Final Program Integrity Rules: Satisfactory Academic Progress

Final program integrity regulations were published on October 29, 2010, based on a Notice of Proposed Rulemaking (NPRM) published on June 18, 2010. This article is part of a series on final program integrity regulations. The series details the regulatory changes and additional information contained in the preamble to the final rules in response to comments submitted to the U.S. Department of Education. Most provisions are effective July 1, 2011 (verification being the notable exception, with an effective date of July 1, 2012). Unlike previous final rule packages in recent years, early implementation at an institution’s option has not been approved for any provision. 

Change from Proposed SAP Rules

The final rules on satisfactory academic progress (SAP) made only one change to the proposed rules. Section 668.34(a)(3)(ii) was changed to provide that, for programs longer than an academic year in length, satisfactory academic progress is measured at the end of each payment period or at least annually to correspond to the end of a payment period.

This change was made to reinforce ED's intent, declining a suggestion by a commenter who requested that schools with nonterm programs be permitted to set evaluations based upon calendar dates rather than payment period completion, since students in these programs complete payment periods at different points in time. ED acknowledged that evaluations based upon calendar dates would be easier for schools but does not believe that this approach would work because on any given date, any particular student could be at the beginning, middle, or end of a payment period and the SAP review must account for completed coursework. Therefore, in the final rules, ED added language to clarify its intent that the SAP evaluation be done at the end of a payment period.

Effective Date

The final rules related to satisfactory progress are effective July 1, 2011. In the preamble, the Department of Education (ED) stated that schools that may have to adjust or change their SAP policy will have to publicize such a change to students, and let students know when any new SAP policy is effective. In response to commenters' questions about summer crossover periods, ED stated that a school may decide that for the purpose of this policy change, a 2011-12 summer crossover period will be subject to their current SAP policy and procedures, as part of the 2010-11 award year. This would be acceptable, and should be addressed in the school's notification to their students of the effective date of any new policy.

Summary of Changes

The final rules move satisfactory academic progress regulations from administrative capability to student eligibility, consolidating the various pieces currently found in different areas of regulation. Also incorporated into the regulations are certain SAP policy requirements that are currently only found in the FSA Handbook. Although the maximum interval between assessments will continue to be one year, the new rules impose limits on how long a student could continue to receive Title IV aid in order to make up deficiencies in meeting SAP standards. The final rules distinguish between warning periods (when the school's policy can allow a student to continue to receive Title IV aid automatically), and probationary periods (when the student can continue to receive Title IV aid only as the result of a successful appeal). Only schools that assess SAP at the end of every payment period can apply warning periods. Schools that assess SAP less frequently must require a successful appeal to let any student continue to receive Title IV aid despite failing SAP standards.

The final rules continue to give institutions flexibility in establishing their policies. ED provided this flexibility to ease concerns about undergraduate students who may need to go beyond the 150 percent maximum time frame and the treatment of second appeals.

ED's main goals are to limit how long students who are not making satisfactory academic progress can continue to receive Title IV aid, and to implement a more structured, comprehensive, and consistent approach to the development and implementation of institutional SAP policies.

Background

Currently, satisfactory academic progress requirements are contained in three sections of the regulations: 668.16(e), 668.32, and 668.34. Section 668.16(e) specifies that in order to be considered administratively capable, the school must establish, publish, and apply reasonable standards for measuring whether a student is maintaining satisfactory progress. Reasonable standards are the same as or stricter than the school's standards for students enrolled in the same program who are not Title IV recipients, and contain both qualitative (grade-based) and quantitative (time-related) standards.

The policy must be applied consistently and the school must check both qualitative and quantitative components at the end of each increment, which may not be longer than one half of the length of the program or one academic year, whichever is less.

The policy must provide specific procedures under which a student may appeal a determination that the student is not making satisfactory progress and specific procedures for a student to re-establish that he or she is making satisfactory progress.

Current section 668.32(f) specifies that to be eligible to receive Title IV aid, a student must maintain satisfactory progress under the school's published standards.

Section 668.34 specifies that a student who is enrolled in a program that is longer than two academic years must, at the end of the second year, have a grade point average of at least a "C" or equivalent, or have academic standing consistent with the school's graduation requirements. Also, a school may determine that a student is making satisfactory progress even if the student does not meet these requirements, based upon the death of a relative of the student, an injury or illness of the student, or other special circumstances.

Sub-regulatory guidance gives significant latitude to schools in devising appeal policies. Therefore, there is great variation from school to school regarding the use and definition of various statuses, such as warning and probation. All schools are currently permitted to grant automatic probationary periods, and there are no restrictions on their length.

Final Rules

Significant changes to current rules are described below:

  • Restructure the satisfactory academic progress requirements 

     

The final rules restructure the satisfactory academic progress requirements. Section 668.16(e) is revised to include only the requirement that an institution establish, publish, and apply SAP standards that meet the requirements of 668.34. The remainder of the relevant parts of 668.16(e) have been moved to 668.34. Hence, there will be only one section that describes all of the required elements of a SAP policy, as well as how a school would implement its policy.

