ED Issues Clarifying Guidance on Financial Responsibility Reporting
In response to questions about implementing the reporting requirements in the new financial responsibility rules, the Department of Education has published a Questions and Answers document related to the borrower defense to repayment final regulations. Under the rules, institutions are required to notify ED of most financial responsibility actions, events, or conditions.
The Q&A affirms:
- Public institutions must comply with the reporting requirements in the 2016 borrower defense to repayment regulations, with certain exceptions.
- Institutions are required to report debts and liabilities arising from a final judgment in a judicial proceeding or from an administrative proceeding or determination, or from a settlement, including settlements reached prior to legal action.
- All litigation, regardless of the type of legal action or the size of the claim, must be reported.
In addition to ongoing reporting, institutions are expected to submit any necessary supplemental reporting that results from the Q&A within 10 calendar days of the date the information was posted (June 3, 2019). Thus, the deadline for this new reporting is June 13, 2019.
NACUBO’s Advisory Report 2018-05: Changes to the Department of Education’s Financial Responsibility Standards for Nonprofit Institutions has been updated to reflect the Q&A document. ED plans to update the Q&A on an ongoing basis, and NACUBO will update the advisory as needed.
Senior Director, Accounting Policy
Vice President, Policy and Research