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FY 1998 Official Cohort Default Rate Guide Page 25

Economically

Disadvantaged andPlacement RatesAppeal

This section is divided into two parts. The first part (pages 251through 279) provides background information on the economicallydisadvantaged and placement rates appeal and outlines theprocess and procedures for submitting an economicallydisadvantaged and placement rates appeal. The second part(pages 280 through 288) provides sample material as it wouldpertain to an economically disadvantaged and placement ratesappeal.

To understand the economically disadvantaged and placementrates appeal process, the U.S. Department of Education(Department) recommends that the reader review both parts of thissection. In addition, since an economically disadvantaged andplacement rates appeal is a type of exceptional mitigatingcircumstances appeal, please refer to the Exceptional MitigatingCircumstances Appeal section beginning on page 221 foradditional information that applies to all exceptional mitigatingcircumstances appeals, including the economically disadvantagedand placement rates appeal.


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Economically Disadvantaged and Placement Rates Appeal Information for Schools on Adjustments and Appeals

Page 252 FY 1998 Official Cohort Default Rate Guide

What is an economically disadvantaged rate?

An economically disadvantaged rate is the percentage of at leasthalf-time students enrolled in a schools Title IV eligible programswho are eligible to receive at least one-half of the maximumFederal Pell Grant award regardless of the students enrollmentstatus or cost of attendance or who have an adjusted gross incomebelow the poverty level.1

Please refer to page 255 for a more in depth discussion of how tocalculate an economically disadvantaged rate.

What is a placement rate?

A placement rate is the percentage of a schools former regularstudents enrolled on at least a half-time basis in the schools TitleIV eligible programs that are employed in an occupation for which

the institution provided training, as defined in the Higher EducationAmendments of 1965, as amended (HEA), Section 435(a)(4)(A)(iii).

Please refer to page 261 for a more in depth discussion of how tocalculate a placement rate.

Which schools are eligible to submit aneconomically disadvantaged and placementrates appeal?

To file an exceptional mitigating circumstances appeal based on its

economically disadvantaged and placement rates , a schoolmust2:

be subject to sanctions;

1 HEA Section 435(a)(4)(A)(i)2 HEA Section 435(a)(4)(A)

QUALIFYING

PART I: Background,

Process, and Procedures

QQ . What is a regularstudent?

A.A. A regular student

is defined as a personwho is enrolled, oraccepted forenrollment, at a schoolfor the purpose ofobtaining a degree,certificate, or otherrecognized educationalcredential offered bythat school as definedin 34 CFR Section

600.2.


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Information for Schools on Adjustments and Appeals Economically Disadvantaged and Placement Rates Appea


Economically Disadvantaged andPlacement Rates Appeal

Eligibility Checklist

To be eligible to submit an economically disadvantaged and placementrates appeal, a school must meet both of the following criteria:

The school is subject to one or more of the followingsanctions:

v initial loss of eligibility to participate in the FFELProgram, Direct Loan Program, and/or FederalPell Grant Program;

v extended loss of eligibility to participate in theFFEL Program, Direct Loan Program, and/orFederal Pell Grant Program;

AND/OR

v possible action to limit, suspend, and/or terminate(LS&T) participation in one or more Title IVStudent Financial Assistance Programs.

The school is a non-degree granting school that:v enrolls at least 66 2 3 percent of its students from

economically disadvantaged backgrounds asdefined in HEA Section 435(a)(4)(A)(i);

AND

v can demonstrate that at least 44.0 percent of itsstudents were placed as defined in HEA Section435(a)(4)(A)(ii).

be a non-degree-granting school;

demonstrate that at least 66 percent of its studentscame from economically disadvantaged

backgrounds as defined in HEA Section435(a)(4)(A)(i);

AND

demonstrate that at least 44.0 percent of its formerregular students obtained employment in theoccupations for which the school providedtraining as defined in HEA Section 435(a)(4)(A)(iii).

The checklist shown below summarizes the eligibility criteria for aneconomically disadvantaged and placement rates appeal.

23

QQ . What if theschoolis not sure whether it isclassified as a degree-granting or non-degree-granting school?

A.A. A school should

refer to its Eligibility andCertification ApprovalReport generated bythe Departments CaseManagement andOversight Office.

If additional assistanceis needed in makingthis determination,please contact theCase Management andOversight Office at

(202) 260-3616.


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How can an economically disadvantaged andplacement rates appeal affect a schools lossof eligibility to participate in Title IV StudentFinancial Assistance Programs?

If a non-degree granting school submits a successful economicallydisadvantaged and placement rates appeal, the Department willwithdraw its notification of loss or extension of loss of the schoolseligibility to participate in the Federal Family Education Loan(FFEL) Program, William D. Ford Federal Direct Loan (Direct Loan)Program, and/or Federal Pell Grant Program.3 In addition, theDepartment will NOT initiate an action to limit, suspend, orterminate the school's participation in any or all of the Title IVStudent Financial Assistance Programs due to the school's officialcohort default rate.4

A successful exceptional mitigating circumstancesappeal does NOT change a schools official cohortdefault rate. Therefore, if a school submits asuccessful economically disadvantaged andplacement rates appeal, the Department will onlywithdraw its notification that the school is subject toloss for one year. If the schools subsequent cohortdefault rate is once again equal to or greater than25.0 percent or 40.1 percent, the school will benotified that it is once again subject to sanctions. The

school may then choose to submit anothereconomically disadvantaged and placement ratesappeal based on a 12-month period which ends withinthe six months preceding the time period used tocalculate the school's most recent cohort default rate.

