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AwardYear: 1995-1996 EnterChapterNo: 8 EnterChapterTitle: Federal Supplemental Educational Opportunity Grant Program SectionNumber: 3 SectionTitle: Program Funds PageNumbers: 11-14 The Higher Education Act of 1965, as amended, describes the allocation process in detail; those procedures are not repeated in the regulations for the FSEOG Program. Funds are allocated directly to schools according to the statutory formulas. Schools receive their disbursements in periodic installments, either in advance or as reimbursements. ED REALLOCATES funds to a school in a manner that best carries out the purposes of the FSEOG Program. [[Final Rule 12-1-94]] A school must maintain funds received for its FSEOG Program in accordance with the cash management provisions of the General Provisions Final Rule published in the Federal Register on December 1, 1994. The provisions are effective beginning July 1, 1995 and are discussed in Chapter Three, Section Three. [[Final Rule 11-30-94]] As discussed in the Introduction to Chapter Five, if a school returns more than 10 percent of its allocation for a given award year, ED will reduce the school's allocation for the second succeeding award year by the dollar amount returned (refer to Section 676.4(f) of the Final Rule published in the Federal Register on November 30, 1994). ED may waive this provision for a specific school if it finds that enforcement would be contrary to the interest of the program. ED considers enforcement to be contrary to the interest of the program only if the school returned more than 10 percent of its allocation due to circumstances that are beyond the school's control and are not expected to recur. The information a school provided on its FISAP for the 1993-94 award year will determine the amount of reduction, if any, of the school's allocation for the 1995-96 award year. FEDERAL SHARE AND NON-FEDERAL SHARE [[Federal share is 75%]] [[Non-federal share is 25%]] The federal share of FSEOG awards made by a school may not exceed 75 percent of the total FSEOG awards made by the school for the 1993-94 and subsequent award years. The school must contribute a non-federal share (also called "institutional share") of 25 percent. However, ED may waive the non-federal share requirement and may authorize a federal share of 100 percent for an award year for a school that is designated as an eligible institution under the Strengthening Institutions program or the Strengthening Historically Black Colleges and Universities program if the school requests the increased federal share on the FISAP for that award year. [[Sources of non-federal share]] The non-federal share of FSEOG awards must be made from the school's own resources. These resources may include-- - institutional grants and scholarships; - waivers of tuition or fees; - state scholarships; and - funds from a foundation or other charitable organization. [[Non-federal share may include all state scholarships except SSIG]] ED has determined that all state scholarships and grants, EXCEPT for State Student Incentive Grants (SSIGs), are eligible funds that may be used to meet the non-federal share requirement of FSEOG awards. SSIG awards, for this purpose, are defined as the federal SSIG allocation plus the state required dollar-for-dollar matching amount. The remaining state grants are considered non-SSIGs. "Dear Colleague" letter CB-94-21, issued in August 1994, provided a chart of percentages to indicate the portion of state scholarships in each state that could be used to provide the non-federal share of FSEOG awards for the 1994-95 award year. A similar chart for the 1995-96 award year will be issued in a future "Dear Colleague" letter. The 1995-96 non-federal share requirement of 25 percent (unless the school qualifies for a waiver) may be met by one of three methods. In the discussion of the three methods that follows, it should be noted that, in order to meet the definition of an "FSEOG recipient," some portion of the grant awarded a student must have come from the FSEOG federal dollars. Also, at any point in time during the award period, when the FSEOG awards are disbursed, the required match must have been accomplished. That is, the school's own resources must have been disbursed prior to or at the time the federal dollars are disbursed. However, it is important to note that outside resources (i.e., state scholarships and foundation or other charitable organization funds) can be used to match FSEOG awards, even though funds are received at a later date, provided that the school has written information on an award from the non- institutional agency or organization to the student involved. The written information must be kept on file at the school. [[Three methods of meeting institutional share]] The three methods by which a school may meet its non-federal share are: 1. Individual FSEOG recipient basis--the school would provide its share to an individual FSEOG recipient together with the federal share; i.e., each student's total FSEOG award would consist of 25 percent non-federal resources and 75 percent federal dollars for the 1995-96 award year. 2. Aggregate basis--the school would ensure that the sum of all funds awarded to FSEOG recipients in the 1995-96 award year would consist of 75 percent federal FSEOG funds and 25 percent non-federal resources. For example, if a school awards a total of $60,000 to FSEOG recipients in 1995-96, it would have to ensure that $45,000 was federal FSEOG funds and $15,000 was non-federal resources; if there were 100 FSEOG recipients, the entire $15,000 non-federal resource requirement could be met by the awarding of a total of $15,000 in non- federal resources to four FSEOG recipients. However, each FSEOG recipient must have received some federal FSEOG funds. 3. Fund-specific basis--the school could establish an "FSEOG fund" into which it deposits federal FSEOG funds and the required 25 percent non-federal share. Awards to FSEOG recipients would then be made from the "fund." ADMINISTRATIVE COST ALLOWANCE When a school calculates its administrative cost allowance for the 1995-96 award year, the school is to include in its calculation the full amount of its FSEOG awards--both the 75 percent federal share and the required 25 percent non-federal share. However, a school that chooses to provide more than a 25 percent institution share to FSEOG recipients may not include an FSEOG institutional share in excess of 25 percent in its FISAP or in the calculation of its administrative cost allowance. If a school has been granted by ED a waiver of its required non-federal share, that school's administrative cost allowance may be calculated only on the full federal portion. For additional information about the administrative cost allowance, refer to Chapter Five, Section Three. TRANSFER OF FUNDS FROM FSEOG PROHIBITED The Higher Education Amendments of 1992 prohibit the transfer of FSEOG Program funds to any other program. Therefore, for 1993- 94 and subsequent award years, FSEOG funds may no longer be transferred to the FWS Program. However, a school may transfer up to 25 percent of its FWS allocation and 25 percent of its Federal Perkins Federal Capital Contribution (FCC) allocation to the FSEOG Program. [[Final Rule 11-30-94]] Nevertheless, a school that transfers funds to the FSEOG Program from the FWS Program during an award year must transfer any unexpended FSEOG funds BACK to the FWS Program at the end of the award year (refer to Section 676.18 of the November 30, 1994 Final Rule). The same requirement exists for Federal Perkins Loan FCC funds transferred to the FSEOG Program (Section 674.18 of the Final Rule).

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