AwardYear: 1996-1997 EnterChapterNo: 3 EnterChapterTitle: Institutional Eligibility and Administrative Requirements SectionNumber: 8 SectionTitle: Recordkeeping and Disclosure PageNumbers: 149-155 The General Provisions regulations require schools to maintain student records, and program and fiscal records. Schools must make these records available to auditors and representatives of the Department, in the course of the reviews described in Section 7. [[Complete and consistent records]] The importance of maintaining complete and consistent records cannot be overemphasized. Program and fiscal records must show a clear "audit trail" for SFA Program expenditures. Similarly, student records for each SFA recipient must clearly show that the student was eligible for the funds received, and that the funds were disbursed in accordance with program regulations. Any exceptions to the schools normal procedures should be appropriately noted in the file, in terms that would be clear to anyone reviewing the file, whether a program reviewer or another member of the financial aid office staff. [[Documenting special circumstances]] The law explicitly requires the financial aid administrator to document the students file when using professional judgment to override a students dependency status, to adjust a students Expected Family Contribution (EFC), or to make other adjustments that will affect a students SFA eligibility. In general, the financial aid administrator should note in the students records any unusual situation that explains any special consideration given to the student when awarding financial aid. [[NEW]] This section describes the recordkeeping requirements contained in the General Provisions. However, schools should note that regulations published December 1, 1995 made changes to the recordkeeping requirements for the campus-based programs (see Chapter 5). This section also includes a discussion of the Family Educational Rights and Privacy Act (FERPA), which restricts the disclosure of student records to other parties and requires the school to give a student the opportunity to review his or her records. PROGRAM AND FISCAL RECORDS A school must keep consistent and accurate records of its use of SFA funds. These program and fiscal records must be available for review, including, upon written request, any records of transactions between a school and the financial institution where the school deposits any SFA funds. As discussed in Section 3, Cash Management, when a school establishes bank accounts for Pell Grant, PAS, FSEOG, Perkins, Direct Loans, or FWS funds, it must either inform the bank that these are federal accounts by writing the bank (making sure to keep a copy of the notice) and filing a UCC-1 statement, if required, OR by including the words "federal Funds" in the name of the account. The account designated as simply "SEOG account" or "ABC University Pell Grant account" would not satisfy the requirement because neither identification indicates that the school will be depositing federal funds. SOME EXAMPLES OF ACCEPTABLE ACCOUNT DESIGNATIONS: Federal Pell Grant Account Federal Perkins Loan Cash Account ABC University - Federal EDPMS Account ABC - Federal Cash Account STUDENT RECORDS [[General student record requirements]] [[NEW]] In addition to program and fiscal records, a school must keep records that substantiate the eligibility of its students for SFA funds. Previously, a school was required to keep student records for five years. The Improving Americas Schools Act of 1994 (Public Law 103-382) amended the General Education Provisions Act to require a school to keep student records for THREE years. (See the chart on page 3-152.) For each student who receives SFA funds, a school must keep records of - the students admission to and enrollment status at the school, - the students program of study and the courses in which he or she is enrolled, - whether the student is making satisfactory academic progress, - all financial aid the student receives (and a financial aid transcript for a transfer student), - all refunds due or paid and the source to which they are paid (e.g., to the student, the SFA Programs, or the FFEL lenders), - verification of information on the student aid application, and - any required certifications signed by the student, and any documents used to document the students registration status. The school must also keep records regarding its admission requirements and the educational qualifications of each student in each eligible program--whether or not such a student receives SFA funds. [[Admission and enrollment status information]] If only certain programs at the school are eligible for SFA funding, the school must maintain records regarding the admission requirements for those programs and the educational qualifications of the regular students enrolled in them. Admission and enrollment status information may include why a student was admitted, how the students standing compares to that of the average student entering a particular eligible program, and what remedial courses are necessary for the student to complete the program. [[High school diploma, GED program, etc.]] To ensure that SFA