Please refer to the Cohort Default Rate Effects section for moreinformation on sanctions associated with cohort default rates.

3 34 CFR Section 668.17(c)(5)4 34 CFR Section 668.17(a)(5)

Note


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X

A school must select a 12-month period thatends during the six months immediatelypreceding FY 1998. Information on how toselect an acceptable 12-month period isprovided on page 227 in the "Exceptional

Mitigating Circumstances Appeals" section.

Economically disadvantaged and placementrates must be based on which time period?

A school must base its economically disadvantaged and placementrates on a 12-month period which ends within the six monthspreceding the time period used to calculate the school's mostrecent cohort default rate [in this case fiscal year (FY) 1998].

Please refer to page 227 of the Exceptional Mitigating

Circumstances Appeal section for more information on selectingan acceptable 12-month period.

How is the economically disadvantaged ratecalculated?

The economically disadvantaged rate5is calculated as follows:

As a part of a successful exceptional mitigating circumstancesappeal, a school must have an economically disadvantaged rate ofat least 66 percent. Please refer to the next page for anexample.

5 HEA Section 435(a)(4)(A)(i)

100

number of regular students enrolled on at least ahalf-time basis in a Title IV eligible program duringthe selected 12-month period who were eligible toreceive at least one-half the maximum Federal PellGrant award regardless of the students enrollmentstatus or cost of attendance or who had an adjustedgross income less than the U.S. Department ofHealth and Human Services poverty level during anaward year/calendar year that overlaps the selected12-month period

number of regular students enrolled on at least ahalf-time basis in a Title IV eligible program duringthe selected 12-month period

23


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X =

Example: Cosmetology School had a total of 200 students

enrolled on at least a half-time basis in a Title IVeligible program during an acceptable 12-monthperiod. Of those 200 students, 80 students wereeligible to receive at least one-half the maximum

Federal Pell Grant award and 60 different studentshad an adjusted gross income less than the U.S.Department of Health and Human Services povertylevel during an award year/calendar year thatoverlaps the selected 12-month period by at least oneday. Cosmetology Schools economicallydisadvantaged rate is calculated as follows:

Which students are included in the denominatorof the economically disadvantaged ratecalculation?

To be included in the denominator of the economicallydisadvantaged rate, a student must have been

enrolled in a Title IV eligible program;

AND

enrolled on at least a half-time basis for one or moredays during the selected 12-month period.6

A students entire enrollment period does not have tofall within the selected 12-month period. A studentwho enrolled prior to the 12-month period butcompleted/withdrew during the 12-month period is

considered to have been enrolled during the 12-month period. In addition, a student who enrolledduring the 12-month period but completed/withdrewafter the 12-month period is considered to have been

enrolled during the 12-month period. Finally, a studentthat enrolled prior to the 12-month period andcontinued to be enrolled until after the 12-month

period is considered to have been enrolled during the12-month period.

6 HEA 435(a)(4)(A)(i)

100

80 (Pell) + 60 (AGI) = 140

20070.0%

Note


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Which students are included in the numeratorof the economically disadvantaged rate?

To be included in the numerator of the economically disadvantagedrate, the student must first be included in the denominator of the

rate. If a student is included in the denominator of the economicallydisadvantaged rate and meets either of the following conditions, thestudent will be included in the numerator of the economicallydisadvantaged rate:

the student has an expected family contribution (EFC)of 1200 or less for the 1995/1996 or 1996/1997 awardyears or 1400 or less for the 1997/1998 award yearand the award year associated with the qualifyingEFC overlaps the 12-month period selected by theschool;7

A student with an EFC of 1200 or less for the1995/1996 and 1996/1997 award years isconsidered to be eligible to receive at leastone-half of the maximum Federal Pell Grantaward. A student with an EFC of 1400 or lessfor the 1997/1998 award year is considered tobe eligible to receive at least one-half of themaximum Federal Pell Grant award.

OR

the student has an adjusted gross income that isbelow the U.S. Department of Health and HumanServices poverty level for a calendar year thatoverlaps with the 12-month period selected by theschool.8

Please refer to the next page for the poverty levelguidelines established by the U.S. Department ofHealth and Human Services.

7 HEA 435(a)(4)(A)(i)(I)8 HEA 435(a)(4)(A)(i)(II)

Note


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U. S. Department of Health and HumanServices Poverty Levels

Based on Family Size

State YearFamily Size

One person Each additional personAlaska 1994 $9,200 +$3,100

1995 $9,340 +$3,2001996 $9,660 +$3,2801997 $9,870 +$3,400

Hawaii 1994 $8,470 +$2,8501995 $8,610 +$2,9401996 $8,910 +$3,010

1997 $9,070 +$3,130All Other States 1994 $7,360 +$2,480

1995 $7,470 +$2,5601996 $7,740 +$2,6201997 $7,890 +$2,720

In order for a student to be included in the numeratorof the economically disadvantaged rate, the studentsapplicable EFC or adjusted gross income must beassociated with an award/calendar year that overlapsthe 12-month period chosen by the school.

Note


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How does a school determine if an award yearoverlaps the selected 12-month period?

An award year begins on July 1 of one year and ends on June 30 ofthe next year. An award year overlaps a 12-month period if anyportion of the award year overlaps any portion of the 12-monthperiod.

Example: Cosmetology School selected June 15, 1996, through

June 14, 1997, as its 12-month period. The1995/1996 award year, which begins on July 1, 1995and ends on June 30, 1996, overlaps the selected 12-month period. In addition, the 1996/1997 award year,which begins on July 1, 1996 and ends on June 30,1997, overlaps the selected 12-month period.

