March 1, 2011
March Update From PAPSA
A recent update sent by the Pennsylvania Association of Private School Administrators includes a section by Jay Alexander, Certified Public Accountant at Wilke & Associates:
1. EFFECTIVE JULY 1, 2011, schools will probably be prohibited from compensating employees involved in enrolling students or assisting students with obtaining financial aid in any form other than a fixed salary or a fixed hourly wage. Except under very limited circumstances, bonuses will PROBABLY NOT be permitted. Evidently, no other form of compensation will be permitted except, possibly, one raise a year. Justifiable overtime, sick days, paid holidays, and
vacation days, as well as health insurance benefits available to all, would be permitted.
MATCHING CONTRIBUTIONS TO A 401K PLAN that favor these types of employees only because the employees’ salaries or wages are larger than other employees MIGHT BE A PROBLEM. What about Christmas bonuses? That MIGHT BE A PROBLEM.
What employees will be affected by this new rule? At this time it is not entirely clear. However, in order to be on the safe side, it may include:
- Admissions reps, high school reps and admissions directors.
- Financial aid directors and financial aid officers.
- DIRECTORS OF SCHOOLS who either meet with prospective students or who MANAGE the above types of employees.
- PRESIDENTS OF SCHOOLS, STOCKHOLDERS, PARTNERS (of LLP or LLC), etc. who MANAGE the above types of employees. This rule may even include the stockholder of corporation who is the sole owner. Does this include the stockholder of corporation who is the sole owner. Does this include a SOLE PROPRIETOR? Maybe not!
The “SAFE HORBORS” to avoid “prohibited inducement payments in the current regulations will be eliminated. Failure to adhere to these new rules will be termination of a school’s Title IV eligibility.
APSCU has filed suit to block this regulation.
2. The status of the gainful employment regulations is not entirely clear but what is clear is that by October 2011, schools must report certain information to the Department FOR ALL GRADUATES FOR THE LAST THREE and maybe FOUR YEARS. This may be a major undertaking for some schools. Accordingly, although you may be aware of the reporting requirements, you may not have considered the volume of information that must be completed and the amount of time that may be involved. Many schools will need to “staff up” for this.
We believe that some of the information that may be required to be reported includes the following. Additional information may also be required:
- Name of graduate
- Date of graduation
- SIP code for the program
- Cost of attendance
- Amount of FFEL or Direct Loan borrowed by student for the attendance
- Amount of alternative loans that student obtained
Where might you start? Possibly with the NSLDS records although these will also include student withdrawals.
3. In accordance with HEA Reauthorization, by October 29, 2011, every Title IV participating school must post a net price calculator on its website that is to provide estimated net price information to current and prospective students of the cost of attendance at your school. This estimate is to be based on each individual’s circumstances. To assist schools in meeting this obligation, The National Center for Education Statistics, in cooperation with the Department of Education, is making available, without cost, a fully functional net price calculator for use on your school’s website.
To use or review the template, go to: http://nces.ed.gov/ipeds/netpricecalculator/.
There are other calculators available that may be purchased from different vendors. In order to obtain the names of vendors, type NET PRICE CALCULATOR in the search bar of your internet home page search engine.