Regulatory changes made last fall have prompted numerous requests for clarification from ECG clients.  One of the most frequent requests we have received concerns the changes made regarding the use of Title IV funds to pay a balance from a prior aid year.  Below please find a helpful summary of the changes and how they affect your processes.

Effective July 1, 2008, Title IV funds may be used to pay minor prior year charges up to a maximum of $200.  The new regulations have two effects:  1) they change the maximum amount from $100 to $200; AND 2) they remove the exception that previously allowed schools to use funds in excess of the allowable amount as long as doing so would not prevent the student's current year charges from being paid.  The new regulations narrow the use of prior year funds by setting an absolute maximum dollar amount of $200.

Schools must still obtain written authorization from students (or parents, in the case of PLUS) to apply the funds to the prior year; and a separate authorization must still be obtained to use the funds to pay allowable charges other than tuition, mandatory fees, contracted room, and board.

The $200 maximum is part of the final regulations published on October 29 and November 1, 2007, and may be found in 34 CFR 668.164(d)(2).