Therefore, Cosmetology School can use estimatedfamily contributions associated with both the1995/1996 and the 1996/1997 award years todetermine if students are economicallydisadvantaged.

12-month period

7/1/1995

1995/1996

Award Year

1996/1997

Award Year

7/1/19966/30/1996 6/30/1997

6/15/1996 6/14/1997


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How does a school determine if a calendaryear overlaps the selected 12-month period?

A calendar year begins on January 1 and ends on December 31. Acalendar year overlaps a 12-month period if any portion of thecalendar year overlaps any portion of the 12-month period.

Example: Cosmetology School selected June 15, 1996, throughJune 14, 1997, as its 12-month period. The 1996 and1997 calendar years overlap the selected 12-monthperiod. Therefore, Cosmetology School can useadjusted gross incomes associated with both the1996 and 1997 calendar years to determine ifstudents are economically disadvantaged.

1/1/1996 1/1/199712/31/1996 12/31/1997

6/15/1996 6/14/1997

1996 Calendar Year 1997 Calendar Year

12-month period


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A school must use the same 12-month periodfor its placement rate as was used for itseconomically disadvantaged rate. Informationon how to select an acceptable 12-month periodis provided on page 227 in the "Exceptional

Mitigating Circumstances Appeal" section.

How is the placement rate calculated?

The placement rate9 is calculated as follows:

As part of a successful economically disadvantaged and placementrates appeal, a school must have a placement rate of at least 44.0percent. Please refer to the next page for an example.

9 HEA Section 435(a)(4)(A)(iii)

X100

number of former regular students included in thedenominator of the placement rate calculation whowere either:

employed, other than by the school, in anoccupation for which the school providedtraining on the day following one year aftertheir last day of attendance at the school;

employed, other than by the school, in anoccupation for which the school providedtraining for at least 13 weeks (91 days) before

the day following one year after their last day ofattendance;

AND/OR

entered active duty in the U.S. Armed Forceswithin a year of leaving the school.

number of former regular students initially enrolled onat least a half-time basis in a Title IV eligible programwho were originally scheduled to complete theirprograms during the same 12-month period selectedfor the economically disadvantaged rate, and whowere enrolled beyond the point at which they wouldhave received a 100 percent tuition refund.


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X =

Example: Cosmetology School had a total of 175 former regular

students enrolled on at least a half-time basis in aTitle IV eligible program who were originallyscheduled to complete their programs during thesame 12-month period used to determine the

economically disadvantaged rate and who remainedenrolled beyond the point that they would haveearned a 100 percent tuition refund. Of those 175students, 60 students were employed, other than bythe school, in an occupation for which the schoolprovided training on the day following 12 months aftertheir last day of attendance at the school; 28 differentstudents were employed, other than by the school, inan occupation for which the school provided trainingfor at least 13 weeks before the day following 12months after their last day of attendance; two different

students joined the U.S. Armed Forces within oneyear of leaving school. Cosmetology Schoolsplacement rate is calculated as follows:

Which students are included in the denominatorof the placement rate calculation?

To be included in the denominator of the placement ratecalculation, a former regular student must have been

initially enrolled on at least a half-time basis;10

enrolled in a Title IV eligible program;

enrolled in the program beyond the point thatallows a student to receive a 100 percent tuitionrefund;11

10 HEA Section 435(a)(4)(A)(iii)(I)(bb)11 HEA Section 435(a)(4)(A)(iii)(I)(aa)

100

60 + 28 + 2 = 90

175

51.4%


A.A. A regular student isdefined as a person whois enrolled, or acceptedfor enrollment, at aschool for the purpose ofobtaining a degree,certificate, or otherrecognized educational

credential offered by thatschool as defined in 34

CFR Section 600.2.


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Students that withdraw from their programare included in the denominator of the

placement rate calculation if theywithdraw beyond the point they would

have received a 100 percent refund.AND

originally scheduled to complete his/her program ofstudy during the 12-month period used to determine theeconomically disadvantaged rate.

Example: Cosmetology School selected June 15,1996 through June 14, 1997 as its 12-month period. Chris Jones was originallyscheduled to complete her cosmetologyprogram on May 15, 1997. Because

Chris's originally scheduled to completedate falls within the 12-month periodselected by the school, Chris should beincluded in the denominator of theplacement rate.

Even though the same 12-month period is usedto calculate both the economicallydisadvantaged and placement rates, thestudents included in the denominator of eachrate will not be the exact same group of

students. Students who were enrolled duringthe 12-month period and qualify to be included inthe denominator of the economicallydisadvantaged rate may not have beenoriginally scheduled to complete theirprograms during the same 12-month period (i.e.the denominator of the placement rate).

Which students are included in the numerator ofthe placement rate?

In order to be included in the numerator of the placement rate, theformer regular student must first be included in the denominator ofthe rate. If the former regular student is in the denominator of theplacement rate and meets any of the following conditions, the formerregular student is included in the numerator of the placement rate:

Note

Note


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the former regular student was employed, other than bythe school, in an occupation for which the schoolprovided training on the day following 12 months afterthe students last date of attendance;

Example: Chris Jones is included in thedenominator of Cosmetology School'splacement rate. Even though Chris wasoriginally scheduled to complete herprogram on May 15, 1997, Chris' last dateof attendance was not until October 21,1997. After completing the cosmetologycourse, Chris obtained a job as ahairstylist at Joe's Salon. Chris wasemployed at Joe's Salon on October 22,1998. Because Chris was employed on

the day after one year after she leftschool, Chris should also be included inthe numerator of the placement rate.

