Posted Date: January 23, 2012
William Leith, Service Director, Program Management, Federal Student Aid
Subject: Reminder - Deadline for 2012-2013 Underuse Penalty Waiver for the Campus-Based Programs is February 10, 2012
As announced in the “Notice of the 2011-2012 Award Year Deadline Dates for the Campus-Based programs,” published in the Federal Register February 2, 2011 (76 FR 5787), the deadline to request a waiver of the 2012-2013 Award Year penalty of Federal Work Study (FWS) and Federal Supplemental Educational Opportunity Grant (FSEOG) for the underuse of 2010-2011 Award Year funds is February 10, 2012.
A school can determine if it is subject to an underuse penalty by reviewing its Campus-Based Tentative Funding Worksheet for 2012-2013. If a school received an underuse penalty, and it has a valid justification for having more than a 10 percent underuse of FSEOG and/or FWS funds in 2010-2011, the school should review its FISAP data in order to determine if it needs to request an underuse penalty waiver. A waiver may be granted only if the school is able to show that the underuse was due to circumstances beyond the school’s control and those circumstances are not expected to recur.
The request and justification for the waiver of the underuse penalty must be submitted electronically by 11:59 P.M. (ET) on February 10, 2012. Transmission must be completed and accepted by 12:00 midnight to meet the deadline. Paper submissions will not be accepted.
How to Determine if There is an Underuse Penalty on the Tentative Funding Worksheets
As explained in a January 19, 2012 Electronic Announcement, Campus-Based Tentative Funding Worksheets for 2012-2013 will be posted to the eCampus-Based (eCB) website by February 1, 2012. If a school failed to expend more than 10 percent of its 2010-2011 program allocation(s), an underuse penalty is applied to the 2012-2013 awards and the awards are reduced by the amount that was not expended.
Once the school accesses the worksheets from the eCB website's "Self-Service" page, it will see that the FSEOG Worksheet is at the top of the screen. The FWS Worksheet is below it. The percentage of underused FSEOG funds is shown in the FSEOG Tentative Funding Worksheet at Item 32. Underused Percentage and the tentative FSEOG Allocation Reduction is shown at Item 33. Allocation Reduction. The percentage of underused FWS funds is shown in the FWS Tentative Funding Worksheet at Item 35. Underused Percentage and the tentative FWS Allocation Reduction is shown at Item 36. Allocation Reduction. The full explanation of all the fields in the Tentative Funding worksheet can be found in an attachment to the January 19, 2012 Electronic Announcement.
How to Determine if There will be an Underuse Penalty Prior to Receiving the Tentative Funding Worksheets
To determine if your school is subject to an allocation reduction in its FSEOG funds or FWS funds, review your 2012-2013 FISAP that was due September 30, 2011.
For FSEOG – Determine the underused percentage by dividing the Unexpended 2010-2011 funds in Part IV, Section E, Item 18 by your school’s 2010-2011 FSEOG allocation (Part IV, Section A, Item 1). If that quotient is more than 10 percent, the allocation will be reduced by the Unexpended FSEOG Authorization at Part IV, Section E, Item 18.
For FWS – Determine the underused percentage by dividing the Unexpended 2010-2011 funds in Part IV, Section E, Item 19 by your school’s 2010-2011 FWS allocation (Part V, Section A, Item 1). If that quotient is more than 10 percent, the allocation will be reduced by the Unexpended FWS Authorization at Part V, Section E, Item 19.
How to Request an Underuse Penalty Waiver
A school may request a waiver of the underuse penalty by accessing the school's submitted FISAP on the eCB website and selecting the "yes" button in Part II, Section C, Field 6. Click on "Submit" at the bottom of the menu on the left side of the screen, and then select "Submit Waiver" from the drop down list. On the “Additional Information” screen, the school must explain that circumstances that caused the underuse of its allocation were beyond the school’s control and those circumstances are not expected to recur. The school must also show that it returned the entire underused portion of the allocation to the Department. Enter the information and click the "Submit" button under the justification. When ready to submit the request, click "Continue to Submit." The school will then receive a message indicating the request has been submitted.
What Happens Next
A panel of Department of Education staff members will review the penalty waiver requests and justifications. A school that made a request for a waiver of the penalty will be notified in an e-mail whether the request has been granted or denied.
If the request for waiver is granted, the allocation will be reduced by the unused amount for 2010-2011 but the school will not have an underuse penalty calculated when final awards for 2012-2013 are made.
If the request for waiver is denied, the underuse penalty will be calculated when final awards for 2012-2013 are made.
If you have questions regarding an underuse penalty waiver justification, contact the Campus-Based Call Center at 877/801-7168. Customer service representatives are available Monday through Friday from 8:00 A.M. until 8:00 P.M. (ET). You may also e-mail CBFOB@ed.gov.
Publication Date: 1/24/2012