Upcoming Changes to Books and Supplies Provisions Expand Access to Credit Balances

By Debra LaGrone, Training & Regulatory Assistance Staff

At the recent Federal Student Aid (FSA) Conference in Las Vegas, the U.S. Department of Education (ED) reviewed the following changes to the cash management regulations relating to books and supplies that become effective on July 1, 2016.

Under 34 CFR 668.164(c)(2), schools are allowed to credit a student’s ledger account with Title IV funds to pay for books and supplies that are included as part of tuition charges without obtaining the student’s or parent’s authorization under certain conditions. If the school:

  • Has an arrangement with a book publisher, or other entity that makes books and supplies available to students at costs that are lower than the competitive market rate;
  • Provides a means to student to obtain books and supplies by the seventh day of the associated payment period; and
  • Has a policy that allows a student or parent to decline or opt out using the school provided means to obtain books and supplies.

Additionally, books and supplies costs may be included if:

  • The books and supplies are not available elsewhere or assessable to students through other sources not provided by the school; or
  • There is a compelling health or safety reason for the school to provide the books and supplies directly to the students.

Schools should also be aware that under 34 CFR 668.164(m)(1), all Title IV recipients, not just those eligible for a Federal Pell Grant, must be provided a way to purchase books and supplies by the seventh day of a payment period if, 10 days prior to the start of the payment period:

  • The school could disburse Title IV funds to a student who is eligible; and
  • If Title IV funds were disbursed, the student would have a credit balance once the allowable institutional charges have been satisfied.

For additional information regarding these and other changes to the cash management regulations, please see the new rules published in the October 30, 2015 Federal Register.


Publication Date: 12/15/2015

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