In the wake of renewed interest on study abroad issues and the release of the Association of International Educators’ recommendations on managing study abroad programs, NASFAA would like to take this opportunity to review Title IV rules concerning study abroad and to expand the information we provided regarding the cost of attendance (COA) for study abroad for Title IV financial aid recipients discussed in Developing the Cost of Attendance Monograph #20 published last summer.
Among the list of Criteria for the Institutional Management of Study Abroad established by the Association of International Educators are two categories that relate directly to the administration of Title IV programs: adequate resources, and clarity and accountability.
Adequate resources refers to schools establishing financial aid policies, procedures, and fund raising practices that encourage student participation in study abroad, and that control the costs associated with study abroad. Clarity and accountability refers to communicating critical information related to study abroad to all stakeholders, establishing clear contracting and auditing procedures, and avoiding conflicts of interests. These criteria are in line with existing Title IV requirements and NASFAA’s commitment to ensuring access to postsecondary education as discussed below.
Institutional Eligibility
An institution must inform students of the availability of Title IV financial aid in the information that it provides about its study abroad program. In fact, the Program Participation Agreement requires that institutions participating in Title IV programs have procedures in place to ensure that an otherwise eligible student participating in a study abroad program receives Title IV financial aid to which he/she is entitled.
Student Eligibility
A student in an eligible study abroad program is eligible to receive Title IV financial aid to cover reasonable cost, as determined by the institution, for the study abroad experience if the study abroad program is approved for academic credit toward the student’s program by the eligible home institution at which the student is enrolled as a regular student. The home institution must have a written consortium or contractual agreement with the foreign institution or with a study abroad organization on behalf of the foreign institution. The home institution may also have a written consortium or contractual agreement with another U.S. institution that contracts with a foreign institution. Lastly, it is permissible for the consortium or contractual agreement to be between two or more institutions; however, the home institution must be located in the United States.
Program Eligibility
A study abroad program is an eligible program if students studying abroad remain concurrently enrolled at their eligible home institution and the eligible home institution awards academic credit for the study abroad experience. It is important to note that while the study abroad program must be considered a part of the student’s eligible program, it does not have to be a required part of the student’s eligible degree program in order for the otherwise eligible student to receive Title IV aid to cover the cost associated with the study abroad experience. In other words, the study abroad program can be an elective approved for credit by the home institution as long as the credits are accepted towards graduation in the student’s program by the home institution.
Cost of Attendance (COA)
The law allows the inclusion of reasonable costs, as determined by the institution at which the student is enrolled, associated with study abroad to be included in the student’s cost of attendance. Some examples of these costs include but are not limited to transportation costs to and from the place of study; administrative fees charged by the institution or coordinating agency; and additional cost for tuition and fees, room and board, and other relevant charges that exceed those costs assessed by the home institution.
Bear in mind that the derivation of the cost of attendance associated with a study abroad program requires considerable coordination between all institutions and agencies involved to ensure that the student’s cost of attendance does not double-count any expenses.
It is important to note that only the tuition and fee charges associated with the credits for which the student will be enrolled can be included in the student’s cost of attendance. For example, if the student is enrolled in three credits of Arabic which will be accepted and counted towards the student’s foreign language requirement at the home institution, you can only count the tuition and fees associated with the three credits once in the student’s cost of attendance. On the other hand, students enrolled in study abroad programs with costs of attendance exclusive of duplicate tuition and fee charges that are higher than those of the home institution should have those costs reflected in the cost of attendance on which their financial aid award is based. This may result in a student being eligible for additional financial aid funds.
Increased Federal Perkins Loan and FSEOG Eligibility, and Federal Work Study for a Preceding Period of Nonenrollment
If the costs associated with a study abroad program exceed the cost of attending the home institution, the student’s Federal Perkins Loan award may exceed the annual and/or aggregate Federal Perkins Loan program loan limits by up to 20%. Similarly, the student’s annual FSEOG award may be increased from $4,000 to as much as $4,400 if the cost associated with a study abroad program exceed the cost of attendance at the home institution. In addition, a student may be employed under the FWS during a period of nonattendance preceding the study abroad experience in an eligible position in the U.S., at the home institution’s branch campus in a foreign country, or a U.S. government facility abroad. The student may be employed in such a position under the FWS program as long as the study abroad experience is a part of the student’s program of study at the home institution and student remains continuously enrolled in the home institution located in the U.S. while abroad.
Loan Counseling
If a borrower participating in the institution’s study abroad program has not previously received a Stafford Loan at that institution, the institution must document that the student has completed in-person or online counseling that meets the requirements of the entrance counseling regulations. As an alternative, the institution may provide entrance counseling materials to its study abroad borrowers via mail prior to releasing the loan proceeds.
Likewise, the institution must adhere to the exit counseling requirements outlined in the regulations. However, as an alternative, the institution may send borrowers written counseling materials within 30 days after the borrower completes the program with a request that the borrower provide the contact and personal information that would ordinarily have been collected during the in-person or online counseling process.
Treatment of Discounts Received
Sometimes under certain circumstances and/or pursuant to terms of a written agreement, an institution may receive a discount on the charges it assessed for its students’ participation in a particular study abroad experience. For example, an institution may receive a 10% discount on the amount of tuition and fees assessed its students if twenty or more students sign up during a particular semester. While the law, regulations, and sub-regulatory guidance are silent on the treatment of such discounts, in the spirit of goal #1 of its 2006-11 Strategic Long-Range Plan to ensure access to postsecondary education, NASFAA recommends as a good practice that the discount be directly or indirectly passed along to students. This may be accomplished by proportionately reducing the tuition and fee cost assessed each individual student for the term(s) for which the discount is received, or reducing the overall cost of the study abroad program which would in turn result reduced costs to students.
It is also important to note that if you have established a policy of using actual charges in the cost of attendance for students enrolled in your institution’s study abroad program, then it is expected that your packaging procedures reflect your policy. In other words, if the tuition and fees, room and board, transportation, and/or other study aboard charges assessed the student are subsequently adjusted because of a discount, then the student’s budget and financial aid should be adjusted accordingly to reflect the change in cost.
By NASFAA Professional Assessment, Training, & Regulatory Assistance Staff. Please submit questions or comments to askregs@nasfaa.org.
Posted 01/24/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.
