ED Publishes First Annual List of Funds Counted in Upcoming 90/10 Calculations

By Jill Desjean, Senior Policy Analyst

The Department of Education (ED) on Wednesday released its list of federal education assistance funds proprietary institutions of higher education must use to calculate their percentage of revenue from federal sources.

For fiscal years beginning on or after Jan. 1, 2023, institutions must count as federal revenue all sources of education assistance from a variety of programs administered by ED (including but not limited to Title IV student aid), as well as the Departments of Agriculture, Commerce, Defense, Labor, Transportation, Veterans Affairs, and the Nuclear Regulatory Commission.

The list, published for the first time this year and to be released annually moving forward, was necessitated by legislative and regulatory changes made to how proprietary institutions calculate their percent of revenue from federal funds for the 90/10 rule.

The American Rescue Plan (ARP) amended the Higher Education Act (HEA) to expand the types of federal funding that count as federal revenue in the 90/10 calculation. While federal revenue had previously included only Title IV, HEA student aid funds, the ARP requires any “Federal education assistance funds,” characterized as, “Federal funds that are disbursed or delivered to or on behalf of a student to be used to attend such institution,” to be treated as federal revenue — meaning that federal education assistance such as veterans education benefits, which were previously excluded from the 90% federal revenue cap — would now be a part of that calculation.

The Federal Register notice was published in accordance with regulations drafted earlier this year during a negotiated rulemaking committee formed to implement the legislative changes made in the ARP. Despite several areas of concern raised by negotiators, the group ultimately reached consensus on the 90/10 rule.

ED reminds institutions that the federal funds list is not exhaustive because the statute requires institutions to include all federal education assistance funds in the numerator of their revenue calculation. As such, if an institution is aware of other federal education assistance funds not included on the list, the institution would also be required to include those funds in its 90/10 calculation.

ED also clarifies that the list applies not just to funds disbursed directly to the institution, but also includes federal funds disbursed directly to the student for purposes of paying tuition, fees, or other institutional charges. Further, the list includes federal funds that may comingle with non-federal funds in a disbursement made by a non-federal public agency, in which case institutions are expected to attempt to determine the federal and non-federal breakdown of grant funds. 

More information on the new 90/10 rule is available in ED’s recently published Questions and Answers document. Follow Today’s News for the latest updates.


Publication Date: 12/22/2022

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