recipients are eligible postsecondary students, a school participating in the SFA Programs must document that the student is no longer enrolled in elementary or secondary school. If the student certifies that he or she has a high school diploma or recognized equivalent, the school must keep a copy of the students certification. A school may also need to keep statistics showing the success of the GED program it makes available to its students, if the GED program is not conducted by state or local secondary school authorities. [[Statistics on GED program and campus security; drug prevention materials]] The law requires that a school keep statistics relating to crimes committed on campus (see Section 9). The school must also keep copies of its drug prevention materials, as well as records indicating that these materials were distributed to each student and employee, and the results of the schools evaluation of its drug prevention program. The school must keep its drug prevention program records for at least three years after the fiscal year in which they were created, and must keep the records longer if they are needed to resolve litigation or an audit, program review, or other action. [[Specific program record requirements]] Each SFA Program also has specific record retention requirements. For instance, the Pell Grant regulations require a school to maintain fiscal records for all program transactions, the name and social security number of each student recipient, and records establishing each recipients eligibility, cost of attendance, and the amount and date of each payment to the student (as well as any repayments to the program accounts on behalf of that student). See Chapters 5, 6, 7, 8, and 10 for the program-specific requirements. [[Availability of records]] Student records must be organized and readily available for review by the Department of Education. (Refer to The Blue Book for further information.) The records must be kept at the degree- or certificate-granting school, although not necessarily in one school office. [[The "Record Retention Requirements" chart and footnote on page 3-152 are currently unavailable for viewing. Please reference your paper handbook for additional information.]] [[Microfilm and microfiche records]] Records may be maintained on microfilm or microfiche, except for the promissory notes and repayment schedules under the Perkins, NDSL, and FFEL programs. (Note that microfilmed copies of promissory notes and repayment schedules are NOT acceptable.) Notwithstanding other record retention requirements, a school MUST keep records involved in any claim or expenditure questioned by a federal audit or program review until resolution of any questions. DISCLOSING STUDENT INFORMATION To protect the privacy of students and families, federal law sets certain conditions on the disclosure of personal information from records kept by schools that participate in the SFA Programs. The relevant law is the Family Educational Rights and Privacy Act of 1974 (FERPA); do not confuse FERPA with the Privacy Act of 1974, which governs the records kept by government agencies, including the application records in the federal processing system. Final regulations published on January 17, 1995 clarified FERPA restrictions on disclosure of records that are created and maintained by campus law enforcement units (for law enforcement purposes). For more information, see Section 9. Department regulations published in 1988 set limits on the disclosure of personally identifiable information from school records, and define the responsibilities of the school, and the rights of the student in reviewing the records and requesting a change to the records. A school must give the student the opportunity to inspect and review his or her educational records, but does not have to provide copies of the records unless the requirement that the student come to the school to inspect and review the records would effectively deny access to the student. While the school may not charge a fee for retrieving the records, it may charge a reasonable fee for providing COPIES of the records, provided that the fee would not prevent access to the records. A School is required to -- - DEVELOP A WRITTEN POLICY listing the types and locations of education records maintained by the school, and stating the procedures for parents and students to review the records. - NOTIFY PARENTS AND STUDENTS of their rights with respect to educational records. - DOCUMENT THE STUDENTS FILES each time personally identifiable information is disclosed to persons other than the student. A student has the right to -- - INSPECT AND REVIEW education records pertaining to the student. - REQUEST AN AMENDMENT to the students records. - REQUEST A HEARING (if the request for an amendment is denied) to challenge the contents of the education records, on the grounds that the records are inaccurate, misleading, or violate the rights of the student. The box to the right notes several important elements of the schools responsibilities and the rights of the student or parent. The regulations apply to ALL education records the school keeps, including admissions records (only if the