Financial Responsibility of Institutions

• Statutory Authority

  • U.S. Code, Title 20—Education Chapter 28—Higher Education Resources and Student Assistance Subchapter IV—Student Assistance > Part G—General Provisions Relating to Student Assistance Programs § 1094(a)(3) Program participation agreements [HEA § 487(a)(3)]
  • U.S. Code, Title 20—Education Chapter 28—Higher Education Resources and Student Assistance Subchapter IV—Student Assistance > Part G—General Provisions Relating to Student Assistance Programs § 1094(c) Program participation agreements [HEA § 487(c)]
  • U.S. Code, Title 20—Education Chapter 28—Higher Education Resources and Student Assistance Subchapter IV—Student Assistance > Part H—Program Integrity § 1099c(a) & (c) Eligibility and certification procedures [HEA § 498(a) & (c)]

• Regulations

  • 34 CFR Part 668 Subpart L (668.171 – 668.175)

• ED References

  See also Subtopics for more specific references.

  • Federal Register, 11/25/97
  • 2018-19 FSA Handbook, Vol. 2
  • 2017-18 FSA Handbook, Vol. 2

• NASFAA Publications and Articles

  • NASFAA AskRegs Knowledgebase

    Search or browse the Knowledgebase for answers to regulatory and compliance questions submitted by financial aid administrators.

• Subtopics

  • Administrative actions for failure to meet financial standards

    • 668.171(e)

  • Adverse audit issue disqualifiers

    • 668.171(d)(1)
    • 668.173(c)
    • 2018-19 FSA Handbook, Vol. 2, Ch. 4
    • 2017-18 FSA Handbook, Vol. 2, Ch. 4

  • Alternatives if standards not met

    • Letter of credit

      • 668.173(d), (e)
      • 668.175(b), (c)
      • 2018-19 FSA Handbook, Vol. 2, Ch. 4
      • 2017-18 FSA Handbook, Vol. 2, Ch. 4

    • Provisional certification

      • 668.175(f)
      • 2018-19 FSA Handbook, Vol. 2, Ch. 4
      • 2017-18 FSA Handbook, Vol. 2, Ch. 4

    • Zone

      • 668.175(d)
      • 2018-19 FSA Handbook, Vol. 2, Ch. 4
      • 2017-18 FSA Handbook, Vol. 2, Ch. 4

  • Audits not timely submitted

    • 668.171(e)

  • Change in ownership

    • 668.15
    • 2018-19 FSA Handbook, Vol. 2, Ch. 4
    • 2017-18 FSA Handbook, Vol. 2, Ch. 4

  • Current in debt payments: disqualifiers

    • 668.171(b)(3)
    • 2018-19 FSA Handbook, Vol. 2, Ch. 4
    • 2017-18 FSA Handbook, Vol. 2, Ch. 4

  • Financial ratios

    • Composite score

      • 668.172(a)
      • 2018-19 FSA Handbook, Vol. 2, Ch. 4
      • 2017-18 FSA Handbook, Vol. 2, Ch. 4

    • Excluded items

      • 668.172(c)

    • Private nonprofit schools

      • 668.172(b)(2)

    • Proprietary schools

      • 668.172(b)(1)

  • General standards applicable to private nonprofit and for-profit institutions

    • 668.171(b)
    • 2018-19 FSA Handbook, Vol. 2, Ch. 4
    • 2017-18 FSA Handbook, Vol. 2, Ch. 4

  • General standards applicable to public institutions

    • 668.171(c)
    • 2018-19 FSA Handbook, Vol. 2, Ch. 4
    • 2017-18 FSA Handbook, Vol. 2, Ch. 4

  • Past performance disqualifiers

    • By individuals

      • 668.174(b)
      • 2018-19 FSA Handbook, Vol. 2, Ch. 4
      • 2017-18 FSA Handbook, Vol. 2, Ch. 4

    • Definition of family member

      • 600.21(f)

    • Definition of ownership interest

      • 668.174(c)

    • Of institution

      • 668.174(a)
      • 2018-19 FSA Handbook, Vol. 2, Ch. 4
      • 2017-18 FSA Handbook, Vol. 2, Ch. 4

  • Refund reserve standards

    • State tuition recovery funds

      • 668.173(a)(2)
      • 668.173(f)

    • Sufficient cash reserves

      • 668.173(a)
      • 2018-19 FSA Handbook, Vol. 2, Ch. 4
      • 2017-18 FSA Handbook, Vol. 2, Ch. 4

    • Timely return of Title IV funds

      • 668.173(b)
      • 2018-19 FSA Handbook, Vol. 2, Ch. 4
      • 2017-18 FSA Handbook, Vol. 2, Ch. 4

  • Required compliance to participate in Title IV programs

    • 668.171(a)