The former regular students actual last date ofattendance does NOT need to fall within theselected 12-month period. Only the studentsoriginally scheduled to complete date must fallwithin the selected 12-month period.

OR

the former regular student was employed, other thanby the school, in an occupation for which the schoolprovided training for at least 13 weeks (91 days) priorto one year after the student left the school;

Example: Anita Smith is included in the

denominator of Cosmetology School'splacement rate. Anita left school asoriginally scheduled on April 15, 1997.

Anita obtained a job as a stylist at Joe'sSalon. Anita was employed as a stylistat Joe's Salon from April 1, 1997 toNovember 30, 1997. Because she wasemployed for 244 days, Anita shouldalso be included in the numerator of theplacement rate.

QQ . Can a studentsemployment while thestudent was stillenrolled at the schoolbe considered whendetermining if thestudent was employedfor 13 weeks?

A.A. Yes, if theemployment is relevantto the training that thestudent is receiving atthe school. However,pre-enrollmentemployment may not be

considered.

Note


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OR

the former regular student was employed by the U.S.Armed Forces within one year of the students lastday of attendance.

A student cannot be counted as successfullyplaced according to any of these conditions ifthe school is the employer.12

Does an independent auditor have to review aschools economically disadvantaged andplacement rates?

Yes, a school's economically disadvantaged and placement ratesmust be reviewed and attested to by an independent auditor. Thematerial the school is required to submit to the Department, asoutlined on page 278, to demonstrate that it meets theeconomically disadvantaged and placement rate thresholds isconsidered the school's management's written assertion. Theindependent auditor must attest to the school's management'swritten assertion.

Upon reviewing the school's management's written assertion andother documentation that the auditor deems appropriate, the

independent auditor must state whether, in the auditor's opinion,the school's management's written assertion demonstrates that theschool meets the economically disadvantaged and placement ratecriteria established in Section 435(a)(4)(A) of the Higher EducationAct of 1965, as amended (HEA). The report must also indicate ifmanagement's written assertions are fairly stated in all materialrespects. The engagement, which forms the basis of theindependent auditor's opinion, must be an examination-levelcompliance attestation engagement performed in accordance withthe American Institute of Certified Public Accountant's (AICPA)Statement on Standards for Attestation Engagements, ComplianceAttestation (AICPA, Professional Standards, Volume 1, AT sec.500), as amended, and Government Auditing Standards issued bythe Comptroller General of the United States.

12 HEA Section 435(a)(4)(A)(iii)(IV)

Note


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Economically Disadvantaged and Placement Rates Appeal Information for Schools on Adjustments and Appeal s


What are the time frames and procedures forsubmitting an economically disadvantagedand placement rates appeal?

Timing is critical when submitting an economically disadvantagedand placement rates appeal.

The following pages provide a step-by-step description of the timeframes and procedures associated with an economicallydisadvantaged and placement rates appeal.

Step 1: Within 30 calendar days of receiving the schoolsofficial cohort default rate notification letter, review theschools official cohort default rate notification letterand this Guide to determine if the school is eligible tosubmit an economically disadvantaged andplacement rates appeal.

Please refer to pages 252 and 253 for a detaileddiscussion regarding which schools are eligible toappeal based on economically disadvantaged andplacement rates.

Step 2: If a school is eligible to submit an economicallydisadvantaged and placement rates appeal, withinthe time frame described in Step 1 (i.e., within 30calendar daysof receiving its official cohort defaultrate notification letter), submit a letter to theDepartment at the address on page 279 that indicatesthat the school intends to submit an economicallydisadvantaged and placement rates appeal.

Refer to the Sample Notice of Intent to File anEconomically Disadvantaged and Placement Rates

Appeal LETTER on page 281 to assist in thedevelopment of the letter.

The following chart provides an overview of the material that shouldbe included in a schools notice of intent to file an economicallydisadvantaged and placement rates appeal.

TIMING AND SUBMITTING

Time framesmay overlap.

Read ALL

steps.

Please referto page 281

for a sampleletter.

Example


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Within the time frames described in Step 2 on page 266, thefollowing MATERIAL should be sent to the Departments DefaultManagement Division at the address on page 279.

A LETTER on the schools letterhead with the schools OPE ID number; a statement indicating that the school intends

to submit an exceptional mitigatingcircumstances appeal based upon itseconomically disadvantaged and placementrates;

the current fiscal year to which the appealapplies;

AND the signature of the schools President/

CEO/Owner, followed by a signature blockproviding the signers name and job title

Schools should refer to the Sample Notice of Intent toFile an Economically Disadvantaged and PlacementRates Appeal LETTER on page 281.

The Department will not accept any notices that aschool intends to submit an economicallydisadvantaged and placement rates appeal after the30 calendar day deadline.

Note


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Step 3: Prior to 60 calendar days after receiving the schools

official cohort default rate notification letter, a schoolmust compile a list of the students that qualify to beincluded in the school's economically disadvantagedrate.

A school should refer to the Sample EconomicallyDisadvantaged Rate SPREADSHEET andSPREADSHEET INSTRUCTIONS on pages 283 and282, respectively, to assist in developing the list.

A school must provide the following information on thelist:

the schools name and OPE ID Number;

the 12-month period on which the school isbasing its economically disadvantaged rate;

For information on selecting an acceptable 12-month period, please refer to page 227 in the"Exceptional Mitigating Circumstances Appeal"section.

the Social Security numbers, in numericalorder, of all the schools students enrolled in aTitle IV eligible program on at least a half-time

basis during any part of the selected 12-monthperiod;

These are the students that will beincluded in the denominator of theeconomically disadvantaged rate.

for each Social Security number listed, thestudents name;

for each student, the beginning and endingenrollment dates [include the month, day andyear (MM/DD/CCYY)];

Note

Note

Please referto page 283for a sample

list.

