Background for Specific Criteria

This topic contains background about specific disbursement approval criteria. 

Processing for the First-Time Borrower 30-Day Rule

The Disbursements will fail for the First-Time Borrower 30-Day Rule, only under the following two conditions:

• If no term is associated with the disbursement that is being paid.

• If you select the First Time Borrower 30- Day Rule check box and all of these conditions are met.

  • The Fund Type is Subsidized Stafford, Unsubsidized Stafford, Direct, or Direct Unsubsidized loan

  • The student is a first-time borrower

  • The valid term is associated with the disbursement that is being paid

  • The term is the first term of the enrollment

  • The disbursement is the first disbursement of the year

  • The disbursement scheduled date is less than 30 days from the student's academic year start date

Processing for the Min Credits Complete and Min Hours Completed Fields

If a student is enrolled in a program version that is configured to use an academic calendar for credits or clock hours and the student has a stub loan period, Anthology Student does not use completed credits or hours and weeks as criteria when approving disbursements for Direct loans associated with the: 

• Stub loan period

• First payment period of the second loan period

This means disbursements for direct loans associated with a stub loan period or disbursements associated with the first payment period of the second loan period can be automatically approved regardless of how many clock or credit hours or weeks of instructional time have been completed (provided that all other criteria have passed validation).

Disbursements associated with the second payment period of the second loan period or later are still subject to the normal BBAY3 rules that require a student to complete credits or hours and weeks of instruction time before being eligible to receive the disbursements. For additional information, see the FSA Handbook.

Calculation for FA Credits/Clock Hours

You can specify that the number of FA credits or clock hours that are attempted or earned must be greater than or equal to the minimum value calculated by Anthology Student by selecting Attempted or Earned in the FA Credits/Clock Hours list for:

• Non-Title IV disbursements for payment periods

• Program versions that have been configured to have a value for one of the FA Clock to Credit Conversion Rate fields

To calculate the value, Anthology Student: 

1. Calculates the total number of FA credits in the program for the student by dividing the total number of hours in the program by the number specified in the FA Clock to Credit Conversion Rate field.

2. Calculates the total number of disbursements in the program by summing the number of disbursements defined for each academic year attached to the program version. The number of disbursements for each academic year is determined by looking up the default number of disbursements defined for the fund source being evaluated on the academic year's setup.

3. Determines the minimum required FA credits for each disbursement number. Anthology Student divides the total number of FA credits calculated in Step A by the total number of disbursements in the program calculated in Step B.

For example, if there are 100 FA credits in the program and a total of 4 disbursements, then the number of FA credits required for each subsequent disbursement will be incremented by 25. The table shows the minimum FA credits required for each disbursement for the example.

Disbursement Number	Minimum FA Credits Required
1	0
2	25
3	50
4	75

The criteria will pass if the student has attempted or earned a number of FA credits that is greater than or equal to the minimum number of FA credits calculated for that disbursement number. In the example above, if the third disbursement of a loan was being evaluated, the student would have to have attempted or earned at least 50 FA credits for the criteria to pass.

Before the Final Rule for Program Integrity Issues published in the Federal Register on October 29, 2010, typical values for the rate were 20 for Quarter Credit programs or 30 for Semester Credit programs. With the publication of these final regulations, which are effective as of July 1, 2011, you can specify an updated clock to credit conversion rate when you configure program versions that Anthology Student then uses for all enrollments on or after the effective date.

This effective date allows branching logic to apply the current conversion rate for students who enroll before July 1, 2011 (the effective date for the current rate) regardless of whether the disbursement date is before or after the older effective date. For students who enroll after July 1, 2011, Anthology Student applies the updated rate.

The table shows examples.

Type of Program	Characteristics of the Example	Result
Quarter credit	The current rate defined in the regulations of 20 for quarter credit programs is configured for the program version. The school enters the updated conversion rate of 25 required in the new regulation and enters an effective date of July 1, 2011.	When Anthology Student evaluates the disbursement for automatic approval, it applies branching logic that applies the 20:1 clock to credit ratio for all students who enrolled in the quarter credit program before the effective date, regardless of the disbursement date. For all students who enrolled on or after July 1, 2011, it applies the 25:1 ratio.
Semester credit	The current rate defined in the regulations of 30 for semester credit programs is configured for the program versions. The school enters the updated conversion rate of 37.5 required in the new regulation and enters an effective date of July 1, 2011.	When Anthology Student evaluates the disbursement for automatic approval, it applies branching logic that applies the 30:1 clock to credit ratio for all students who enrolled in the semester credit program before the effective date, regardless of the disbursement date. For all students who enrolled on or after July 1, 2011, it applies the 37.5:1 ratio.

Impact of Clock to Credit Conversion Rate on Disbursement Approval

The Approve Disbursements to Pay process takes the Clock to Credit conversion into consideration for a program that is configured as being subject to the conversion (see Configure FA Information for Program Versions). It does this by evaluating the hours configured for scheduled courses and applying the conversion rate to those hours. Effective as of July 1, 2011, an updated Clock to Credit conversion rate and effective date can be configured on the FA Program version form and used for all enrollments on or after the stated effective date.

This effective date allows branching logic to apply the current conversion rate for students who enroll before July 1, 2011 (the effective date for the current rate) regardless of whether the disbursement date is before or after the older effective date. For students who enroll after July 1, 2011, the updated rate will be applied. July 1, 2011, is the date dictated by regulation, but since it is configurable schools may choose any date.

Example: Quarter Credit Program

This example assumes that the current rate defined in the regulations of 20 for Quarter Credit Programs is configured on the FA Program Version. The school enters the updated conversion rate of 25 required in the new regulation and enters an Effective Date of July 1, 2011.

When the Approve Disbursement to Pay process is run, the process applies branching logic that applies the 20:1 Clock to Credit ratio for all students that enrolled in the Quarter Credit program before the Effective Date, regardless of the disbursement date. For all students who enrolled on or after July 1, 2011, the logic will apply the 25:1 ratio.

Example: Semester Credit Program

This example assumes that the current rate defined in the regulations of 30 for Semester Credit Programs is configured on the FA Program Version. The school enters the updated conversion rate of 37.5 required in the new regulation and enters an Effective Date of July 1, 2011.

When the Approve Disbursement to Pay process is run, the process applies branching logic that applies the 30:1 Clock to Credit ratio for all students that enrolled in the Semester Credit program before the Effective Date, regardless of the disbursement date. For all students who enrolled on or after July 1, 2011, the logic will apply the 37.5:1 ratio.