The elements of a school's SAP standards will still include a qualitative component (typically grade point average), a quantitative component referred to as the student's pace, and a maximum timeframe (which would continue to be limited to no more than 150% of the published length of the program for undergraduate study).

Note that some schools currently evaluate one component of their SAP policy annually, but evaluate the other component more frequently. For example, some schools evaluate qualitative progress (generally grade point average) every term, but quantitative progress (e.g., credits earned) only annually. ED has responded negatively to inquiries about this practice; the preamble to the proposed rule specified that each evaluation must examine both components.

  • Make explicit the requirement that schools specify the pace at which a student must progress through the educational program and provide for measurement of a student's pace at each evaluation. 

The final rule clarifies that a SAP policy must be constructed based on the maximum timeframe. Thus, the periodic evaluations must reflect the progress necessary to complete the program within that timeframe. Although SAP policies should currently be constructed in this way, ED has seen instances where students can continue to receive aid under a school's policy even though it is no longer mathematically possible to achieve graduation requirements by the end of the maximum timeframe. This aspect of the final rule seeks to preclude that scenario by clarifying ED's expectations.

The final rule specifies how to measure pace, by dividing the cumulative number of hours the student has successfully completed by the cumulative number of hours the student has attempted. (Remedial coursework may be excluded from this determination, but transfer credits accepted by the institution towards the student's program are included.)

  • Codify previous sub-regulatory guidance regarding transfer credits.

Schools will be required to count transfer credit hours that are accepted toward a student's educational program as both attempted and completed hours.

This requirement is currently included in the FSA Handbook. It is not in current regulations.

  • Specifies appeal requirements, if the school chooses to permit appeals.

The circumstances under which a student would be permitted to submit an appeal (death of a relative, injury or illness of the student, or other special circumstances) remain unchanged from current regulations.

However, a student will be required to submit, as part of the appeal, information regarding why the student failed to make SAP, and what has changed in the student's situation that would allow the student to demonstrate satisfactory academic progress at the next evaluation.

  • Specifies appeal approval conditions.

     

An appeal may be approved only if the school:

  1. Has determined that the student will be able to meet SAP standards after the subsequent payment period; or
  2. Develops an academic plan with the student that, if followed, will ensure that the student is able to meet SAP standards by a specific point in time.

Failure to meet either or both the qualitative and quantitative (pace) standards may be appealed under the final rules, as is currently allowed.

In the preamble to the final rules, ED clarified that these SAP regulations do not require that an institution accept or evaluate student appeals of determinations that the student is not making SAP. An institution is free to craft a SAP policy that allows appeals or not, and to specify when and how such appeals will be permitted as well as how often and how many times a student may appeal.

NPRM commenters asked several questions about academic plans. There were several comments about the burden of developing academic plans. ED's response is that schools are not required to develop or process an academic plan for a student who appeals. Academic plans are offered as options for schools who wish to allow those students who are no longer meeting the SAP standards to continue to receive Title IV aid. An academic plan for a student may be as complicated as a course by course plan toward degree completion, or as simple as a mathematical calculation that specifies the percentage of coursework that the student must now complete. Academic plans need not be complicated or detailed; the purpose of these plans is merely to put the student on track to successful program completion. The SAP policy of the institution should specify the conditions under which an academic plan might be approved, or if one will be considered at all.

Another question related to the official status of those students who are following their academic plan and whether they must submit additional appeals after each SAP evaluation. ED clarified that a student who has appealed a determination that he or she is not meeting satisfactory academic progress and is attending his or her program under an approved academic plan remains eligible for Title IV aid as long as he or she continues to meet the conditions of that plan. In such a situation, the student's academic progress would simply be re-evaluated at the same time as the institution's other Title IV recipients are evaluated, unless its policy called for a different review period (e.g., more frequently) for students on an academic plan.

ED also clarified that a student who has been reinstated to eligibility under an academic plan and is making progress under that plan is considered to be an eligible student. The student is not considered to be on financial aid warning status or financial aid probation status, provided he or she is otherwise making satisfactory progress under the academic plan. We believe that a student who has failed to make satisfactory academic progress, and has had an appeal approved with an academic plan in place would be considered to be on financial aid probation status for the subsequent payment period. Also, we believe that after the subsequent payment period, if the student is determined to be following the academic plan, then the student would be considered an eligible student. We are working to confirm this understanding with ED officials.

  • Provides standardized definitions of financial aid warning and financial aid probation.

Financial aid warning is a status assigned to a student who fails to make satisfactory academic progress at a school that evaluates academic progress at the end of each payment period, and chooses to allow students who fail its progress standards to continue to receive aid.