Example


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If a student was enrolled at the schoolmore than once during the selected 12-month period, list each set of enrollmentdates. However, the student will only becounted once in the calculation.

if the student is from an economicallydisadvantaged background as defined onpage 257, place an "X" next to the student'sname;

These are the students that will beincluded in the numerator of theeconomically disadvantaged rate.

if the student is from an economicallydisadvantaged background, provide either:

v the student's expected familycontribution (EFC) and applicable awardyear;

The expected family contributionmust be 1200 or less for the1995/1996 or 1996/1997 awardyears or 1400 or less for the1997/1998 award year and theaward year associated with thequalifying EFC must overlap the

selected 12-month period in orderfor the student to qualify aseconomically disadvantaged.

OR

v the students, and if applicable thestudents parents/spouses adjustedgross income, family size, andcalendar year associated with theadjusted gross income.

QQ . Which awardyears/calendar yearsoverlap with a selected12-month period?

A.A. An awardyear/calendar yearoverlap with a 12-monthperiod if the awardyear/calendar yearoverlaps the 12-monthperiod by at least oneday.

Please refer to pages259 and 260 for a morein depth discussion on

overlapping award yearsand calendar years.

Note

Note

Note


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The annual gross income must beless than the U.S. Department ofHealth and Human Servicespoverty levels for a calendar yearthat overlaps with the selected 12-

month period in order for thestudent to qualify as economicallydisadvantaged. The U.S.Department of Health and HumanServices' poverty levels are shownon page 258.

Step 4: Within the time frame described in Step 3 (i.e., prior

to 60 calendar days of receiving the schools officialcohort default rate notification letter), a school mustcalculate the school's economically disadvantaged rateand include the rate on its Economically DisadvantagedSPREADSHEET created in Step 3.

Count the number of students identified with an"X" as being economically disadvantaged on thespreadsheet. These are the students that willbe included in the numerator of theeconomically disadvantaged rate.

Count ALL of the students listed on thespreadsheet. These are the students that

will be included in the denominator of theeconomically disadvantaged rate.

Divide the total number of students fromeconomically disadvantaged backgrounds (i.e.,the numerator) by the total number of studentslisted on the spreadsheet (i.e., thedenominator) and multiply the result by 100.This is the school's economicallydisadvantaged rate.

As part of a successful appeal, theschools economically disadvantagedrate must be at least 66 percent.

23

Note

Note


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Step 5: Within the time frame described in Step 3 (i.e.,prior to 60 calendar days after receiving the schoolsofficial cohort default rate notification letter), a schoolmust compile a list of the students that qualify to beincluded in the school's placement rate.

A school should refer to the Placement RateSPREADSHEET and SPREADSHEETINSTRUCTIONS on pages 285 and 284, respectively,to assist in developing the list.

A school must provide the following information on thelist:

the schools name and OPE ID Number;

an indication that the same 12-month periodis being used for the schools placement rateas is being used for the schools economicallydisadvantaged rate;

the Social Security numbers, in numericalorder, of all the schools former regularstudents who were:

v initially enrolled on at least a half-timebasis;

v enrolled in a Title IV eligible program;

v enrolled beyond the point that allowsa student to receive a 100 percenttuition refund;

AND

v originally scheduled to complete theirprogram of study during the selected 12-month period.

These are the students that will beincluded in the denominator of theplacement rate calculation.

Please refer to pages 262 and 263 for amore in-depth description of thestudents that should be included in thedenominator of the schools placementrate calculation.

Note

Please refeto page 285

for a samp

list.

Example


A.A. A regular studentis defined as a personwho is enrolled, oraccepted forenrollment, at a school

for the purpose ofobtaining a degree,certificate, or otherrecognized educationalcredential offered bythat school as definedin 34 CFR Section

600.2.


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for each Social Security number listed, theformer regular students name;

for each student, the date that each formerregular student was originally scheduled atthe time of enrollment to complete his or herprogram of study;

v If the student was initially enrolled on aless than full-time basis, the originalscheduled to complete date will bebased on the amount of time it wouldtake the student to complete theprogram if he or she remained enrolledat that level of enrollment throughout theprogram.

v If the student was initially enrolled on afull-time basis, the scheduled tocomplete date will be based on theamount of time normally required by afull-time student to complete theprogram, as specified in the schoolsenrollment contract, catalog, or othermaterials.

for each former regular student, the beginningand ending enrollment dates;

if the student was successfully placed, placean "X" next to the former regular student'sname;

These are the students that will beincluded in the numerator of theplacement rate.

A former regular student is successfully placedif:

v the former regular student wasemployed, other than by the school, inan occupation for which the schoolprovided training on the day following 12months after the date of the studentslast day of attendance at the school;

Note


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OR

v the former regular student wasemployed, other than by the school, inan occupation for which the schoolprovided training for at least 13 weeks(91 days) before the day following 12months after the date of the studentslast day of attendance at the school.

OR

v the former regular student wasemployed in the U.S. Armed Forceswithin a year of leaving the school.

Please refer to pages 263 through 265for a more detailed discussion of whichstudents are considered successfullyplaced.

for each former regular student successfullyplaced in an occupation other than the military,the student's program of study (do NOT useabbreviations);

for each former regular student successfullyplaced in an occupation, including the military,the beginning and ending dates of theemployment that qualifies the student assuccessfully placed;

for each former regular student successfullyplaced, the students job description in theemployment that qualifies the student assuccessfully placed (do not use abbreviations);

If the student entered active duty in the

U.S. Armed Forces, enter U.S. ArmedForces.

