This guidance is intended to answer questions that the public has presented to the Department regarding the new 90/10 regulations. 

Questions on this topic are divided into the following categories: 

- 90/10 General Questions (90/10)
- Ineligible Programs (IP)
- Comingled Federal and State Funds (CFSF)
- Income Share Agreements (ISA)
- Enrollment Limitations (EL)
- Exiting Title IV Programs (ETIVP)
- Disbursement Rule (DR)
- Subsequent Fiscal Years (SFY)
- Related Entity (RE)

If you do not see the answer to your question here, you can email 90_10@ed.gov. The Department will provide more student focused information at http://studentaid.gov/. 

**90/10 General Questions**

90/10-Q1: What fiscal years do the new 90/10 regulations apply to? 

90/10-A1: The new regulations apply to fiscal years starting on or after January 1, 2023. [Guidance issued 4/24/23] 

90/10-Q2: An institution is aware of Federal funds that are not included in the Federal Register notice that outlines Federal education assistance funds to include as Federal Revenue (87 FR 78096). Is the institution required to include those funds in its 90/10 calculation? 

90/10-A2: Yes, except in cases where the Federal funds are specifically awarded directly to students to cover charges other than tuition, fees, or other institutional charges. See 34 C.F.R. § 668.28(a)(1). As discussed at 87 FR 78096: “If an institution is aware of Federal education assistance funds not included on this list that were provided either to the institution or directly to a student to cover tuition and fees or other institutional charges, the institution must obtain the necessary information to account for those funds in its 90/10 revenue calculation.” [Guidance issued 4/24/23] 

90/10-Q3: When would the liability described in 34 C.F.R. § 668.28(c)(5), which states that an institution is responsible for repaying any Title IV, HEA program funds disbursed after the last day of the fiscal year it becomes ineligible to participate in the Title IV, HEA program, excluding any funds it was entitled to disburse, apply? 

90/10-A3: The liability begins on the first day of the fiscal year immediately following an institution’s second consecutive 90/10 failure. See 87 FR 65455. [Guidance issued 4/24/23] 

90/10-Q4: Can an institution include revenue from non-institutional charges, such as charges for additional materials or a replacement student ID, in its 90/10 calculation? 

90/10-A4: No. Institutions are prohibited from including costs for materials that are not assessed as tuition, fees, or other institutional charges in their 90/10 calculation. See 34 C.F.R. § 668.28(a)(6)(v). Institutions should reference the latest Federal Student Aid handbook for guidance on what charges can and should be assessed as institutional charges. [Guidance issued 4/24/23] 

**Ineligible Programs**

IP-Q1: If an institution has developed a new program that is approved by a State licensing agency and its accrediting agency but not by the Department, can the cash payments from that program be included in the 10 side of the 90/10 calculation? Likewise, in what instances can institutions count revenue generated from programs that provide Continuing Education Units and are approved by the relevant State agency? 

IP-A1: The institution can count revenue from an ineligible program if it meets the criteria described in a, b, c, and d below: 

- The program does not include any courses offered in a Title IV eligible program. This also means that the courses in the ineligible program cannot transfer or be applied to a Title IV program if the institution wants to include revenue from the ineligible program in its 90/10 calculation. In addition, courses in an ineligible program that require participation in or completion of a Title IV program at the institution as a requisite for taking the ineligible course cannot be included.
- The program is provided by the institution and taught by the institution’s instructors, which means instructors that are employed by the institution, not 1099 contractors or any other contract arrangement for instruction. Further, the program must be taught at the institution’s main campus or one of its approved additional locations, at another school facility approved by the appropriate State agency or accrediting agency, or at an employer facility. This excludes fully distance education programs or programs offered in-part through distance education. 
- The program must meet at least one of the below requirements: 
Be approved or licensed by the appropriate State agency; 
Be accredited by an accrediting agency recognized by the Secretary under 34 C.F.R. part 602; 
Provide an industry-recognized credential or certification; 
Provide training needed for students to maintain State licensing requirements; or 
Provide training needed for students to meet additional licensing requirements for specialized training for practitioners who already meet the general licensing requirements in that field. 

