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Administrative Capability Regulations Questions and Answers

This guidance is intended to answer questions that the public has presented to the Department regarding the new administrative capability regulations.

Questions on this topic are divided into the following categories:

You may refer additional questions to the Department using the Contact Customer Support form in FSA’s Partner Connect Help Center. To submit a question, please enter your name, email address, topic, and question. If your question is related to an open program review or audit, please note that in the question field.

Financial Aid Counseling (FAC)

34 CFR 668.16(h) requires institutions to provide adequate financial aid counseling and communications to enrolled students. In determining whether an institution provides adequate counseling, the Department considers whether an institution advises students and families to accept the most beneficial types of financial assistance available to them and include information regarding:

  • The cost of attendance of the institution as defined under section 472 of the HEA, including the individual components of those costs and a total of the estimated costs that will be owed directly to the institution based on a student’s attendance status;
  • The source and amount of each type of aid offered, separated by the type of the aid and whether it must be earned or repaid;
  • The institution’s net price;
  • The method by which aid is determined and disbursed, delivered, or applied to a student's account, and instructions and applicable deadlines for accepting, declining, or adjusting award amounts; and
  • The rights and responsibilities of the student with respect to enrollment at the institution and receipt of financial aid, including the institution's refund policy, Return of Title IV Funds requirements, satisfactory academic progress, and other conditions that may alter the student's aid package.

FAC-Q1: Are institutions required to consider VA funds when providing adequate financial aid counseling and communications? 

FAC-A1: Although the Department believes it is important for institutions to inform eligible students about their military education benefits, those benefits are not Title IV programs; therefore, they are not covered in this provision.

FAC-Q2: Are institutions required to provide adequate financial aid counseling and communications related to financial situations outside of school (e.g., general financial planning, building credit, etc.)?

FAC-A2: This provision is only about financial assistance to pay for postsecondary education and does not create an expectation for institutions to understand and provide counseling to families on broader financial topics.

FAC-Q3: Our institution already provides this information but in various ways, such as through our student handbook, admissions information, online web pages, and catalogs.  Can we continue to provide this information in this manner?

FAC-A3: Institutions will need to collect and format this information for students to review and acknowledge they have received it from the financial aid office.

Significant Negative Action or Finding (SNA/F)

34 CFR 668.16(n) states that an institution has not been subject to a significant negative action or a finding as by a State or Federal agency, a court, or an accrediting agency, where the basis of the action is repeated or unresolved, such as non-compliance with a prior enforcement order or supervisory directive, and the institution has not lost eligibility to participate in another Federal educational assistance program due to an administrative action against the institution.

SNA/F-Q1: What constitutes a significant negative action or a finding?

SNA/F-A1: Generally, we view a significant negative finding as something that poses a substantial risk to an institution’s ability to effectively administer title IV, HEA programs. We would review the circumstances, the fact and issues at hand, and other relevant information related to the institution and finding in our determination of whether the underlying facts pose a substantial risk.

SNA/F-Q2: Is the loss of eligibility in another Federal program only included when the loss of eligibility is institutional, or does it also include an individual program?

SNA/F-A2: The loss of eligibility in another Federal education assistance program could refer to either an institutional or programmatic eligibility loss, but the administrative capability determination is not automatic. The Department would consider the facts and circumstances of the eligibility loss, including whether the issue was resolved, and eligibility quickly restored, when making an administrative capability determination.

SNA/F-Q3: Do findings by a State or Federal agency, a court, or an accrediting agency need to be finalized to be considered?

SNA/F-A3: No, a finding by a State or Federal agency, a court, or an accrediting agency does not need to be finalized for the Department to consider it relevant to the institution’s administrative capability. A negative action by a State, accreditor, or other Federal agency usually arises from weaknesses in program administration or intentional misconduct, either of which can have a direct impact on the institution’s administration of the Title IV, HEA programs. Consequently, as part of its oversight responsibilities, the Department must be able to consider these actions when evaluating an institution’s ability to properly administer the title IV, HEA programs.

