F.R. 4.7 TITLE IV PROGRAM RESPONSIBILITIES

In a letter[1] dated July 11, 2017, Dr. Denise Young requested that Palo Alto College respond to concerns raised by unsolicited information received by the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC), as stipulated by SACSCOC policy.  These concerns raised questions for the SACSCOC Board of Trustees regarding Palo Alto College’s autonomy and the College’s ongoing compliance with six standards of the Principles of Accreditation. This narrative corresponds to Federal Requirement 4.7 (Title IV program responsibilities). Specifically, the SACSCOC Board of Trustees asks that the College address the following:

• Clarify the institution’s role to ensure compliance with the Title IV program responsibilities.

Statement of Compliance: Palo Alto College is in compliance with its program responsibilities under Title IV of the most recent Higher Education Act as amended. Palo Alto College audits financial aid programs as required by federal and state regulations. The case for compliance is structured as follows:

A.   Palo Alto College is in compliance with its responsibilities under Title IV.

B.   Palo Alto College ensures compliance with the Title IV program responsibilities.

A. COMPLIANCE WITH PROGRAM RESPONSIBILITIES UNDER TITLE IV

In compliance with program responsibilities under Title IV outlined in Federal Requirement 4.7, Palo Alto College (Office of Postsecondary Education Identification [OPE ID] number 02341300) meets all audit requirements for Title IV administration in accordance with the 2013 U.S. Department of Education Program Participation [2]Agreement[2] and the April 30, 2013, U.S. Department of Education Approval Notice[3]. The application for Re-Certification extends participation and eligibility to participate in Title IV programs until June 30, 2018.

The scope of coverage allowed by the Program Participation Agreement and Approval to Participate in Federal Student Financial Aid Programs is provided for in the U.S. Department of Education Eligibility and Certification Approval Report[4]  and includes the Federal Pell Grant, Federal Supplemental Opportunity Grant, Federal Work Study, and the Federal Direct Loan Program.

In Fiscal Year 2014 (FY14), the Palo Alto College Board of Trustees contracted with Ernst & Young to perform the annual compliance audits required by the A-133 Circular Section .510(a) and the State of Texas single audit.  In FY15 and FY16, the Palo Alto College Board of Trustees contracted with Grant Thornton to perform the annual compliance audits required by the A-133 Circular Section .510(a), the State of Texas single audit for FY15, and under the Uniform Guidance which replaced A-133 for FY16.  College Districts in the State of Texas have single taxation authority as described in Texas Constitution Article 8 – Taxation and Revenue[5] and report to Federal and State entities as one district; hence, Palo Alto College is part of the Alamo Colleges District annual compliance audits required by federal and state regulations. The Alamo Community College District, the official legal name of the district, was established as a public junior college district through a public election[6] in 1945 and Gov. Code 130.162[7].  The Board of Trustees voted to establish Palo Alto College on February 21, 1983[8] and was chartered by the Texas Legislature on March 19, 1983, the official date of founding. 

Discussed in the District’s annual compliance audits are Palo Alto College’s A-133 Single Audit/Uniform Guidance findings for FY14[9], FY15[10] and FY16[11]. The A-133 Audit/Uniform Guidance findings are evidence of the College’s compliance and are annotated to clarify portions of the audit pertinent to Palo Alto College.  In FY14, the A-133 audit for the College identified one finding[12] related to timely notification to students of direct loan disbursement details, which was considered to be a significant deficiency.  In response, the College implemented more timely and stringent monitoring procedures and reports to strengthen controls over the notification process.  There were no findings identified during the State of Texas single audit for Palo Alto College in FY14.  For the most recent audits for the fiscal years ended August 31, 2016 and 2015, there were no material weaknesses or significant deficiencies identified related to Palo Alto College, and there were zero Student Financial Aid findings in FY16 and FY15.    

The 2014 cohort default rates for the Federal Family Education Loan Program at PAC is the data published for the payment history of the 2011 cohort loans.  The 3-Year School Cohort Default Rate[13] was 13.7% for FY13, 14.4% for FY12, and 18.5% for FY11.  To assist in default prevention, Palo Alto College acquired the services of a professional default aversion company that works with former students who have fallen behind on loan payments, informing them of options for preventing default.