student was admitted) and academic records as well as any financial aid records pertaining to the student. Therefore, the financial aid office is not usually the office that develops the schools FERPA policy or the notification to students and parents, although it may have some input. [[Disclosure without students prior written consent]] The FERPA regulations also establish rules governing the disclosure of student information to parties other than the student. The regulation lists twelve conditions under which "personally identifiable information" from a students education record may be disclosed without the students prior written consent. Several of these conditions are of particular interest to the financial aid office: - DISCLOSURE MAY BE MADE TO AUTHORIZED REPRESENTATIVES OF THE U.S. DEPARTMENT OF EDUCATION, THE OFFICE OF INSPECTOR GENERAL, OR STATE AND LOCAL EDUCATION AUTHORITIES. These officials may have access to education records as a part of an audit or program review, or to ensure compliance with SFA Program requirements. (Representatives of the Department include research firms that are under contract with the Department to conduct studies of financial aid procedures, using student information provided by the schools selected for the study. The term also includes the SFAP public inquiry contractor.) - DISCLOSURE MAY BE MADE IF IT IS IN CONNECTION WITH FINANCIAL AID THAT THE STUDENT HAS RECEIVED OR APPLIED FOR. For instance, the school may receive a request from the Immigration and Naturalization Service (INS) or the Federal Bureau of Investigation (FBI) for access to a students records. Such a request may only be granted if the student information is needed to determine the amount of the aid, the conditions for the aid, the students eligibility for the aid, or to enforce the terms or conditions of the aid. - DISCLOSURE MAY BE MADE TO THE STUDENTS PARENT, IF THE STUDENT IS A DEPENDENT OF THE PARENT, AS DEFINED BY THE INTERNAL REVENUE SERVICE. If the student receives more than half of his or her support from the parent, under the IRS definition, the student is a dependent of the parent. (Note that the IRS definition is quite different from the rules governing dependency status for the SFA Programs.) - DISCLOSURE MAY BE MADE TO ORGANIZATIONS THAT ARE CONDUCTING STUDIES CONCERNING THE ADMINISTRATION OF STUDENT AID PROGRAMS ON BEHALF OF EDUCATIONAL AGENCIES OR INSTITUTIONS. [[Documenting requests for information]] Schools are required to keep a record of each request for access and each disclosure of personally identifiable student information. The record must identify the parties who requested the information and their legitimate interest in the information. This record must be maintained in the students file as long as the educational records themselves are kept. [[Sample disclosure statement for program reviews]] If student records are requested by Department reviewers in the course of a program review, for instance, the school must document in each students file that the students records were disclosed to representatives of the Department. The easiest way for the school to do this is to photocopy a statement to this effect and include it in each students file. A statement such as the following would be appropriate for a review of the SFA Programs conducted by a Department regional office: "These financial aid records were disclosed to representatives of the U.S. Department of Education, Region __, on (Month/Day/Year) to determine compliance with financial aid requirements, under 34 CFR Part 99.31(a)(4)." [[Redisclosure to other authorized parties]] When student information has been disclosed to one of the parties listed above, that party may redisclose that information to additional parties who are authorized to receive the information without prior written consent, provided that such redisclosure is included in the statement in the students file. For instance, if a program review finds evidence that a student may have fraudulently obtained aid, this information may be redisclosed to the Departments Office of Inspector General (OIG) by the regional office. (Thus the OIG would not have to make a separate request to the school for the same information.) When redisclosure is anticipated, the additional parties to whom the information will be disclosed must be included in the record of the original disclosure. For instance, to continue the example for an SFA Program review, the following statement might be added: "The Institutional Review Branch may make further disclosures of this information to the Departments Office of Inspector General, and to the U.S. Department of Justice, under 34 CFR 99.33(b)." You should check with the program review staff to find out if any redisclosure is anticipated. As mentioned earlier, the financial aid office is usually not responsible for developing the schools FERPA policy. However, if you are involved in developing your schools policy and would like a copy of the Departments model policy for postsecondary schools, you may write to the following address: Family Policy and Compliance Office U.S. Department of Education 600 Independence Avenue, S.W. Washington, D.C. 20202-4605 |