High School Diploma (HSD)

34 CFR 668.16(p) requires institutions to develop and follow adequate procedures to evaluate the validity of a student’s high school diploma if the institution or the Department has reason to believe that the high school diploma is not valid or was not obtained from an entity that provides secondary school education, consistent with the following requirements: 

Adequate procedures to evaluate the validity of a student’s high school diploma must include:

  • Obtaining documentation from the high school that confirms the validity of the high school diploma, including at least one of the following: transcripts, written descriptions of course requirements, or written and signed statements by principals or executive officers at the high school attesting to the rigor and quality of coursework at the high school;
  • If the high school is regulated or overseen by a State agency, Tribal agency, or Bureau of Indian Education, confirming with, or receiving documentation from that agency that the high school is recognized or meets requirements established by that agency; and
  • If the Secretary has published a list of high schools that issue invalid high school diplomas, confirming that the high school does not appear on that list.

A high school diploma is not valid if it: 

  • Did not meet the applicable requirements established by the appropriate State agency, Tribal agency, or Bureau of Indian Education in the State where the high school is located;
  • Has been determined to be invalid by the Department, the appropriate State agency in the State where the high school was located, or through a court proceeding; or
  • Was obtained from an entity that requires little or no secondary instruction or coursework to obtain a high school diploma, including through a test that does not meet the requirements for a recognized equivalent of a high school diploma under 34 CFR 600.2.

HSD-Q1: If an institution encounters situations where students are unable to provide documentation due to their high school being closed and the records being lost, can the institution make a determination on a case-by-case basis?

HSD-A1: The institution could consider this specific circumstance on a case-by-case basis. The regulations provide institutions with procedures for determining the validity of a high school diploma and the Department would consider the institution’s procedures in terms of their pattern or practice in determining whether there would be an administrative capability finding. 

HSD-Q2: Our institution enrolls large populations of immigrants and sometimes they are unable to provide the required documentation about their high school education or may not have been able to complete their high school education due to factors within the country they were born. Can we make determinations on a case-by-case basis for these students?

HSD-A2: The Department acknowledges that there may be cases where students attended high school in another country but do not have that credential in hand when applying to a postsecondary institution. A student’s failure to produce a high school diploma does not obligate the institution to treat the diploma as invalid and the student as ineligible solely because the student does not have the diploma in hand. If, however, other information suggests that the student does not actually have a valid diploma, then § 668.16(p) would require the institution to take additional steps. Institutions may establish policies regarding whether to collect high school diplomas from students and/or what steps to take if a student cannot produce their diploma due to exceptional circumstances. In instances where a student from a foreign country cannot produce their high school diploma, the institution should determine what next steps to take based on their process for determining whether a student has completed high school or has met other criteria in § 668.32. When determining compliance with § 668.16(p), the Department will review the institution’s procedures, the steps it has taken under those procedures, and the documentation it maintains when dealing with situations where facts suggest that a student does not actually have a valid high school diploma. As it does now, the Department will review these situations on a case-by-case basis.

Adequate Career Services (ACS)

34 CFR 668.16(q) requires institutions to provide adequate career services to their students. In determining whether an institution provides adequate career services, the Department considers:

  • The share of students enrolled in programs designed to prepare students for gainful employment in a recognized occupation;
  • The number and distribution of career services staff;
  • The career services the institution has promised to its students; and
  • The presence of institutional partnerships with recruiters and employers who regularly hire graduates of the institution.

ACS-Q1: What does the Department consider adequate career services to be?

ACS-A1: In determining whether an institution provides adequate career services, the Department will consider:

  • The share of students enrolled in programs designed to prepare students for gainful employment in a recognized occupation;
  • The number and distribution of career services staff;
  • The career services the institution has promised to its students; and
  • The presence of institutional partnerships with recruiters and employers who regularly hire graduates of the institution.