- Finally, institutions are prohibited from including in their 90/10 calculation revenue from either eligible or ineligible programs where they merely provide facilities for test preparation courses, act as a proctor, or oversee a course of self-study. Revenue from proctoring entrance exams for enrollment in a Title IV program cannot be included. [Guidance issued 12/16/22; technical edit 4/24/23] 

IP-Q2: Can institutions count revenue from non-Title IV eligible programs that are part of a Title IV eligible program but can also be offered as a stand-alone program? 

IP-A2: No. As 34 C.F.R. § 668.28(a)(3)(iii) states, institutions can only count revenue from ineligible programs that do not include any courses included in a Title IV program. Likewise, the program cannot include courses that can be transferred or counted in a Title IV eligible program. In addition, courses in an ineligible program that require participation in or completion of a Title IV program at the institution as a requisite for taking the ineligible course cannot be included. [Guidance issued 12/16/22; technical edit 4/24/23] 

IP-Q3: Can the Department provide more clarity on what it means by ineligible programs cannot include any courses from Title IV eligible programs, if the institution wants to count revenue from that ineligible program in its 90/10 calculation? 

IP-A3: Ineligible programs should not offer courses that are offered in Title IV eligible programs. For example, if a course titled Course 101 is offered in a Title IV eligible program, an institution cannot count revenue from an ineligible program that offers Course 101 or its equivalent. Simply changing the name or numbering of a course when the course content is the same will result in the revenue from the ineligible program not counting for the 90/10 calculation. Further, if courses in the ineligible program are transferred or applied to a Title IV eligible program, no revenue from the ineligible program may be counted as revenue in the institution’s 90/10 calculation. In addition, courses in an ineligible program that require participation in or completion of a Title IV program at the institution as a requisite for taking the ineligible course cannot be included. [Guidance issued 12/16/22] 

IP-Q4: If a student that is enrolled in a non-Title IV program receives non-Title IV Federal education assistance funds, must the institution include those Federal education assistance funds in its 90/10 calculation? 

IP-A4: Yes, institutions are required to include all Federal education assistance funds received by the institution or their students to attend the institution in their 90/10 calculation. [Guidance issued 4/24/23] 

IP-Q5: If an institution uses Federal funds to satisfy charges both for Title IV-eligible courses and courses that are not eligible for Title IV, how should an institution account for the Federal funds applied towards the non-Title IV eligible courses in its 90/10 calculation and reflect this in its end of year audit? 

IP-A5: As set forth in the regulations, institutions must presume in 90/10 calculations that all Federal funds for the fiscal year are first applied to tuition, fees, and other institutional charges for eligible programs. 34 C.F.R. § 668.28(a)(4). Further, institutions are not allowed to intentionally or unintentionally shift Federal funds from programs included in the 90/10 calculation to programs that are not included. [Guidance issued 4/24/23] 

IP-Q6: If an institution offers an ineligible program where students can attend either virtually or in-person and meets all other requirements outlined in 34 C.F.R. § 668.28(a)(3)(iii), can the institution count revenue from that program in its 90/10 calculation? 

IP-A6: No. The ineligible program must be conducted on campus, at a facility under the institution’s control, or at an employer facility. 34 C.F.R. § 668.28(a)(3)(ii)(A). An institution cannot include revenue from an ineligible program where students have the option to take any portion of the program through distance education. This limitation includes making up missed course content via distance education. [Guidance issued 4/24/23; updated 5/31/23] 

IP-Q7: If an institution acquires another institution, can the acquiring institution include revenue from ineligible programs that are offered by the purchased institution in its 90/10 calculation? Should it add those programs to its Electronic Certification Approval Report (ECAR)? 

IP-A7: No. Institutions should not include an ineligible program on their ECAR.