AND

for each former regular student successfullyplaced, the name, address, and telephonenumber of the employer with which thestudent was successfully placed.

Note


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Step 6: Within the time frame described in Step 3 (i.e.,

prior to 60 calendar days after receiving the schoolsofficial cohort default rate notification letter), a schoolmust calculate the school's placement rate andinclude the rate on its Placement Rate

SPREADSHEET created in Step 5. Count the number of former regular students

identified with an "X" as being successfullyplaced on the spreadsheet. These are thestudents who will be included in thenumerator of the placement rate.

Count ALL of the former regular students listedon the spreadsheet. These are the studentswho will be included in the denominator ofthe placement rate.

Divide the total number of former regularstudents successfully placed (i.e., thenumerator) by the total number of formerregular students listed on the spreadsheet (i.e.the denominator) and multiply the result by100. This is the school's placement rate.

As part of a successful appeal, the schoolsplacement rate must be at least 44.0 percent.

Step 7: Within the time frame described in Step 3 (i.e.,

prior to 60 calendar days after receiving the schoolsofficial cohort default rate notification letter), a schoolmust submit to an independent auditor for review, theschool's Economically DisadvantagedSPREADSHEET and Placement RateSPREADSHEET and any other documents requestedby the school's independent auditor.

The independent auditor must perform areview and provide a report that states

whether, in the auditor's opinion, the school'sspreadsheets and any other additionaldocumentation requested by the auditordemonstrate that the school meets theexceptional mitigating circumstances criteriaoutlined in 34 CFR Section 668.17(c) and HEASection 435(a)(4)(A).

Note


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The spreadsheets submitted by the school tothe independent auditor are considered theschool's management's written assertions.

The auditors opinion must indicate if theschools management's written assertions arefairly stated in all material respects.

The engagement which forms the basis of theindependent auditor's opinion must be anexamination-level compliance attestationengagement performed in accordance with theAmerican Institute of Certified PublicAccountant's (AICPA) Statement on Standardsfor Attestation Engagements, ComplianceAttestation (AICPA, Professional Standards,

Volume 1, AT sec. 500), as amended, andGovernment Auditing Standards issued by theComptroller General of the United States.

The attestation must be in the form of a letterwith

v the school's name;

v the school's OPE ID number;

v the fiscal year to which the appeal

applies;v the auditor's opinions on management's

assertions;

AND

v the independent auditor's signature,followed by a signature block providingthe signer's name and title.

The independent auditor should refer to the

Sample Independent Auditors AttestationLETTER on page 287 to assist in developingthe letter outlining the attestation.

The following chart provides an overview of the MATERIAL thatshould be sent to the schools independent auditor.

Please refe

to page 287for a sampl

letter.

Example

Note


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Within the time frame described in Step 7 on page 274, thefollowing MATERIAL should be sent to the schools independentauditor.

The section behind Tab 1 contains:

A LETTER on the schools letterhead with

the schools OPE ID number; a statement indicating that the school intends to submit, to the

Department, an exceptional mitigating circumstances appealbased upon its economically disadvantaged and placementrates;

the current fiscal year to which the appeal applies; a statement requesting the independent auditor to review its

written assertions in accordance with the standardsestablished by the American Institute of Certified PublicAccountants and HEA Section 435(a)(4)(A);

a statement indicating that the schools deadline to submit acopy of the auditors opinion to the Department is within 60calendar days of receiving the schools official cohort defaultrate notification letter;

a certification sentence that indicates that the informationprovided in the appeal, under penalty of perjury, is true andcorrect;

AND

the signature of the schools President/CEO/Owner, followedby a signature block providing the signers name and job title


The SPREADSHEET on its economically disadvantaged rate ascreated in Step 3 on page 268.

Schools should refer to the Sample Economically DisadvantagedRate SPREADSHEET and SPREADSHEET INSTRUCTIONS onpages 283 and 282, respectively.


The SPREADSHEET on its placement rate as created in Step 5 onpage 271.

Schools should refer to the Sample Placement Rate SPREADSHEETand SPREADSHEET INSTRUCTIONS on pages 285 and 284,respectively.


Any other documents the independent auditor has requested tocomplete the review.

Tab 1

Tab 2

Tab 3

Tab 4


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Step 8: Within 60 calendar days after receiving the schools

official cohort default rate notification letter, a schoolmust submit the following to the Department at theaddress on page 279:

a letter indicating that the school is submittingits economically disadvantaged and placementrates appeal;

A school should refer to the SampleEconomically Disadvantaged and PlacementRates Appeal LETTER on page 286;

a copy of the school's spreadsheets createdin Steps 3 and 5;

AND

the independent auditor's opinion onmanagement's written assertions.

The following page provides an overview of the MATERIAL thatshould be included in a school's economically disadvantaged andplacement rates appeal submitted to the Department.

Please referto page 286for a sample

letter.

Example

Due date forsubmittingthe appeal to

the

Department.

Please referto page 287for a sampleauditorsopinion.

Example


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Within the time frame described in Step 8 on page 277, thefollowing MATERIAL, to support an economically disadvantagedand placement rates appeal, should be sent to the DepartmentsDefault Management Division at the address on page 279.


