The U.S. Department of Education (ED) issued an announcement to clarify the regulatory requirements for all institutions of higher education (IHEs) that identify as public institutions for purposes of the Title IV federal student aid programs.
Federal regulations under § 34 CFR 668.171(b) and § 34 CFR 668.171(g)(1) outline the requirements for IHEs to demonstrate financial responsibility, including the specific documentation needed for public institutions. This documentation must
- be a dated letter on official government entity letterhead;
- state that the school is a public institution;
- state that the school is backed by the full faith and credit of the government entity, without qualification; and
- be signed by an authorized representative of the government entity.
“Full faith and credit” refers to a binding commitment by a government entity to assume responsibility for the institution’s financial obligations, including debts and liabilities associated with participation in the Title IV programs. This may include the use of the entity’s revenue sources or authority to satisfy unpaid institutional liabilities.
ED expects all public institutions to meet the regulatory standard for documentation of public status as noted above and to maintain required documentation on file at the IHE. Required documentation may be requested by ED as part of program reviews, recertification of applications, or other processes.
Moving forward, institutions are no longer required to submit public status documentation in eZ-Audit unless specifically requested by ED.
Public Status Letters Submitted to ED
If an institution has already submitted public status documentation in eZ-Audit, ED will review the submission and send a formal response. If an institution’s submission does not meet the four requirements noted above, ED will notify the institution of the specific missing elements. ED will assume that the institution is working with its official government entity to correct the documentation and will expect the institution to have compliant documentation on file and available should ED request it in the future.
IHEs are encouraged to review the previously published Financial Responsibility Regulations – Questions and Answers (FR-Q7, FR-Q8, and FR-Q9).
For questions about documentation of public status for IHEs, contact CaseTeams@ed.gov.