Financial Aid Compliance – More Than a Risk Tolerance Decision

When a college or university has Federal Student Aid (FSA) on campus for eligible students to utilize, the institution is required to remain in legal compliance with numerous federal laws. The financial aid office works to coordinate the various tasks that need to be completed by other offices to fulfill the rules. Some selected examples are having student consumer information available for potential and current students, faculty and staff to include the Clery Act, monitoring Satisfactory Academic Progress (SAP), tracking student attendance and having the Business/Bursars Office draw down and disburse funds in a timely manner.

In fact, the goal is to provide eligible students with the correct amount of funds at the right time. To do this the financial aid office can operationalize four core objectives. First, to provide students, their families and other departments with effective customer service. Second, to work with the campus administration to maintain institutional legal compliance with all Federal Student Aid (FSA) rules and regulations. Third, to fully utilize technology to assist with the administration of the process for students, families and staff. Fourth, to remain current on regulatory changes and look at best practices, to consider making enhancements to campus operations.

Financial aid is different from most other programs and services that people are used to interacting with and this is what makes the online and/or in person visit with this department different. Let’s look at a few examples.

Supervision – A financial aid administrator’s decision is final and cannot be overruled by the US Department of Education. A college president is also not allowed to overturn their decision. This means the typical supervisor requiring a decision to be changed is not in place. Due to the level of authority involved and how this can impact a student’s academic career, it is ideal for every legal exception that can be made to be taken into consideration before a financial aid final determination is made. When this has been the process that was used and the answer has to be no, a college president or another supervisor violating the financial aid administrator’s ruling, involves them breaking the  law.

Going to the Manager – It is common for customers to ask for a manager when they are dissatisfied with the service that was provided. The hope the customer has is that the manager can provide a different answer than the front line staff made. In the financial aid profession, when it comes to federal funds, the answer is the same. The legally allowed change is if only the manager is the one at this particular college or university that utilizes the professional judgement to make the lawfully allowed exception. In some financial aid offices, the assistant director/s and not just the director have the ability to do this type of task. Regardless, no staff member or campus official is allowed to go above and beyond what is allowed within the federal regulations.

Risk Tolerance – The two above realities make not following Federal Student Aid (FSA) regulations more than a risk tolerance decision. It means asking the financial aid office to potentially create an annual audit issue, not follow federal rules and regulations,  and make a decision that will not be supported by standard accounting and IT system records is invalid. If the financial aid office is under pressure that on any given day a complaint to upper administration about a student being told no might lead to a request to break federal regulations, it can lead to regular staff turnover and a potential federal review. This could lead to the school  losing access to the funding for all otherwise eligible students.

Ways to Balance Customer Service and Compliance  

How can you provide quality customer service when you sometimes have to say the answer is no? Below are some suggestions.

Update Consumer Information – Potential students need to  know the costs involved  up front, what Federal Student Aid (FSA), private scholarships and other funding options are available. This allows for students and their families to have the information to make a good decision. Financial fit needs to be one of the criteria used when making a final college selection decision.

Student Success and Retention Culture – All campus offices need to review campus operations to see how they can support students. EXAMPLES: Can paid internships be arranged, is an emergency fund available, are academic advising  appointments used for student academic major fit evaluations instead of  mainly class scheduling? Having regular meetings will allow all campus offices to keep these discussions going and create a great student centered culture.

References:

Professional Judgement. The decision of the financial aid administrator is final. There is no appeal. By law, neither the school’s president nor the US Department of Education can override the financial aid administrator’s decision.

What is Professional Judgement? The US Department of Education does not have the authority to override a school’s professional judgment decision.