No issues exist with Title IV programs for the institution. The College is not on the reimbursement method for funding, has not been required to obtain a letter of credit in favor of the Department of Education or any other regulatory agency, and has not been informed of any unresolved complaints from the Department of Education. No significant impending litigation exists with respect to financial aid activities, and no adverse communication has been received from the Department of Education.

B. THE COLLEGE ENSURES COMPLIANCE WITH TITLE IV PROGRAM RESPONSIBILITIES

Palo Alto College utilizes the services of the Alamo Colleges District (ACD) Student Financial Aid Office, a division of the Alamo Colleges District Support Operations (DSO). The College and the Student Financial Aid Office operate within the Collaborative Agreement for Student Financial Aid Services[14] between Alamo Colleges District Support Operations and Northeast Lakeview College, Northwest Vista College, Palo Alto College, San Antonio College, and St. Philip’s College of the Alamo Colleges. The description of services includes the responsibility to adhere to federal regulations.

Palo Alto College entered into the Financial Aid Consortium Agreement[15] between the Alamo Colleges District institutions: Northwest Vista College, Palo Alto College, San Antonio College, St. Philip's College. The consortium agreement permits a student’s financial aid to be calculated based on all enrolled hours “as if” they were taken at the home college. Students designate one of the colleges as their “home college.” The home college for financial aid purposes is the college at which a student is admitted into an eligible program of study (1516 FSA Handbook, Volume 2, Chapter 2[16]).  The College is responsible for disbursing funds to students declaring Palo Alto College as the home college; the College is responsible for maintaining information regarding the student’s eligibility.

• Example A: Student A is admitted into an eligible program of study at Palo Alto College. The student is able to take courses at St. Philip’s College, San Antonio College or Northwest Vista College and have those hours count toward enrollment status for financial aid purposes.  A student will be considered full-time if taking a total of 12 or more hours, and a Pell Grant, Federal Supplemental Opportunity Grant or state grants would be calculated at the full-time status.  Palo Alto College would disburse the student’s funds and be responsible for maintaining information on the student’s eligibility.

The basic function of Student Financial Aid is to determine a student’s eligibility for Title IV federal financial aid funds.  To be eligible for these funds, a student must make satisfactory academic progress (SAP), and the school must have a reasonable policy for monitoring that progress.  The Department of Education considers a SAP policy to be reasonable if it meets both the qualitative (grade-based) and quantitative (time--based) criteria.  The standards are required to be cumulative (1617 FSA Handbook, Volume 1, Chapter 1[17]).  No GPA is reported to the federal government as it relates to financial aid.  A student’s SAP evaluation is an institutional determination but must meet the standards above.

The Student Financial Aid Office SAP policy[18] requires a student to maintain a cumulative 2.0 GPA. 

• Example B (Student with transfer coursework all from within the ACD): Student A from the previous example is a full-time student and earns 6 hours of credit from Palo Alto College with a 3.0 GPA.  The student also earns 6 hours of credit from Northwest Vista College with a 2.0 GPA.  The student’s ACD GPA of 2.5 would be used to determine the student’s SAP.  All hours attempted at any of the colleges part of the consortium agreement would be included in the cumulative ACD GPA. 

The student’s completion rate would be greater than the 67% required by policy (attempted 12 hours and completed 12 hours).  All transfer hours attempted and all hours attempted at Palo Alto College and Northwest Vista College are included in the calculation of a student’s quantitative progress. 

When students attend an institution outside the Alamo Colleges District, the attempted and earned hours would be included in the calculation. For example, if the student attempted 12 hours at The University of Texas at San Antonio (UTSA) and earned 6 hours, the overall attempted 12 hours would be included in the calculation.

• Example C (Students with coursework from within and outside the Alamo Colleges District): 

Correspondence with Ms. Kim Peeler, Compliance Manager, Region VI of the U.S. Department of Education confirms that the practice is acceptable. The letter[19] regarding conformation of acceptable practices states that the satisfactory academic progress policy submitted for campus-based programs is an acceptable practice under regulations governing the Title IV financial aid programs.