A LETTER on the schools letterhead with

the schools OPE ID number; a statement indicating that the school is submitting an exceptional

mitigating circumstances appeal based upon its economicallydisadvantaged and placement rates;

the current fiscal year to which the appeal applies; a certification sentence that indicates that the information provided

in the appeal, under penalty of perjury, is true and correct;

a list of the other adjustment/appeals the school intends to submit tothe Department;

AND

the signature of the schools President/CEO/Owner, followed by asignature block providing the signers name and job title

Schools should refer to the Sample Economically Disadvantaged andPlacement Rates Appeal LETTER on page 286.


The SPREADSHEET on its economically disadvantaged rate as created inStep 3 on page 268.

Schools should refer to the Sample Economically Disadvantaged RateSPREADSHEET and SPREADSHEET INSTRUCTIONS on pages 283 and282, respectively.


The SPREADSHEET on its placement rate as created in Step 5 on page271.

Schools should refer to the Sample Placement Rate SPREADSHEET andSPREADSHEET INSTRUCTIONS on pages 285 and 284, respectively.


The INDEPENDENT AUDITOR'S OPINION on the school's management'swritten assertions.

Please refer to the Sample Independent Auditors Attestation LETTER onpage 287.

The Department will not consider informationsubmitted after the 60 calendar day deadline. TheDepartment will send the school written notification ofits decision. The Departments decision is finaland no further administrative review is provided.

Tab 1

Tab 4

Note

Tab 2

Tab 3


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If sent by commercial overnight mail/courier delivery, send theschools economically disadvantaged and placement rates appeal to:

U.S. Department of EducationDefault Management DivisionATTN:Economically Disadvantaged and

Placement Rates AppealPortals Building, Room 63001250 Maryland Avenue, SWWashington, DC 20024

If sent by U.S. Postal Service, send the schools economicallydisadvantaged and placement rates appeal to:

U.S. Department of EducationDefault Management DivisionATTN:Economically Disadvantaged and

Placement Rates AppealPortals Building, Room 6300400 Maryland Avenue, SWWashington, DC 20202-5353

The Department will not accept any appealcorrespondence by facsimile (fax) or e-mail.

The Department recommends that a school send all appealcorrespondence return receipt requested or via commercial overnightmail/courier delivery. This will be useful to a school if it is asked toauthenticate the timeliness of its appeal. A school should maintainthe documentation which verifies the receipt of the appeal relatedmaterial. In addition, a school should retain copies of alldocumentation submitted as a part of the appeal process.

Note


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Part II provides sample material that should be referenced by aschool when compiling the material that must be submitted by aschool during the economically disadvantaged and placement ratesappeal process.

CONTENT REFERENCE FOR PART II

Sample Notice of Intent to File an Economically Disadvantagedand Placement Rates Appeal LETTER ..........................................281

Economically Disadvantaged Rate SPREADSHEETINSTRUCTIONS.................................................................................282

Sample Economically Disadvantaged Rate SPREADSHEET......283

Placement Rate SPREADSHEET INSTRUCTIONS ......................284

Sample Placement Rate SPREADSHEET.......................................285

Sample Economically Disadvantaged and Placement RatesAppeal LETTER..................................................................................286

Sample Independent Auditors Attestation for an EconomicallyDisadvantaged and Placement Rates Appeal LETTER...............287

PART II: Supporting

Material


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Sample Notice of Intent to File anEconomically Disadvantaged and Placement Rates Appeal LETTER

.

October 12, 2000

U.S. Department of Education OPE ID#: 000060

Default Management DivisionAttn: Economically Disadvantaged and Placement Rate IntentPortals Building, Room 63001250 Maryland Avenue, S.W.Washington, D.C. 20024

Dear Default Management Division:

Cosmetology School, OPE ID# 000060, intends to file an FY 1998exceptional mitigating circumstances appeal based on oureconomically disadvantaged and placement rates.

Sincerely,

Melissa MartinMelissa Martin, President

Cosmetology School1212 Wedgewood LaneLeonardtown, Wisconsin 12345-6789(123) 456-7890

Sample Letter

Subject: FY 1998 Notice of Intent to File an EconomicallyDisadvantaged and Placement Rates Appeal


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Sample Economically Disadvantaged Rate SPREADSHEET

6c.Ifcolumn

6ahasanAGI,

entercalendar

year

1996

6b.Ifcolumn

6ahasanAGI,

enterfamily

size

1

6a.Ifcolumn4

ismarkedand

economically

disadvantaged

isbasedon

AGI,enter

AGI

$4,2

00.0

0

5b.Ifcolum

n

5ahasanEFC,

enterthe

awardyea

r

associated

withtheEFC

1996/19

97

5a.Ifcolumn4

ismarked

and

economically

disadvantaged

isbasedonEFC,

enterEFC

1,0

00

4.Ifstudent

qualifiesas

e

conomically

disadvantaged

enterX

X X

3.Student's

enrollmentdates

(from

MM/DD/CCYY

toMM/DD/CCYY)

3/15/1996-3/10/1997

6/16/1996-10/3/1996

12/15/1996-10/21/1997

2.Student's

name

JaneSmith

JohnDoe

ChrisJones

1.Student's

SSN

(sortinnumerical

order)

111-11-1111

111-22-2222

222-22-2222

FY1998

EconomicallyDisadvantaged

Rate

SchoolName:CosmetologySchool

OPEIDNumbe

r:000060

12-monthPerio

d:6/15/1996-6/14/1997

AwardYears:1

995/1996and1996/1997

CalendarYears

:1996and1997

Note:Thisisas

ample

spreadsheet.(S

eeinstructions).

11/01/2000

[sendtoU.S.

Dep

artmentofEducation'sDefault

Pag

e1of10pages

ManagementD

ivisionattheaddresslocatedonpage

279.]

