Last week, NASFAA published details of a new law — set to go into effect Aug. 1, 2021 — that includes several institutional disclosure requirements, some of which involve the financial aid office.
NASFAA recently had the opportunity to engage with officials at the Department of Veterans Affairs (VA), which shed some light on how schools can comply or may already be complying with Section 1018 of the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020 (Isakson/Roe). As a reminder, institutions who are not able to comply with the Section 1018 requirements prior to the effective date should submit a waiver application by Aug. 1, 2021.
Broadly, it appears that VA views the law as codification of the Principles of Excellence Executive Order, despite some discrepancies in language between the two. This is positive news for schools that already voluntarily participate in Principles of Excellence, since that would imply that VA does not see Isakson/Roe as placing additional disclosure requirements on institutions but, rather, simply requires all institutions to adhere to the disclosure requirements that Principles of Excellence participants already adhere to.
VA officials also addressed several specific issues NASFAA raised in last week’s article pertaining to impacts of the law on the financial aid office itself.
NASFAA had previously noted the requirement for institutions to disclose projected costs for the duration of the student’s program of study, and the fact that the College Financing Plan (CFP) reflects only annual costs. VA officials confirmed this requirement to disclose costs for the duration of the entire program of study was also required by Principles of Excellence. VA officials also confirmed that they are aware of the inconsistency between the CFP’s disclosure of annual costs and the Principles of Excellence (and now, Isakson/Roe) requirement for program duration costs, and will continue to work with the Department of Education to address this issue, as well as the fact that there is no field on the CFP for institutions to include the amount of students’ VA educational benefits.
In the meantime, VA is relying on institutions to develop their own best practices to comply with the requirement to disclose total, multi year program costs. Because the CFP contains only annual estimates, providing students with the CFP alone is insufficient to comply with the law’s requirement to disclose program-length estimates of cost and aid. VA has not given detailed guidance on how program-length disclosures must be provided, and suggested that institutions should determine what additional information to provide in addition to the CFP in order to explain to students how the annual estimates on the form translate to full program costs and aid.
NASFAA believes that one practicable way for institutions to achieve this could be to provide students with an addendum that contains instructions on how the CFP’s annual figures can be used to estimate costs for the full length of a program. For example, the addendum might instruct a student to multiply the CFP figures by the number of years in the student’s program to get an estimate of their total program cost. Alternatively, institutions could provide students with a multi-year tuition estimate based, for instance, on historical rates of tuition increase.
Institutions should work with legal counsel to determine whether to include any disclaimer language stating that the estimates of future costs and aid eligibility are subject to change based on a number of factors that cannot be reliably predicted in advance. Institutions may want to make clear that unforeseeable variables could result in a student’s actual costs and aid eligibility being higher or lower than the program-length estimates provided in the disclosure.
VA implied that it does not expect institutions to necessarily have the ability to project future costs with complete accuracy, and that reasonable estimates would likely pass muster. NASFAA’s understanding is that schools are expected to provide estimates of cost and aid eligibility that are based on the best information currently available to the institution at the time the disclosure is made, and any anticipated changes in future years or other information schools are already aware of that will impact a student’s future costs or aid eligibility should be included in the disclosure. However, institutions that knew how much their costs would increase over the duration of the student’s program and who did not accurately disclose those changes (such as cases where state laws dictate annual tuition increases or where an institution has already determined tuition increases for future years) would likely be found to be out of compliance.
Related to discrepancies between Principles of Excellence, Isakson/Roe, and the CFP, NASFAA requested clarification from VA about reference to “a form” that discloses such data as total program costs, student outcomes like graduation rates, and estimated debt upon graduation, among other things, considering the fact that the CFP contains none of this information. VA officials confirmed that it is acceptable for institutions to provide a separate form for these disclosures since the CFP does not allow for them.
Additionally, Isakson/Roe includes a provision that is not part of Principles of Excellence, requiring the financial aid office to maintain policies to alert students of their non-VA federal aid before packaging loans or arranging alternative financing options. NASFAA has stressed in letters to Congress that this will essentially require institutions to package student veterans twice, and would result in two separate financial aid notifications, one listing only grant aid, and the other adding loans to grants. VA officials have confirmed that use of the CFP is sufficient to comply with this requirement since the CFP lists grant aid prior to loans on the form.
VA officials were clear that they cannot issue guidance indicating that schools that are already in compliance with Principles of Excellence are, consequently, also compliant with the provisions of Isakson/Roe. Institutions must still read the law carefully and determine on their own whether their compliance with Principles of Excellence constitutes compliance with Isakson/Roe.
As a reminder, institutions that are not able to satisfy the Section 1018 requirements by August 1, 2021 should apply for a one-year waiver by the same date. The Veterans Benefits Administration (VBA) sent an email to school certifying officials in mid-July with additional information on the waiver request process. The email indicated that schools should select one of three justifications provided for requesting a waiver, and stated that institutions would be notified of waiver approval or denial within 60 to 90 days after August 1, 2021. The VBA guidance also indicated that no adverse action would take place while waiver applications were pending, but institutions whose waivers were ultimately denied would be referred to the state approving agency and a caution flag would be added to the GI Bill comparison tool.
NASFAA will continue to seek additional clarification from VA on how institutions can comply with Section 1018, and encourages financial aid administrators to connect with their VA school certifying officials and legal counsel to ensure that their institution has either come into compliance with the disclosure requirements or submitted a waiver application by August 1, 2021. NASFAA, along with several other higher education organizations, will also continue its ongoing advocacy effort to ask Congress to address problematic parts of the law. Keep an eye on Today’s News for updates.
Publication Date: 7/27/2021