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90-10 Compliance Issues

90-10 Compliance Issues. B. ECASLA $2000: Expires 6-30-11 w/o Extension1. ECASLA $$: Part or all of extra $2000 beyond regular unsub loan amount, non-T4 treatment 2. Payment Period : actual disbursements in payment period (PP) compared to what would have been made w/o $2000 ECASLA unsub $$3. M

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90-10 Compliance Issues

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    1. 90-10 Compliance Issues A. GAO October 2010 Report: 2003-2008 FP growth 83% enrollment, 210% T4 Average T4% FP schools – 66% by 2008 7 schools failed; 15% all FP over 85% 2-16-11 DOE Report: 8 over 90%, 257 over 85% 1

    2. 90-10 Compliance Issues B. ECASLA $2000: Expires 6-30-11 w/o Extension 1. ECASLA $$: Part or all of extra $2000 beyond regular unsub loan amount, non-T4 treatment 2. Payment Period : actual disbursements in payment period (PP) compared to what would have been made w/o $2000 ECASLA unsub $$ 3. Meeting 90/10 w/o ECASLA?? * Pro forma calculation *Increase tuition to create ‘gap’ not covered by T4 ? *Increase institutional loans (grad forgiveness?) 2

    3. 90-10 Compliance Issues C. Title IV Ineligible Program (length/type): revenue includible in 90-10 denominator if program: (1) is licensed/approved by state licensing agency; OR (2) is accredited by a DOE recognized agency; OR (3) leads to industry recognized credential or prepares student for exam to obtain credential; OR (4) provides state required update training (CEU) for maintaining licensure, OR (5) provides specialized training for additional or advanced licensure within a vocational field.

    4. 90-10 Compliance Issues D. Institutional Loans: 1. Period: 7/1/08 to 6/30/12 2. Loan – NOT installment payments under enrollment agreement or tuition billing plan 3. Need formal elements: (A) Written enforceable promissory note: need fixed maturity; probably need to charge interest (B) Loans made at regular enrollment intervals – not year end (C) Regular loan repayments/collections (beware quick or high % write-offs) 4

    5. 90-10 Compliance Issues E. Qualifying Institutional Scholarships (cash/discount) 1. Restricted special account maintained by institution 2. Published grant criteria focused on academic merit and/or financial need * Written applications * Written award letters * Regular cycles – i.e., not year end 3. Funds in account must be from: (i) outside sources – not institution or affiliates (employees & shareholders), or (ii) income earned on such funds 5

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