Guidance on Mandatory and Discretionary Trigger Reporting Under Financial Responsibility

Beginning July 1st, new regulations concerning financial responsibility triggers that must be reported to the Department through the COD Document Center will go into effect for institutions that receive Title IV aid . The electronic announcement outlines how as well as when an institution should report Mandatory and Discretionary Triggers; FSA will provide more guidance about what documentation offices can submit in the future.

POSTED DATE: June 27, 2024
AUTHOR: Federal Student Aid
ELECTRONIC ANNOUNCEMENT ID: GENERAL-24-80
SUBJECT: Mandatory and Discretionary Trigger Reporting Under Financial Responsibility

On October 31, 2023, the U.S. Department of Education (the Department) published a final rule in the Federal Register [88 FR 74568] amending the regulations related to financial responsibility pertaining to the student financial assistance programs under Title IV of the Higher Education Act of 1965, as amended (Title IV, HEA programs). That regulation, which goes into effect on July 1, 2024, established a set of events or circumstances, called “triggers,” that could result in institutions being required to provide financial protection. One set of triggers are “mandatory triggers” described under 34 CFR 668.171(c), some of which will automatically require financial protection while others will require a recalculation of the composite score to determine if financial protection is required. If a recalculation of the composite score is required, the Department will do the computation and notify the institution if any financial protection is required. Another set of triggers are “discretionary triggers” described under 34 CFR 668.171(d) that allow the Department to determine whether financial protection is warranted.

With limited exceptions where the Department already has applicable data related to a trigger, or for the Non-Federal educational assistance funds mandatory trigger that must be reported no later than 45 days after the end of the institution’s fiscal year, the regulations require institutions to report to the Department the occurrence of a mandatory or discretionary trigger within 21 days of the trigger’s occurrence. The regulations under 34 CFR 668.171(f) describe the specific reporting requirements and timelines for each trigger.

This Electronic Announcement provides information on the implementation of institutional reporting of information to the Department for the mandatory and discretionary triggers that go into effect on July 1, 2024. Documentation provided by institutions should provide evidence that the trigger occurred and may vary by trigger. Additional guidance will be provided in the future regarding the specific documentation that institutions may provide to fulfill the reporting requirements.

How to Report Mandatory and Discretionary Triggers

Institutions will utilize the Document Center available on the Common Origination and Disbursement (COD) website to report triggers. The COD Document Center is a centralized electronic repository of documents that allows institutional users and affiliated third-party servicers to electronically upload program compliance documents, such as mandatory and discretionary triggers. When uploading documents, up to three files can be uploaded for a document type and each uploaded file has a maximum file size of 50 megabytes, which is larger than the 20 megabytes discussed in the following link that provides additional details and information on using the COD Document Center COD Document Center Presentation.

Instructions for submitting triggers using the COD Document Center:

1. Login to the COD website.
2. After logging in, select the “Tools” tab on the top menu bar to access the Document Center on the Tools landing page.
3. Click Document Center to open the dropdown list. The Document Center functions are Dashboard, Upload Document, and Document Search.
4. Click on Upload Document, which will take the user to the Upload New Document page to upload the document(s) for the requested document type(s). The Upload Document page has five sections: Select School (school information is automatically pre-filled), Input Documentation Information, Choose Document Category, Choose Document Sub-Category, and Choose Document Type.
5. Under Input Documentation Information, enter the following: Document Date (Date trigger occurred), Received Date (Date of submission to the Department), and Fiscal Year (Fiscal Year in which the trigger occurred). All other fields may be left blank.
6. Under Choose Document Type, Case Type Category, select Financial Analysis.
7. Under Choose Document Subtype, select Correspondence.

Under Choose Document Type, browse and select “other.” Users will be required to enter additional information into the note explaining what the document is (up to 70 characters); therefore, users will need to be brief, and it is required that users list trigger information such as mandatory/discretionary and the name or regulation citation of the trigger. For example, an institution could enter Mandatory Financial Exigency or Discretionary 668.171(d)(2). Up to three files can be uploaded for the document type and each uploaded file has a maximum file size of 50 megabytes.

In addition to utilizing the COD Document Center to report triggers, institutions will also need to email the FSA Financial Analysis Division at FSAFinancialAnalysisDivision@ed.gov. To ensure uniformity and facilitate processing of submitted emails, please adhere to the following naming convention for all email submissions:

M/D Trigger, Institution Name, OPEID, State

• M/D Trigger: Indicates whether the trigger submission is Mandatory (M) or Discretionary (D).
• Institution Name: The name of the institution.
• OPEID: The institution’s OPEID number.
• State: The state abbreviation in which the institution is located.

Example: For a mandatory trigger submission from Example University with an OPEID of 123456 located in California, the email subject line should be M, Example University, 123456, CA.

In the body of the email, please provide a brief explanation of the trigger and attach the supporting documentation. The maximum file size for attachments to the email is 100 megabytes.

Institutions are reminded to report triggers within the deadlines under 668.171(f).

SOURCE: (GENERAL-24-80) Mandatory and Discretionary Trigger Reporting Under Financial Responsibility