The Department’s focus on evaluating institutions will remain on whether the institution can make good on its commitments with appropriate staff and resources in place, while institutions are best equipped to determine what is appropriate to offer based on the education it provides.

ACS-Q2: What does the Department consider to be an adequate presence of institutional partnerships with recruiters and employers, and what would constitute regularly hiring graduates?

ACS-A2: The Department did not provide metrics for the presence of institutional partnerships with recruiters and employers who regularly hire graduates of the institution. The Department believes that institutions should have sufficient career services to help students find jobs and honor any commitments made about the type of job assistance they provide. The Department’s focus on evaluating institutions will remain on whether the institution can make good on its commitments with appropriate staff and resources in place.

Geographically Accessible Clinical or Externships (GACE)

34 CFR 668.16(r) requires institutions to provide students, within 45 days of successful completion of other required coursework, geographically accessible clinical or externship opportunities related to and required for completion of the credential or licensure in a recognized occupation.

GACE-Q1: What does geographically accessible mean?

GACE-A1: The Department addressed what is meant by geographically accessible in the preamble to the final rule. The Department did not provide a specific set of metrics for measuring what is geographically accessible and clarified that it would assess the requirement differently depending on the specific circumstances. For example, accessible distances could be different in rural areas versus urban ones, and it may be reasonable for students to travel great distances for specialized graduate programs whereas it is not reasonable for students in career training certificate programs to travel the same distance.

GACE-Q2: Are optional opportunities or opportunities that happen after program completion included in 668.16(r)?

GACE-A2: The Department clarified in the final rule that opportunities that are optional or occur after program completion, such as residencies, clerkships, and other similar post-graduation experiences are not covered by 668.16(r).

GACE-Q3: Are institutions only required to ensure that students are aware of clinical or externship opportunities within 45 days, or are institutions also required to ensure those experiences start within 45 days?

GACE-A3: The requirement is that institutions provide students with the opportunity within 45 days of successful completion of other required coursework and the Department encourages institutions to set up policies and procedures to meet this standard. The Department understands that the experiences may not start exactly within 45 days for all students. The Department will be reviewing institutions to determine whether a pattern exists where these experiences start well outside reasonable periods and consider this to be a sign that the institution is not abiding by this requirement and does not have sufficient spots for clinicals or externships.

Timely Funds Disbursements (TFD)

34 CFR 668.16(s) requires that an institution disburses funds to students in a timely manner that best meets the students’ needs. The Department does not consider the manner of disbursements to be consistent with students’ needs if, among other conditions:

  • The Secretary is aware of multiple valid and relevant student complaints; 
  • The institution has high rates of withdrawals attributable to delays in disbursements;
  • The institution has delayed disbursements until after the point at which students have earned 100 percent of their eligibility for title IV, HEA funds, in accordance with the return of title IV, HEA requirements in 668.22; or
  • The institution has delayed disbursements with the effect of ensuring the institution passes the 90/10 ratio.

TFD-Q1: Did the Department apply a threshold for multiple valid and relevant student complaints?

TFD-A1: The Department did not adopt a threshold for the number of complaints. The Department did state in the final rule that, when making a finding on this issue, we would establish an institutional failure by determining if any of the expressed conditions in paragraph (s)(1) through (4) of 668.16(s) occurred.

Gainful Employment (GE)

34 CFR 668.16(t) requires institutions that offer GE programs to have less than half of their total Title IV revenue come from GE programs that are failing under subpart S.

GE-Q1: Does this requirement apply after one set of GE failures or after the program ineligibility occurring after two out of three consecutive year failures?

GE-A1: This requirement applies after one set of GE failures, not after the program ineligibility occurring after two out of three consecutive year failures.

Office of Postsecondary Education (OPE)
Page Last Reviewed:
January 13, 2025