The Department of Education (DOE) has released a new Q&A document regarding its Program Integrity and Improvement final rules governing the disbursement of Title IV funds. The Q&As were developed in response to inquiries the agency received after the final rule was published in October 2015 and are meant to assist covered institutions in the run-up to the rule going into effect on July 1, 2016, according to the DOE. Topics covered in the Q&As include issues related to cash management, such as specific requirements for Tier One and Tier Two arrangements, the student choice, fee limitations, disclosures, books and supplies, and confirming student eligibility.
The DOE’s final rule prohibits institutions from requiring students or parents to open a certain account in which to have their student aid funds deposited. Schools also are banned from charging “excessive and confusing” fees and must ensure students or their parents have access to the account through a surcharge-free national or regional ATM network with ATMs on or near each school location. Critics of the rule—including the Network Branded Prepaid Card Association—have expressed concerned that the DOE’s regulation of financial services products goes beyond the scope of its statutory authority and may lead to other regulatory agencies without the necessary financial services expertise to follow suit.
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