Ineligible programs must meet all the requirements set forth in 34 C.F.R. § 668.28(a)(3)(iii). An institution can only count revenue in its 90/10 calculation from ineligible programs it provides at approved physical locations and that are taught by the eligible institution’s instructors. In order for an eligible institution to include any part of a purchased institution as an additional location of the eligible institution, those locations must be wholly owned by the eligible institution. If the purchased institution and its locations do not meet all of the Department’s requirements to be considered recognized eligible locations of the eligible institution by the Department, no revenue from the programs provided by the purchased institution may be included in the 90/10 calculation. If both criteria for ineligible program revenue to be included in the 90/10 calculation are not met, no revenue from the ineligible program may be included in the 90/10 calculation. [Guidance issued 4/24/23]

**Comingled Federal and State Funds**

CFSF-Q1: Can the Department provide an example or examples of funds provided by a non-Federal Agency that would need to be allocated between State and Federal funds? Will the Department provide a non-comprehensive list of funds that schools should expect to allocate? 

CFSF-A1: The Department issued a list of Federal education assistance funds in the Federal Register on December 21, 2022 (87 FR 78096). States may sub-grant certain funds. The Department will not be including the name of each State sub-grant awarded under the Federal program in the Federal Register notice. [Guidance issued 12/16/22; updated 4/24/23] 

CFSF-Q2: For the examples provided, can the Department provide additional information about the breakdown needed between Federal and State fund sources? 

CFSF-A2: The Department understands that governing statutes may require that States or other non-Federal entities contribute a minimum funding level, but States may choose to contribute more. Further, the amount the State or non-Federal entity is required to contribute may vary by State or territory. Institutions are best positioned to work with the relevant agencies to determine the precise Federal and non-Federal breakdown of funds, and therefore the Department will not be providing this breakdown. [Guidance issued 12/16/22] 

CFSF-Q3: Can you please share with us the Department’s interpretation of how an institution should account for comingled Federal and State funds, how and what an institution must do in order to comply with requirements, and what case-by-case issues can be raised? 

CFSF-A3: If an institution receives funds from non-Federal entities that are comingled with Federal education assistance funds, the institution should reach out to the non-Federal entity to determine the Federal portion of the grant funds. In limited situations where the institution is unable to obtain the breakdown, institutions must exclude the entirety of those funds from their calculation. If an institution cannot determine the breakdown of funds, the Department may evaluate whether the institution sufficiently made an effort to obtain the breakdown on a case-by-case basis. The ARP clearly states that all Federal education assistance funds should be included in the 90/10 calculation, and therefore the Department would scrutinize instances where the institution did not make an effort to obtain the breakdown of funds. [Guidance issued 12/16/22] 

CFSF-Q4: If the institution awards State and Federal comingled funds to a student and later must return those funds to that State agency or take those funds away from the student and re-award them, how should the institution include that in its 90/10 calculation?  

CFSF-A4: For comingled funds returned to the source of those funds, the institution should count the returned funds in the same way it included awarded funds. For example, if funds were 80 percent Federal and 20 percent State funds, then it would determine that 80 percent of the returned funds are subtracted from Federal funds and 20 percent of the returned funds are subtracted from funds applied first. If institutions cannot determine the breakdown of funds, then none of the funds are counted in the 90/10 calculation. See 34 C.F.R. § 668.28(a)(4)(i)(A). [Guidance issued 5/31/23] 

**Income Share Agreements**

ISA-Q1: Can the Department provide more information about what criteria -Income Share Agreements (ISAs) issued by an institution or related party must meet for an institution to include payments made on these agreements in its 90/10 calculation? 

ISA-A1: Institutions can count payments made on ISAs or other alternative financing agreements that are between a student and the institution or party related to the institution, as defined in 34 C.F.R. § 668.28(a)(5)(ii), in their 90/10 calculation if:

- a. The institution clearly identifies the student's institutional charges, and those charges are the same or less than the stated rate for institutional charges; 
- b. The agreement clearly identifies the maximum time and maximum amount a student would be required to pay, including the implied or imputed interest rate and any fees and revenue generated for a related third-party, the institution, or any entity described in paragraph 34 C.F.R. § 668.28(a)(5)(ii) for the maximum time period; and 
- c. The institution applies a portion of the payment to return of capital and a portion to profit to the institution as a result of the ISA. Revenue, interest, and fees associated with the ISA are not included in the calculation. This means that institutions should not include the full amount of payments in their 90/10 calculation because a portion of payments must be allocated to profit, which are not included in the 90/10 calculation. Institutions should have a consistent policy on how they apply return of capital to tuition, fees, and other institutional charges that are eligible for 90/10 and to those that are not eligible.