Financial aid probation is a status assigned to a student who fails to make satisfactory academic progress and who has appealed and has had eligibility for aid reinstated.

Several commenters on the NPRM asked if this new terminology must be used in a school's consumer information and other communications with students, or if they could continue to use their current terminology. ED's response is that schools must ensure that the information made available by the institution uses the terminology from these regulations.

  • Specifies under what circumstances financial aid warning and financial aid probation statuses may be used.

Only schools that evaluate academic progress at the end of each payment period may have a financial aid warning status. A student on financial aid warning may continue to receive Title IV aid for one payment period despite a determination that the student is not meeting SAP standards. Financial aid warning status may be assigned without an appeal or other action by the student; thus, warning status can be granted "automatically."

Financial aid probation status can be used by any school. Probation status can be granted only after the student has appealed and has had eligibility for aid reinstated based on the appeal. A school could require that a student on probation fulfill specific terms and conditions, such as taking a reduced course loan or enrolling in specific courses. A student on financial aid probation may receive Title IV funds for one payment period. At that point, the student must meet the school's SAP standards or the requirements of the established individual academic plan to maintain Title IV eligibility.

Schools that evaluate SAP at the end of each payment period 

For the payment period following the payment period in which the student did not meet SAP standards, the school may choose to:

1. Place the student on financial aid warning and disburse Title IV funds to the student; or 2. Place the student on financial aid probation, following the prescribed appeal procedures, and disburse Title IV funds to the student.

It is the school's option to incorporate warning periods and/or probationary periods. A school is not required to use either option.

For the payment period following a payment period during which a student was on financial aid warning and still did not meet SAP standards, the school may choose to place the student on financial aid probation, following the prescribed appeal procedures, and disburse Title IV funds to the student.

For the payment period following a payment period during which a student was on financial aid probation, the school can disburse Title IV funds only if the student is meeting SAP standards or the school determines that the student met the requirements specified by the institution in the student's academic plan developed during the appeal process.

Schools that evaluate SAP annually or less frequently than at the end of each payment period 

Schools that evaluate SAP less frequently than every payment period may not use the financial aid warning option.

For the payment period following the payment period in which the student did not meet SAP standards, the school may choose to place the student on financial aid probation, following the prescribed appeal procedures, and disburse Title IV funds to the student.

For the payment period following a payment period during which a student was on financial aid probation, the school can disburse Title IV funds only if the student is meeting SAP standards or the school determines that the student met the requirements specified by the institution in the student's academic plan developed during the appeal process.

NPRM commenters asked whether it would be permissible to evaluate different categories of students at different intervals, such as evaluating first and second-year students every payment period and third and fourth-year students once per year. ED's response in the preamble is that schools retain the flexibility to evaluate different categories of students differently, as long as the policy provides for consistent application of standards within each of the categories of students. However, the automatic financial aid warning status can only be used for those students who are evaluated every payment period.

Although schools do still have the option to evaluate SAP once per year, there were some commenters who felt that ED is placing unfair restrictions (namely, the inability to use the financial aid warning status) on those schools who choose to evaluate less often than every payment period rather than at the end of each payment period. There were several commenters who believed that schools with high retention and graduation rates should be allowed to use the financial aid warning status regardless of how often they evaluate SAP. In response, ED stated that they do not believe that it is appropriate to allow a student who does not meet eligibility criteria to continue to receive Title IV funds without a formal intervention by the institution in the form of an appeal approval or an academic plan.

Summer terms 

Summer will count as any other payment period. A school that offers a summer session but evaluates only at the end of fall and spring will be considered an institution that evaluates less frequently than at the end of each payment period, and cannot therefore have an automatic warning period. 

For example, a school that evaluates after each term puts a student on automatic warning after the spring evaluation; the student takes summer courses. He would have to be evaluated at the end of summer and either have made up the SAP deficiency or successfully appeal his failure to make up the deficiency in order to receive aid for the fall.

Another school finds that a student is no longer making progress at the annual evaluation following spring term. The student successfully appeals, and elects to take summer courses. At the end of the summer payment period, the school must evaluate that student's progress.

In the preamble to the final rules, ED responded to a question asking whether the institution could state in its SAP policy that it reviews SAP after all work for the academic year is completed. Under this approach, the institution would review some students in the spring and others after they complete summer term. ED's response was that yes, an institution may choose to state in its SAP policy that it monitors academic progress at the end of the student's completion of the academic year.

  • Expands the elements required in a school's SAP policy.

The following new or expanded items must be included in a school's SAP policy:

  1. Treatment of transfer credits
  2. A description of financial aid warning and probationary statuses and how they are used, if applicable
  3. A description of the appeal process, if applicable, including the basis on which a student may file an appeal, and the information the student must submit with the appeal, including a description of what has changed that will allow the student to make SAP
  4. A notification to students of the results of an evaluation that impacts the student's Title IV eligibility

 

Publication Date: 11/12/2010

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