Federal Student Aid - IFAP
AwardYear: 1997-1998
EnterChapterNo: 5
EnterChapterTitle: Campus-Based Programs: Common Elements
SectionTitle: Introduction
PageNumbers: 1-7

The Federal Perkins Loan, Federal Supplemental Educational
Opportunity Grant (FSEOG), and Federal Work-Study (FWS)
programs are called "campus-based" programs because each school
is responsible for administering them on its own campus. A school
applies for and receives program funds directly from the U.S.
Department of Education by submitting an application, the Fiscal
Operations Report and Application to Participate (FISAP), each
award year. (See page 5-5.) The school's financial aid administrator
is responsible for ensuring that eligible students at the school receive
program funds according to the provisions of the law, the
regulations, the Program Participation Agreement (PPA) signed by
both the Secretary of Education and the school's chief administrative
officer, and other criteria the Department may establish.

--Federal Perkins Loan Program
(formerly National Direct Student Loan Program)
--Federal Work-Study (FWS) Program
(includes Job Location and Development Program)
--Federal Supplemental Educational Opportunity Grant (FSEOG)

This chapter covers provisions common to the Perkins Loan,
FSEOG, and FWS programs. Chapters 6, 7, and 8 discuss these
programs individually.

[[Purpose of each program--34 CFR 673.1]]
[[Work-college definition--34 CFR 675.41]]
The Perkins Loan Program encourages schools to make low-interest,
long-term loans to needy undergraduate and graduate students to
help pay for their cost of education. The FSEOG Program
encourages schools to provide grants to exceptionally needy
undergraduate student to help pay for their cost of education. The
FWS Program encourages the part-time employment of needy
undergraduate and graduate students to help pay for their cost of
education and encourages FWS recipients to participate in
community service activities. A school may use part of its FWS
funds for the Job Location and Development (JLD) Program to
locate and develop jobs for students, including community service
jobs. JLD is discussed in Chapter 7, Section 6. An eligible school
that meets the regulatory definition of "work-college" may also use
its FWS and/or Perkins Loan allocation to meet the cost of a Work-
Colleges Program, discussed in Chapter 7.


[[Campus-based general provisions--new Part 673 of 34 CFR]]
A new Part 673 of 34 CFR is added to the regulations as "Part 673--
General Provisions for the Federal Perkins Loan Program, Federal
Work-Study Program, and Federal Supplemental Educational
Opportunity Grant Program," published in the Federal Register
(Part IV) on November 27, 1996. The regulations, which are
effective July 1, 1997,

- consolidate common provisions of the campus-based programs
(formerly found in Parts 674, 675, and 676 of 34 CFR), and
eliminate duplicate provisions for each program;

- include the following consolidated common provisions: Purpose
(34 CFR 673.1), Application (34 CFR 673.3), Allocation and
reallocation (34 CFR 673.4), Overaward (34 CFR 673.5),
Coordination with Bureau of Indian Affairs (BIA) grants (34 CFR
673.6), and Administrative cost allowance (34 CFR 673.7); and

- require schools to administer the programs according to provisions
in 34 CFR Parts 673, 674, 675, and 676, under the provisions of
new 34 CFR 673.2, "Applicability of regulations."

The purpose of each program is discussed on the previous page.
Consolidated provisions for applying for program funds and for
allocation and reallocation are discussed on page 5-5. Consolidated
provisions that apply to campus-based overawards are discussed in
Section 2 of this chapter (a detailed discussion of the treatment of
overawards in all Student Financial Assistance [SFA] programs is
included in Chapter 2, Section 3 of this handbook). Consolidated
provisions for coordination of campus-based aid with BIA grants are
discussed in Section 2 of this chapter, and consolidated provisions of
the Administrative Cost Allowance are discussed in Section 3 of this

[[100% federal share of FWS wages for reading tutors]]
The final regulations published in the Federal Register (Part IV)
November 27, 1996 also add a new provision in Part 675 of 34 CFR,
as 34 CFR 675.26(d)(2), authorizing a 100% federal share of FWS
wages earned by a student who is employed as a reading tutor for
children who are in preschool through elementary school; the work
performed by the student must be for the school itself, for a federal,
state or local public agency, or for a private nonprofit organization
(refer to Chapter 7, Section 5).

[[Cash management regulations]]
Amendments to the Student Assistance General Provisions
regulations (Part 668 of 34 CFR) were published in the Federal
Register on November 29, 1996, which add a new definition of
"payment period" in 34 CFR 668.4 (discussed in Chapter 3, Section
3) and revise the cash management regulations in 34 CFR 668.161 -
668.167. The regulations are effective July 1, 1997. The November
29 regulations are discussed in detail in Chapter 3, Section 3. Special
provisions or exceptions that apply to the campus-based programs
are the following :

[[Disbursement on payment period basis, except FWS]]
- Schools must disburse SFA program funds on a payment period
basis, with the exception of FWS payments to students--34 CFR
668.164(b). FWS payment provisions remain in 34 CFR 675.16,
discussed in Chapter 7, Section 3 of this Handbook.