Further, as institutions are reminded in the preamble to the Final Rule, institutions must apply payments as directed in 34 C.F.R. § 668.28(a)(4). Therefore, depending on how a student funds their program, institutions may not be able to count the full amount of payments allocated to return of capital. 

To provide an example: Student A’s tuition, fees, and other institutional charges are $1500. Student A receives $900 in Federal education assistance. An institution issues a $1000 ISA to Student A. As outlined in 34 C.F.R. § 668.28(a)(4), institutions must presume that Federal education assistance funds are applied to tuition, fees, and other institutional charges prior to other sources of funds. Therefore, the institution can only count $600 of payments allocated as return of capital in its 90/10 calculation because that is what can be applied to tuition, fees, and other institutional charges. As stated above, institutions must count a portion of each payment from the student as a return of capital and a portion as profit. [Guidance issued 12/16/22; technical edit 4/24/23] 

**Enrollment Limitations**

EL-Q1: Can an institution set enrollment limits for the number of students it will admit for that class start based on funding source, such as Title IV, HEA funds or other sources of Federal education funds? 

EL-A1: No, institutions cannot set enrollment limits based on funding source as this is discrimination against Title IV students. Given that the ARP modified the HEA to state that other sources of Federal education assistance funds should be treated like Title IV funds in the 90/10 calculation, the Department extends the prohibition against discrimination against Title IV students to also include other sources of Federal funds. [Guidance issued 12/16/22] 

**Exiting Title IV Programs**

ETIVP-Q1: Can an institution choose to withdraw its participation from the Direct Loan Programs but continue its participation in Pell and SEOG and FWS? If an institution withdraws from the loan programs during the middle of its fiscal year, must it file any special report relating to its Direct Loan Programs participation or can it simply wait until its compliance audit and FISAP are due? 

ETIVP-A1: Yes, institutions choose which HEA programs they participate in. In order to leave the Direct Loan program, institutions would have to provide a close out accounting in their annual audit submission. See 34 C.F.R. § 668.23. Additionally, institutions would have to disburse the funds which students are eligible for under 34 C.F.R. § 668.25. [Guidance issued 12/16/22; technical edit 4/24/23] 

ETIVP-Q2: If an institution has withdrawn from the loan programs for a period of one or more years and later seeks to re-enter that loan programs, what criteria must it meet to be re-admitted? 

ETIVP-A2: Institutions can apply to be re-admitted into the Direct Loan program during the recertification process, and the Department would review an institution's application at that time. Additionally, institutions would need to submit their close out audit, and we must have reviewed and approved it before institutions can re-apply to participate in the Direct Loan program. In instances where an institution leaves the program and then seeks to be re-admitted, as part of the Department’s review during the re-certification process, we would examine if an institution is leaving and re-entering the program to avoid noncompliance with 90/10 requirements. [Guidance issued 12/16/22; technical edit 4/24/23] 

**Disbursement Rule**

DR-Q1: If an institution has a long-standing practice of holding the drawdown of Title IV funds in a subsequent fiscal year, can it continue this practice? How should it document doing so? 

DR-A1: No. FSA funds must be provided to students in a timely manner to best assist them in paying their educational expenses. Consequently, a school may not delay the disbursement of funds for any reason. As stated in 34 C.F.R. §§ 668.28(a)(2)(ii)(A),(B), institutions are required to request and make disbursements to eligible students by the end of the fiscal year. [Guidance issued 4/24/23] 

DR-Q2: Is an institution required to actually draw down Title IV funds before the end of the fiscal year? Would it be sufficient for an institution to count Title IV funds in its 90/10 calculation in one fiscal year but in reality draw them down in the subsequent fiscal year? 

