Participation Division

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Compliance Audit Resolution

• Final Audit Determination Letter completes compliance audit

resolution process

• Letter may assess a monetary liability to recover

unauthorized costs incurred by ED or borrower due to

incorrect administration of Title IV, HEA programs. Liabilities

are not punitive and are not fines

• School may appeal liabilities, if any, if it has evidence to

indicate that the auditor’s finding was incorrect or if ED’s

determination was incorrect

• Letter provides payment instruction and appeal instruction, if

liabilities asserted

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Top Ten # of Foreign School Audit Findings FY 2014

Grouping Finding Code Description

Number

of

Findings

Percent

STUDENT CONFIRMATION REPORT FILED LATE/NOT FILED/NOT RETAINED FOR FIVE YEARS/INACCURATE 145 23.4%

STUDENT STATUS - INACCURATE/UNTIMELY REPORTING 76 12.3%

STUDENT CREDIT BALANCE DEFICIENCIES 68 11.0%

ENTRANCE/EXIT COUNSELING DEFICIENCIES 44 7.1%

RETURN OF TITLE IV FUNDS MADE LATE 43 6.9%

ATTENDANCE RECORDS MISSING/POLICY INADEQUATE 32 5.2%

INFORMATION IN STUDENT FILES MISSING/INCONSISTENT 30 4.8%

REPEAT FINDING - FAILURE TO TAKE CORRECTIVE ACTION 19 3.1%

INCORRECT CALCULATION OF EXPECTED FAMILY CONTRIBUTION AND/OR COST OF ATTENDANCE 18 2.9%

ENROLLMENT STATUS NOT VERIFIED BEFORE DISBURSEMENT 15 2.4%

490 79.0%

130 21.0%

620 100.0%

Total Top Ten Deficiencies

Top Ten

Deficiencies

Top Ten Foreign School Audit Findings by School and Number of Findings for Federal Fiscal Year 2014

Other Deficiencies

Total 2014 Deficiencies

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Method of Payment

• Refers to the way an institution receives Title IV, HEA

program funds

• Types:

• Advanced Payment

• Heightened Cash Monitoring 1 (HCM1)

• Heightened Cash Monitoring 2 (HCM2)

• Reimbursement

• HCM1, HCM2 and Reimbursement used to mitigate risk

and protect the federal interest in Title IV, HEA funds

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Method of Payment

• Advanced Payment

• Institution draws down Title IV funds prior to disbursement

• Drawdown may not exceed actual or expected disbursement

amount

• HCM1

• Institution must make disbursements prior to drawing down funds

• Audit requirements

• Additional documentation may be required

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Method of Payment

• HCM2

• Institution must make disbursements prior to drawing down funds

• Institution submits a request for reimbursement (Form 270)

• Required documentation must show student(s) were eligible and

received Title, IV funds

• Department initiates drawdown for school

• Reimbursement

• Differs from HCM2 according to internal review procedures

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Recent Developments and Reminders

• New for Foreign Schools

• Foreign Schools Handbook

• Foreign School Update ID: FS-2015-01

• National Student Clearinghouse

• DCL ID: GEN-17-07

• New Direct Loan Fees for FY 2015 and FY 2016

• New for Students

• FSA ID

• FSA Conference

• Las Vegas, Nevada

Tuesday, December 1 – Friday, December 4, 2015

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Contacting Us

• E-mail: FSA.Foreign.Schools.Team@ed.gov

• Phone: 202-377-3168

• Fax: 202-377-3486

• Mail:

U.S. Department of Education

Multi-regional and Foreign School Participation Division

Union Center Plaza, 7th Floor

830 First Street, NE

Washington DC, 20202 (20002 if overnight/courier)

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QUESTIONS?

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