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Title IV Compliance in Online Courses

A guide for finding Title IV resources and information

What is Title IV Financial Aid?

Title IV financial aid is federal funded aid that includes Pell grants, Supplemental Educational Opportunity Grants, Perkins loans, and subsidized and unsubsidized direct loans. Over 90% of NNU students receive some form of Title IV aid. Distance or online education has specific regulations to be eligible for Title IV aid. For an online course, compliance requires two elements:

  1. Online courses must have instructor-initiated, regular and substantive interaction with students.
  2. Institutions must record the last date of attendance for students who drop, withdrawal, or fail an online course.

Explore this guide to learn more about Title IV regulations the best practices for ensuring NNU remains in compliance with federal standards.

Background on Title IV & Distance Education Regulations

In 2005, the U.S. Department of Education (DOE) expanded the use of Title IV financial aid to include telecommunication courses with the purpose of distinguishing between distance and correspondence courses. Correspondence courses are not eligible for Title IV financial aid, but distance or online courses are eligible. Since the updated regulations, the DOE has increased their attention to the use of Title IV funds for online courses. The purpose is to ensure institutions of higher education are not abusing the use of federal financial aid or misleading students. Title IV eligibility relies on an institutions' fiscal responsibility, state authorization, and accreditation standards.

As a result, federal audits of financial aid, conducted by the Office of the Inspector General (OIG) now includes an examination of online coursework in addition to reviewing financial aid documentation and procedures. The audit consists of validating reporting of the last date of recorded participation for students who earned an "F" or dropped/withdrawal from an online course and evidence of regular and substantive interaction between instructors and students.

Auditor findings could lead to a university repaying financial aid distributed for courses that did not pass the audit. Institutions in gross negligence could lose their eligibility for any federal assistance.

Auditing Process

This auditing process is based on workshop sessions and reports from institutions who have been audited by the Office of Inspector General (OIG) on Title IV regulations for distance education courses. This process is not officially outlined by the Department of Education and may vary but it provides an overview of what an instructor could expect an audit to look like.

  1. Auditors initially identify a sampling of students who received Title IV financial aid and were also enrolled in an online class. This sampling typically includes five classes offered in the last semester.
  2. Auditors review the last date of participation recorded, as needed.
  3. Auditors request access to those five classes and review the instructor's interactions with that student.
    • Most institutions report that auditors reviewed instructors interaction with the student in the discussion boards and assignment feedback.
    • Most institutions report that the auditors only look at that one student and not at the instructor's interaction with the class as a whole.
  4. If auditors find sufficient evidence that regular and substantive interaction is occurring within the first sampling, their audit of classes is complete. If auditors do not find sufficient evidence, they expand their sample size and can look back as far as three years in online classes.
  5. Auditors can report findings on the lack of regular and substantive interaction or failure to keep accurate records of the last date of participation and make recommendations for improvement or penalty.
  6. If an institution has findings in its audit report, the university will have a set amount of time to accept or dispute the findings. 

There are several cases where universities had findings on regular and substantive interaction and were able to provide evidence of interactions that cleared the finding from the final report. In instances were evidence was not provided or the OIG found the evidence insufficient, institutions are penalized by returning Title IV financial aid used in the audited courses. If auditors find the majority of courses did not comply with Title IV regulations, they can revoke an institutions eligibility for Title IV financial aid.

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