Paying for a comprehensive peer review can be a heavy lift financially for some schools. As a result, it can take years to convince those who hold the purse strings that having a peer review is worth the investment. It is necessary to think strategically about how to finance your peer review – here are five methods you may use to finance your peer review with NASFAA.
If it has been more than 10 years since your last federal program review, or if you have any heightened risk factors for a review, performing a risk assessment may help you justify the funds for a NASFAA peer review. Federal program reviews can result in financial fines and liabilities to the institution. "The purpose of a fine is to punish an institution for its misconduct and to deter that institution, as well as other institutions, from committing similar violations in the future, whereas a liability is established in the amount of federal student aid program funds that an institution improperly received or disbursed and therefore must repay" (School Fine Report, Definitions). The maximum fine for a simple Clery Act disclosure or reporting violation is now $54,789, which is more than double the fee for a full Standards of Excellence (SOE) review, and more than 15 times higher than the cost of a Consumer Information (CI) Assessment. Engaging in a peer review can help your school reduce the risk of multiple, higher fines that could result from a program review.
It is never too early to think about next year's budget. Have conversations with your finance colleagues now to learn how to build the strongest case to add the cost of a peer review to your budget for the upcoming year. But closely watch your expenditures for this year. When you look at your expenses at the end of the second or third quarter, maybe your expenses were not as high as you expected and it appears you will end the year with extra funds. If the amount will be enough to cover the cost of a peer review, move quickly to obtain the necessary approvals and work with NASFAA to secure your review date in order to use those funds before the end of the fiscal year.
It may be difficult initially to justify the cost of a full SOE review to your administration. In these situations, starting with a smaller evaluation to "test drive" a NASFAA peer review may help you justify the full SOE review. NASFAA offers a mini review that only evaluates your compliance with Consumer Information disclosure and reporting requirements, at approximately 10 percent the cost of a full review. We also conduct this evaluation completely off-site, so there are no travel expenses. Additionally, if you have a CI Assessment followed by a full SOE review within the same 12-month period, you will receive a discount on the full review fee.
Regulations allow schools to receive an Administrative Cost Allowance (ACA) to help cover the costs of administering the Federal Pell Grant and campus-based aid programs. To successfully administer these programs, the Department of Education (ED) requires schools to meet all standards of administrative capability, which includes complying with all statutory and regulatory provisions, as well as published guidance. While you cannot use the ACA to pay for professional memberships (such as those for NASFAA, regional, or state financial aid associations), there is nothing in regulation or published guidance prohibiting you from using the ACA to pay for services that help your school remain in compliance with Title IV rules and regulations. You may consider combining the use of your ACA with budgeting over time as well.
Think for a moment about the various insurance policies you may have: life, auto, home, renters. You pay the premiums on these policies once or twice a year, so you may save a little money each month to cover the cost when the bill comes. You can apply the same methodology to your peer review. It may be easier to add a smaller amount to your budget each year, rather than a one-time lump sum. For example, if your budget can withstand an increase that will allow you to have a review in five years, split the cost of the review and travel expenses over that interval and add that amount to your budget request each year. This method also works well if you want to have a review periodically, such as every five or seven years, because the amount is already established in your budget.
The first step in determining which of these strategies will be best for your school and budget is to request a cost estimate about NASFAA's peer review services by visiting nasfaa.org/SOE.