The Department of Education has published several technical corrections to its updated cash management regulations, which take effect July 1.
In the Federal Register in April, ED noted that one requirement is effective September 1, another on July 1, 2017, and two in September 2017. ED also announced that several amended regulations can be implemented early: Section 668.2(b) (Retaking Coursework); Section 668.163(a)(1) (Depository account); and Section 668.163(c) (Interest-bearing depository account).
To assist institutions in determining when the various provisions take effect, NACUBO and Tuition Management Systems have created a compliance timeline and checklist.
The final rules, published on October 30, 2015, established two types of arrangements institutions may have with banks and third-party servicers. Tier One (T1) arrangements are those between and institution and a third-party servicer where the servicer "performs one or more of the functions associated with processing direct payments of Title IV funds on behalf of the institution" and offers one or more financial accounts under the arrangement, or markets an account to students itself or through another entity.
Tier Two (T2) arrangements are defined as those between an institution and a bank under which accounts are offered and marketed directly to students.
The rules originally required the personally identifiable information (PII) an institution shares with a T1 provider to be used only for activities that support making direct payments of Title IV funds [§668.164(e)(2)]. Recognizing that institutions and third-party servicers make other types of payments to students, ED has corrected the regulation to allow PII to be shared for the purpose of making any payment to a student.
Additionally, ED clarified that for T1 arrangements, while institutions must post the arrangement's contract and certain contract data on its website, institutions must also provide the agency with a URL for the contract as well as the data. The published regulations had neglected to require institutions to submit contract data to ED.