[[Definition of payment period]]
- A new definition of "payment period," applicable to all SFA
programs, is added as 34 CFR 668.4; previous definitions of
"payment period" are removed from 34 CFR 668.162, 674.2,
675.2, and 676.2; the definition is discussed in Chapter 3,
Section 3 of this Handbook.

[[Definition of disbursement]]
- A new definition of "disbursement," applicable to all SFA
programs, is added in 34 CFR 668.164(a), discussed in detail in
Chapter 3, Section 3 of this Handbook.

[[Late disbursement]]
- Regulations regarding late disbursements of a Perkins Loan and
FSEOG were removed from 34 CFR 674.16 (g) and 34 CFR
676.16(e), respectively, and revised regulations are now in 34
CFR 668.164(g), discussed in Section 3 of this chapter.

[[Interest-bearing account for Perkins Fund]]
- Under the provisions of 34 CFR 668.163(c), schools must
maintain the Perkins Loan Program Fund in an interest-bearing
bank account or investment account. (Refer to Section 3 of this

[[FSEOG & FWS funds]]
- Schools must also maintain FSEOG, and FWS program funds in
an interest-bearing bank account or investment account as
described in 34 CFR 668.163(c), unless the school meets certain
criteria, discussed in Section 3 of this chapter.

[[Disposition of interest earned]]
- A school that maintains program funds for the Direct Loan,
Federal Pell Grant, FSEOG, and FWS programs in an interest-
bearing or investment account may keep the first $250 it earns on
those funds during an award year under the provisions of 34 CFR
668.163(c)(4), but the school must remit any earnings over $250
to the Department by June 30 of that award year.

[[Notification of right to cancel a loan credited to student's account]]
- If a school credits a student's account at the school with Perkins
Loan funds, the school must notify the student of the date and
amount of the disbursement, the student's right to cancel all or a
portion of that loan and his or her right to have the funds returned
to the school's Perkins fund, under the provisions of 34 CFR
668.165(a); a detailed discussion of these provisions is in
Section 3 of this chapter.

[[Maintaining records--668.24 and 674.19, 675.19, & 676.19]]
New recordkeeping regulations were published in the Federal
Register (Part IX) November 27, 1996, revising 34 CFR 668.24 of
the Student Assistance General Provisions, and amending 34 CFR
674.19, 675.19, and 676.19 of the campus-based regulations. The
regulations are effective July 1, 1997. The recordkeeping
requirements for all SFA program records are discussed in detail in
Chapter 3, Section 8. For campus-based records, schools must follow
the new records retention and examination requirements in 34 CFR
668.24 and those in 34 CFR 674.19, 675.19, and 676.19, as

[[Availability of records]]
- A school must make its records readily available for review by the
Department or its authorized representative at an institutional
location designated by the Department or its representative, as
provided by 34 CFR 668.24(d).

[[List of records school must keep]]
- A noncomprehensive list of records a school must maintain for all
SFA programs is provided in 34 CFR 668.24(c), discussed in
detail in Chapter 3, Section 8 of this Handbook. Campus-based
records a school must maintain are discussed in Section 3 of this

[[Perkins Loan repayment history]]
[[Required FWS records]]
- Schools must continue to follow the procedures previously
established in 34 CFR 674.19 for documentation of a student's
Perkins Loan repayment history (discussed in Section 3 of this
chapter). Schools must also continue to follow the procedures
previously established in 34 CFR 675.19 for documenting a
student's FWS work, earnings, and payroll transactions (discussed
in Section 3 of this chapter).

[[Requirement to keep records 3 years]]
- Generally, a school must keep records relating to the school's
administration of a campus-based or Pell Grant program for three
years after the end of an award year for which the aid was awarded
and disbursed under those programs. However, there are some
important exceptions. (See the discussion in Section 3 of this

- A school must keep its campus-based program records in one of
the formats discussed in Section 3 of this chapter.


[[Formats for recordkeeping]]
A school that wants to participate in any SFA program must sign a
PPA with the Department. The agreement must be signed by the
school official legally authorized to assume, on the school's behalf,
the agreement's obligations. (For more information on this
agreement, see Chapter 3, Section 2.)

