NASFAA recently conducted an analysis of fiscal year (FY) 2014 and FY15 U.S. Department of Education (ED) program reviews to determine the total and average amount of fines, as well as the average number of findings per institution. The average number of findings per institution was just under two for both years and the average amount of fines per institution was $193,042 in FY14 and $188,968 in FY15. In comparison, the average number of findings yielded a low figure to show that even one finding can produce a costly fine. Lastly, almost 50 percent of schools that received a program review for FY14 and FY15, with viewable reports, received a fine from ED.
Over 40 institutions for FY14 and FY15 were referred to ED’s Administrative Actions and Appeals Service Group (AAASG) as a result of a program review. This group does an additional, more extensive review of the institution's compliance with Clery Act reporting, consumer disclosures, and campus crime statistics, and assigns additional fines based on their review. In a recent letter to an institution, the Department stated that they “may impose a fine of up to $27,500 for each violation” as referenced in 34 C.F.R. 668.84. Most schools that were referred to the AAASG in FY14 and FY15 had at least two of the issues mentioned previously.
|Reviews with Reports||149|
|Reviews without Reports||36|
|Total Number of Reviews||185|
|Total Sum of Fines||$28,570,245.19|
|Average Fine Per Institution||$193,042.20|
|Average Number of Findings Per Institution||1.7|
|Schools with Documented Fines||66; 44% out of reviews with reports|
|Number of Schools with a Program Review and a NASFAA Standards of Excellence Review||4|
|Reviews with Reports||96|
|Reviews without Reports||28|
|Total Number of Reviews||124|
|Total Sum of Fines||$18,140,925.16|
|Average Fine Per Institution||$188,967.97|
|Average Number of Findings Per Institution||1.9|
|Schools with Documented Fines||45; 47% out of reviews with reports|
|Number of Schools with a Program Review and a NASFAA Standards of Excellence Review||5|
NASFAA’s Standards of Excellence (SOE) Review program - which relies on peer-led reviews - has found similar results. Of course SOE reviews are strictly confidential and give schools time to correct any compliance issues before a federal program review.
Our analysis shows that the average fine amount per institution is seven times greater than the cost of an SOE review. For new aid directors in particular, an SOE review at the outset of your tenure can help identify challenges early and help you develop a plan for any course corrections.
Schools interested in learning more about SOE should email firstname.lastname@example.org or fill out this short information form and the SOE Coordinator will be in touch with additional information.
*Not all reports in FY14 and FY15 were publicly viewable and therefore, were not used in calculating the statistics.
Publication Date: 9/30/2015