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«FINAL AUDIT REPORT ED-OIG/A07L0001 February 2014 Our mission is to promote the U.S. Department of Education efficiency, effectiveness, and Office of ...»

-- [ Page 17 ] --

We partially agree with the recommendation. The Office of Postsecondary Education will issue guidance through a Dear Colleague letter, the Federal Student Aid Handbook, or other appropriate communication to remind institutions of higher education that they should develop and use different standard costs of attendance for different categories of students, such as a cost of attendance for students enrolled exclusively in distance education programs that do not include expenses that other categories of students might otherwise incur. The guidance will draw upon the examples cited in the draft audit report that appropriately illustrate how institutions develop different costs of attendance that exclude, for example, an allowance for transportation costs when such costs are not included for an entire category or class of students.

However, we will also reaffirm that, while institutions have the authority to use professional judgment to adjust the cost of attendance, the law limits such discretion to be exercised only on a case-by-case basis to allow for special circumstances, rather than circumstances that exist across an entire category or class of students. In addition, any such adjustments must be documented in the student’s file.

FINDING NO. 4 – FSA Could Improve Its Monitoring of Schools’ Compliance by Targeting Its Reviews on High-Risk Areas RECOMMENDATION 4.1 -- Ensure that the sampling methodology for program reviews includes testing of samples of students selected from specific high-risk areas, such as distance education, identified during its annual risk assessment.

We agree with the recommendation. Federal Student Aid will revise the sampling methodology for program reviews to include testing of samples of students in distance education.

RECOMMENDATION 4.2 -- Analyze the results of program reviews conducted using the 2011 version of the review guide to determine whether program reviews are consistently identifying academic attendance issues related to the distance education environment. If the program reviews are not identifying attendance issues, research why, and, if necessary, revise the guide and provide training to staff.

–  –  –

FINDING NO. 5 – More Useful Data on Distance Education Is Needed to Adequately Assess Risk and Direct Monitoring Efforts RECOMMENDATION 5.1 -- Collect data that helps Department policy makers and program managers better understand the characteristics of the distance education environment; monitor growth in distance education as it relates to Title IV funds, programs, and student population; assess risks specific to the distance education environment; and formulate strategies to address the risks identified.

We agree with the recommendation. Federal Student Aid will review IPEDS data elements related to distance education and send comments and recommendations to NCES/IPEDS for updating data elements, as needed.

RECOMMENDATION 5.2 – Incorporate the data into FSA’s risk assessment process.

We agree with the recommendation. Federal Student Aid will utilize available IPEDS data on distance education to determine how to strengthen Program Compliance’s school risk assessment process.

OTHER MATTERS

The audit identified an additional issue that was not specific to the distance education environment that the Department will address with the respective institutions. The Department will follow up with two institutions, ITT Tech and Liberty University, concerning credit balance authorization forms that were not in compliance with Title IV requirements to obtain the student’s or parent’s authorization to hold Title IV credit balances. In addition, the Department will follow up with the four institutions, ITT Tech, Ivy Tech, Penn State, and Western Governors University, that did not return Title IV credit balances in a timely manner.

Again, thank you for the opportunity to comment on the draft audit report. If you have further questions, please feel free to contact Jon O’Bergh, the OUS liaison for the collective response in this Memorandum, at (202) 260-8568 or by email at jon.obergh@ed.gov.



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