The US Department of Education has announced their intention to release a final rule entitled
“Financial Responsibility, Administrative Capability, Certification Procedures, Ability to
Benefit (ATB)” with the Docket ID of ED-2023-OPE-0089. This document has yet to be published
in the Federal Register. Earlier this year the Department released a Notice of Proposed Rulemaking
to which COHEAO submitted comments. Specifically, the Department proposed restricting
institutions of higher education from withholding transcripts when an institutions mistakes cause a
student to owe a balance; however, in the discussion ED hinted at expanding the reach of this
provision. COHEAO submitted a letter addressing the issue and complications of expansion. In the
draft final rule, ED is required to respond to each argument presented. To summarize, ED pretty
much disagreed with every COHEAO point; however, did acknowledge certain process
complications that were raised.
Here is the final language, which is fairly similar to what was originally proposed and is being added
to the Code of Federal Regulations at 668.14(b) pertaining to an institution’s Program Participation
Agreement (PPA):
(33) It will not withhold official transcripts or take any other negative action against a student
related to a balance owed by the student that resulted from an error in the institution’s
administration of the title IV, HEA programs, or any fraud or misconduct by the institution or its
personnel;
(34) Upon request by a student, the institution will provide an official transcript that includes all the
credit or clock hours for payment periods— (i) In which the student received title IV, HEA funds; and
(ii) For which all institutional charges were paid or included in an agreement to pay at the time the
request is made;
Analysis: Paragraph (33) does NOT prevent an institution from withholding a transcript IF the
balance owed by the student is a legitimate debt. If however, it is found that an institution made a
mistake in its calculations, that would be considered a debt created by an institutional error and
would prevent the institution from withholding that transcript.
Contrast that language with paragraph (34) (and for those regulatory technical nuts ….. er I mean
people, this may be a subparagraph or even finer), which says that if the student received any
federal funds – Pell, direct loans, Federal Work-Study, SEOG funds, and potentially other Title IV
funds like TRIO or GEARUP. The paragraph states that an institution may not withhold a transcript
when the student received these funds AND did not owe a debt to the institution for a given
academic session.
In other words, a student receiving federal aid is current on their balances through their second year,
but end up incurring a debt in their third year, and requests a transcript for whatever purpose; the
institution is only obligated to provide a transcript containing the first two year’s of courses. To make
matters a little more complicated, if the student is paid through the first semester of their third year
and the debt is incurred during the second semester or another term (J-term, summer), the
institution would be required to provide a transcript including the first two years AND the first
semester coursework.
There are certainly more questions that I haven’t addressed in this simplified version. We will have to
wait to see how and whether the Handbook clarifies or further complicates these questions.
Bottom line – Institution makes a mistake to cause a debt, it can’t withhold a transcript. No mistake
on institution, then it can. However, if any of the completed coursework was paid for, in-whole or inpart, then institution must release for terms where no debt existed. If student is not benefitting from
any Title IV/HEA funds, then school may continue to withhold.
The discussion of this issue starts on page 425 using the link above, it will definitely be a different
page number when it is finally printed in the Federal Register.
Perkins Loan Revolving Fund Distribution of Assets Timeline
On October 6, 2023, the Department released Electronic Announcement CB-23-18 outlining the
calculation and conditions for how institutions are required to make a capital distribution from the
institution’s Perkins Loan Revolving Fund (Perkins Fund). ED will notify institutions of the amount
upon processing the institution’s FISAP, so no action is required until you receive that note.
However, the notice outlines how ED will make the calculation for the amount that they send in the
institution’s notice.
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