DR-A2: No. Institutions must request and make disbursements to eligible students by the end of the fiscal year. Institutions are required to calculate 90/10 using cash basis accounting. 20 U.S.C. § 1094(d). Therefore, institutions must count funds in the fiscal year in which they are applied to a student’s account. [Guidance issued 4/24/23] 

**Subsequent Fiscal Years**

SFY-Q1: If a student pays a deposit for a course that is delivered in a future fiscal year, in which fiscal year should an institution count the deposit? 

SFY-A1: The institution should count the funds in the fiscal year it applies the funds to a student’s account. [Guidance issued 4/24/23; technical edit 5/31/23] 

SFY-Q2: How should institutions treat credit balances when calculating 90/10? For example, if an institution received a Federal grant prior to its 2023 fiscal year and it used funds from that grant to satisfy a student’s tuition, fees, or other institutional charges in a later fiscal year that begins on or after January 1, 2023, must the institution count those Federal funds in its 90/10 calculation?  

SFY-A2: Yes. The institution must count these funds as Federal education assistance funds in its 90/10 calculation. As stated in 34 C.F.R. § 668.28(a)(4), institutions must presume that Federal education assistance funds are used to satisfy tuition, fees, or other institutional charges. Additionally, institutions must count credit balances in their 90/10 calculation at the time that the funds are applied to pay allowable charges. Therefore, the institution would be required to count those Federal funds as Federal education assistance funds in its 90/10 calculation because it applied those funds to tuition, fees, or other institutional charges in a fiscal year that begins on or after January 1, 2023. [Guidance issued 4/24/23] 

**Related Entity**

RE-Q1: How does the Department define related source or entity, such as described in 34 C.F.R. §§ 668.28(a)(4)(B), 668.28(a)(5)(iii)(A), for purposes of 90/10 calculation?  

RE-A1: 34 C.F.R. § 668.28(a)(4)(B) refers to grants provided by private sources unrelated to the institution, its owners, or affiliates. 

34 C.F.R. § 668.28(a)(5)(iii)(A) refers to the funds that may be disbursed as an institutional scholarship.  The regulations provide that the scholarships must be disbursed from an established restricted account and may be included as revenue only to the extent that the funds in that account represent designated funds from an outside source that is unrelated to the institution, its owners, or its affiliates. 

The restrictions on the sources of funds for grants at 34 C.F.R. § 668.28(a)(4)(B) and the sources of funds for institutional scholarships at 34 C.F.R. § 668.28(a)(5)(iii)(A) are absolute. The sources must not be related to the institution, its owners, or its affiliates in any way. An institution should not include the funds in its calculation if it is unsure about whether the source is related to the institution, its owners, or affiliates. For example, if the institution or an owner of the institution donates funds to an entity that provides grants or scholarships to the institution’s students, the institution would not include the grant and scholarship funds in the calculation.

The regulations at 34 C.F.R. § 668.28(a)(5)(ii) pertain to revenue from income-share agreements (ISA)s and other financial arrangements that an institution may include in the calculation. There, the Department provides additional clarity on sources that would be related to the institution, its owners, or its affiliates to include any “any entity or individual in the institution’s ownership tree, or with any common ownership of the institution and the entity providing the funds, or if the entity or another entity with common ownership has any other relationships or agreements with the institution.” An institution can further look to the related parties it is required to identify in its annual audited financial statements for sources of funds that must be excluded from the calculation. [Guidance issued 5/31/23]  

RE-Q2: If an unrelated entity provides grants to students, such as a foundation, but the institution, someone in the ownership tree, in the institution’s management, or in any other way related to the institution is involved in reviewing and selecting awardees, how should an institution count those grant funds in its 90/10 calculation?  

RE-A2: If an institution, or someone related to the institution in any way, is involved in the review and selection of awardees, these funds are considered to be institutional scholarships. Institutions must follow the applicable regulations governing institutional scholarships in 34 C.F.R. § 668.28(a)(5)(iv) to count these funds in their 90/10 calculation. See also RE-A1. [Guidance issued 5/31/23]