BoxB

#ofEconomicallyDisad

vantagedStudents(fromColumn4)[B1]

140

#ofStudents(fromColumn1)[B2]

200

EconomicallyDisadvan

tagedRate[100xB1/B2]

70.0%


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Sample Placement Rate SPREADSHEET

9

.Ifstudent

was

successfully

pla

ced,provide

e

mployer's

name,address,

a

ndphone

number

Jo

e'sSalon

30

FirstLane

Phoenix,AZ

55555

(888)555-1111

Jo

e'sSalon

30

FirstLane

Phoenix,AZ

55555

(888)555-1111

8.Ifstudent

was

successfully

placed,

provide

student'sjob

description

(doNOTuse

abbreviations)

HairStylist

HairStylist

7.Ifstudent

was

successfully

placed,

providebeginning

andending

datesof

employment

(from

MM/DD/CCYY

toMM/DD/CCYY)

4/1/1997-11/30/97

10/1/98-present

6.Student's

programo

f

study

Cosmetology

Cosmetology

5.Ifstudent

was

successfully

placedin

employment,

enterX

X X

4.S

tudent's

enrollment

dates

(fromM

M/DD/CCYY

toMM

/DD/CCYY)

3/15/1996-

04/15/1997

12/1

5/1996-

10/21/1997

10/1/1995-

09/15/1997

3.Datethat

studentwas

originally

scheduledto

complete

program

ofstudy

04/15/1997

05/15/1997

10/15/1996

2.Student's

Name

AnitaSmith

ChrisJones

JamesJohn

1.Student's

SSN

(sortinnumericalorder)

111-11-2222

222-22-2222

333-33-3333

11/0

1/2000

[sendtoU.S.

DepartmentofEducation'sDefault

Page1of1

2pages

Management

Divisionattheaddresslocatedonpag

e279.]

BoxC

#ofFormerRegularStudentsSuccess

fullyPlaced(fromColumn5)[C1]

90

#ofFormerRegularStudentsOriginallyScheduledtoCompletePrograms(fromC

olumn1)[C2]

175

PlacementRate[100xC1/C2]

51.4%

FY1998

PlacementRate

SchoolName:CosmetologySchool

OPEIDNumbe

r:000060

12-monthPerio

d:6/15/1996-6/14/1997

Note:Thisisas

ample

spreadsheet.(S

eeinstructions).


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Sample Economically Disadvantaged and Placement Rates Appeal LETTER

November 1, 2000

U.S. Department of Education OPE ID#: 000060Default Management DivisionAttn: Economically Disadvantaged and Placement Rates AppealPortals Building, Room 63001250 Maryland Avenue, S.W.Washington, D.C. 20024


Cosmetology School, OPE ID# 000060, is submitting its FY 1998 exceptionalmitigating circumstances appeal based on our economically disadvantaged andplacement rates.

I, the undersigned, certify under penalty of perjury, that our economicallydisadvantaged rate is 70.0%, our placement rate is 51.4%, and that all other

information submitted in support of this exceptional mitigating circumstances appealis true and correct.

Please see the attached spreadsheets for the economically disadvantaged andplacement rates, along with the independent auditor's attestations on our school'smanagement assertions.

Cosmetology School is submitting its economically disadvantaged and placementrates appeal at this time; however, the school has also timely submitted anuncorrected data adjustment.

Sincerely,

Melissa MartinMelissa Martin, President

Enclosures

Cosmetology School1212 Wedgewood LaneLeonardtown, Wisconsin 12345-6789(123) 456-7890

Sample Letter

Subject: FY 1998 Economically Disadvantaged and Placement

Rates Appeal


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Sample Independent Auditors Attestation for anEconomically Disadvantaged and Placement Rates Appeal LETTER

October 19, 2000

U.S. Department of Education OPE ID#: 000060Default Management DivisionAttn: Economically Disadvantaged and Placement Rates AppealPortals Building, Room 63001250 Maryland Avenue, S.W.Washington, D.C. 20024


We have examined managements written assertions that the information contained inCosmetology Schools OPE ID# 000060 exceptional mitigating circumstances appeal based onits economically disadvantaged and placement rates, is complete, accurate and determined inaccordance with the requirements of HEA Section 435(a)(4)(A). Management is responsible forCosmetology Schools compliance with those requirements. Our responsibility is to express anopinion on managements assertions about the institutions compliance based on ourexamination.

Our examination was made in accordance with standards established by the American Institute

of Certified Public Accountants and, accordingly, included examining, on a test basis, evidenceabout Cosmetology Schools compliance with HEA Section 435(a)(4)(A) and performing suchother procedures as we considered necessary in the circumstances. We believe ourexamination provides a reasonable basis for our opinion. Our examination does not provide alegal determination on Cosmetology Schools compliance with specified requirements.

In our opinion, managements written assertion that Cosmetology School has an economicallydisadvantaged rate of 70.0% and a placement rate of 51.4% for the twelve-month periodbeginning on June 15, 1996 and ending on June 14, 1997, is complete, accurate, anddetermined in accordance with the requirements set forth in HEA Section 435(a)(4)(A), and isfairly stated, in all material respects.

This report is intended solely for the information of an audit committee, management, and theU.S. Department of Education. However, this report is a matter of public record and itsdistribution is not limited.

Respectfully submitted,

Mary Smith

Mary Smith, CPAPresident, Global Accounting, Inc.

Global Accounting1212 Hickory LaneHughesville, Florida 12345-6789

(123) 456-7890Sample Letter

Subject: Independent Auditors Attestation


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