Within the ever changing landscape of higher education, more and more colleges are developing hybrid programs in order to attract and retain a population of students who might otherwise not attend. One of those aforementioned hybrid programs is the dual degree program. The dual degree program is a graduate program into which students are accepted with or without a previous baccalaureate degree. Although this type of program is exciting to the admissions office and prospective students, it can be a challenge for the financial aid administer.
According to federal regulations, a graduate/professional student is enrolled in a program that is above the baccalaureate level or leads to a first professional degree, has completed the equivalent of at least 3 years 1 of full-time study at an institution of higher education (either before entrance to the program or as part of the program itself), and is not receiving Title IV aid as an undergraduate student for the period of enrollment. Determination of a student’s grade level as that of a graduate student is not based exclusively on the fact that the student was accepted into a dual degree program. It is incumbent upon the institution to determine whether a student admitted to that type of program is a graduate or undergraduate student as this determination affects the amount and type of aid for which the student is eligible.
Proper grade level determination is important for remaining compliant when awarding and disbursing aid for students enrolled in a dual degree program. Three areas of financial aid may be directly affected by the classification of the applicant as either an undergraduate or a graduate student. They are grant eligibility, dependency status, and loan level. Pell, SEOG, ACG and SMART grant eligibility is contingent upon the grade level into which a student is enrolled. A student must be an undergraduate student without a prior baccalaureate degree in order to be eligible for most of the aforementioned federal grant programs. Additionally, ACG and SMART are grade level specific programs requiring the institution to determine the exact grade level of its eligible students.
Furthermore, grade level is one of the criteria that can be used to designate a student as either dependent or independent. Thus if a student is determined to be an independent student by the institution based exclusively on the fact that s/he is enrolled at a graduate student level, then it is vital that the institution properly establish the students grade level as this can directly affect the amount and type of loan for which the student is eligible. If the proper grade level is not established, the institution is likely to over award the student.
For example, the University of Szeged Medical and Pharmaceutical Faculties, a Hungarian institution of higher education, offers a six year medical dual degree program in which students without a previous baccalaureate degree can enroll. 3 This appears to be a common practice in Hungary and becoming more so in the United States. Unfortunately, Szeged incorrectly established all of the students enrolled in this dual degree program as graduate students regardless of whether or not the students met the prerequisite three years of previous study at a secondary institution. This error caused the University to be out of compliance and to over award student loans in the amount of $724,365.
Szeged argued that Hungarian institutions of higher education have never distinguished between graduate and undergraduate students enrolled in these types of programs: thus it was simply following common practice when awarding aid at the graduate level to all students of the program. Further Szeged argued that since the error was brought to its attention by the US Department of Education; it had tightened up its procedures to ensure that it was compliant going forward. Therefore, Szeged request relief from the findings. However, on April 24, 2007, Chief Judge Ernest C. Canellos, siding with the Department of Education, found that the Szeged had over awarded student loans by awarding students federal loans beyond their annual loan limits and was liable for the error. Judge Canellos, adopting ED’s estimated actual loss formula, ordered the College to repay the loan program in the amount of $62,015.31. 4
This case is of significance to the financial aid administrator, as it reveals how important it is to be aware of the risks associated with alternative degree programming. With proper planning, good communication between institutional departments, regulatory expertise, and a well developed policy and process, your institution can avoid findings of non compliance while instituting new and innovative programming.
– – – – – – – – – – – – – – – – – – –
1 Change: The definition of ‘‘graduate or professional student€™â€™ in § 668.2 is amended by using the term ‘‘year’’ instead of ‘‘academic year’’ in paragraph (3).†Summary: Final Rule; Federal student aid programs, 11/1/07 page 62015 at IFAP.ed.gov website.
2 34 CFR 682.204(a)(5), (c)(2), and (d)(5)
3 In the Matter of University of Szeged Medical and Pharmaceutical Faculties, Docket No. 06-33-SP, located at www.ed-oha.org United States Department of Education Office of Hearings and Appeals website.
4 FSA then applied ED’s formula for determining its estimated actual loss that was caused by the violations, resulting in a demand that Szeged return $62,015.31 to ED. See generally, in re Christian Brothers University, Docket No. 96-04-SP, U.S. Depart of Educ. (January 8, 1997).