[[General Provisions--34 CFR 668]]
[[Campus-based regulations--34 CFR 674.8, 675.8, and 676.8]]
The agreement provides that the school must use the funds it receives
for a program solely for the purposes specified in the regulations for
that program and that the school must administer each program in
accordance with the Higher Education Act (HEA) of 1965, as
amended, and the General Provisions regulations. See Chapter 3 of
this handbook for information on the General Provisions. Each of the
campus-based programs has additional requirements that are part of
the PPA and that are specific to the individual program; these
requirements are found in the regulations for each program and in
the HEA. Each program's specific requirements are discussed in the
chapter for that program.


[[Electronic FISAP requirement]]
To receive funds from the Department for one or more of the
campus-based programs, a school must submit a FISAP each award
year. All schools are required to file the FISAP data through the
electronic FISAP process (by mailing diskettes, transmitting data by
modem, or mailing a magnetic tape). The Department no longer
provides or accepts paper FISAP forms. Thus, a school must use the
electronic FISAP process to be eligible to participate (request/receive
a funding allocation) in the campus-based programs.

[[Deadline for returning FISAP]]
Each July, the Department distributes the electronic FISAP packages
and instructions for schools to use in applying for funds for the
subsequent award year. The information reported must be accurate
and verifiable. The Department will distribute the materials essential
for the preparation and submission of the 1996-97 Fiscal Operations
Report and 1998-99 Application to Participate to schools in a "Dear
Colleague" letter in July 1997. The deadline for submitting (mailing
or transmitting) the completed FISAP to the Department by means of
one of the electronic procedures listed above is October 1, 1997.

[[School with pending application to participate]]
A school that has applied to participate in the campus-based
programs for the first time should submit a FISAP by the deadline
even if the school has not been certified to participate in the
programs. The Department will calculate a funding level for the
school and put the funding on "hold" status until the school has been
approved to participate.

See page 5-20 for information on whom to contact if you have
questions about the FISAP.


The Department allocates funds directly to schools according to the
statutory formulas. The allocation (or authorization) for each
program is the amount of funding the school is authorized to receive
from the Department for an award year. This amount is based on the
allocation formulas in the law as well as on the funds appropriated by
Congress for the program. A school will not, however, receive an
allocation that is in excess of its request.

[[Notification of allocation]]
The Department notifies schools of their final allocation for each
campus-based program in late March each year by sending The
Official Notice of Funding.

[[Release of unexpended funds to the Department]]
If a school does not use its total allocation of funds for SFA campus-
based programs, the school must release unexpended amounts to the
Department. In June each year, the Department sends schools a
"Dear Colleague" letter advising them that they must release funds
not spent by June 30 of that year and asking them to estimate the
amount of funds they expect to have used by that date. Later, a
school also must determine the actual amounts spent as of the end of
the award year and report those amounts on the ED/PMS 272 Report
(refer to "Dear Colleague" letter CB-96-20(LD), dated September

[[Reduction in allocation for returning funds]]
If a school returns more than 10% of its allocated funds for a given
award year under any one of the three campus-based programs, the
Department will reduce the school's allocation for the second
succeeding award year by the dollar amount returned unless this
provision is waived by the Department. For example, if the school
returned more than 10% of its 1995-96 allocation, its 1997-98
allocation was reduced by the dollar amount returned for 1995-96.

[[Waiver of reduction in allocation]]
The Department may waive this provision for a specific school if it
finds that enforcement would be contrary to the interests of the
program. The Department considers enforcement to be contrary to
the interest of the program only if the school returned more than 10%
of its allocation due to circumstances that are beyond the school's
control and are not expected to recur. To request a waiver, a school
must submit a written explanation of the circumstances along with
supporting documentation. The request for a waiver for the 1997-98
award year had to be postmarked by February 14, 1997. (See "Dear
Colleague" Letter SYS-97-1, dated January 1997.) By February
1998, the Department will issue a "Dear Colleague" letter explaining
the process a school must use to request a waiver for the 1998-99
award year.

[[Supplemental allocation]]
After schools release their unexpended allocations, the Department
reallocates the funds to schools that have met the criteria for
receiving a supplemental allocation. Criteria for distributing these
funds for each program are established in accordance with the HEA
and the campus-based program regulations.


Included in the FISAP package the Department distributes to schools
annually is the Department Form 80-0013, Certifications Regarding
Lobbying; Debarment, Suspension, and Other Responsibility
Matters; and Drug-Free Workplace Requirements and Standard Form
LLL, Disclosure of Lobbying Activities. To participate in the
campus-based programs each award year, a school's chief executive
officer, or another person who has the authority to sign on behalf of
the entire school, is required to complete, sign, date, and submit
(mail or transmit) to the Department the above certification forms
with the school's completed FISAP by the established deadline. A
detailed discussion of the certification requirements is in Chapter 3,
Section 2 of this handbook.