Title IV: You might have seen this term around during your college research. Whether or not your school of choice is a Title IV institution will affect how you are able to pay for that school now and down the line.
A Quick History Lesson
In 1965, Lyndon B. Johnson signed the Higher Education Act (HEA) into law. The goal was to increase resources for educational institutions and provide financial assistance to those students pursuing an associates, bachelors or other higher education degrees that was at least two years and would prepare them for gainful employment. Title IV of the act outlines rules related to financial aid.
This both outlines regulations to be followed by the schools that want the ability to offer federal financial aid and the expectations of the students to receive it.
The HEA has been amended a number of times to include changes such as not allowing students with a drug charge to receive federal aid and to require participating schools to make real efforts in encouraging and providing easy access to voter registration for students. These amendments still stand today.
Some Notable Protections
As it relates to higher education, from its conception through current day, the act protects students from discrimination on the basis of race, color, religion, or national origin. In 1972, Title IX was added to include protection from discrimination on the basis of sex. In 2017, the Obama administration announced that their interpretation of “sex” included the protections against discrimination on assigned sex, gender identity and transgender. Those that do not comply with these protections do not receive federal funding.
If you’re interested in the details, read more about the evolution and impact of Title IX.
During a reauthorization of the law in 2008, many new protections were added to the act for both the students and the schools. As a result, schools are now required to be more transparent about their net cost and protections were put into place for students with disabilities. Sections were added to combat illegal file sharing and copyright abuse. And for the betterment of lower-income students, certain financial aid awards were increased, interest rates were decreased and loan forgiveness for public servants was enacted.
Title IV Schools
A Title IV school is an institution that processes U.S. federal student aid. These institutions of higher education include public, private nonprofit and proprietary schools. Attendees of these colleges, if demonstrating financial need, can receive student loans, grants and enter a work-study program.
In order for an institution to be called a Title IV school, they must follow the rules put in place through the HEA and all of its subsequent amendments. There are plenty of criteria that must be met for approval on top of complying with all protections and regulations. Higher-education institutions are not required to follow Title IV, but as a result their students cannot receive U.S. federal student aid.
Many of the schools in the United States are Title IV. It’s expensive not to be! Schools that are not Title IV must find ways to help cover the cost of students who cannot afford to attend their school without financial assistance. According to College Board, about two-thirds of full-time students use financial aid in the form of grants and scholarships to help cover the cost of their education. The majority of this is federal aid.
Non-Title IV schools are exempt from anti-discrimination rules and other federal civil-rights regulations that are required through Title IV. As a result, they do not report their demographic information to the government, so are not included on the federal College Scorecard. Many of these non-Title IV schools are religious institutions. To some it’s an independence from government and a protection of their religious beliefs that do not align with government expectations.
Money Available through Title IV
There are a number of Title IV funds available to students attending a Title IV institution. We only discuss funds available for undergraduates here. Briefly, they are:
Direct Subsidized/Unsubsidized Loan (Stafford Loan)
These are actually quite different despite their similar names. Subsidized loans are offered based on the student’s demonstrated financial need. The interest for these loans doesn’t accrue while the student is in college, because it’s paid for by the federal government. Unsubsidized loans are available to anyone regardless of need and interest accrues immediately. Learn more from the U.S. Department of Education.
Direct PLUS Loan
For an undergraduate education, this loan is only available to the parents of the undergraduate. The student cannot apply themself. Unlike other federal loans, this loan will require a credit check and can be the whole cost of attendance minus other financial aid. Learn more from the FAFSAⓇ website.
Federal Pell Grant
Unlike the subsidized, unsubsidized and PLUS loans, this is not a loan. It is a grant, which means that it is not paid back. It is essentially free money. This grant is only available to those with financial need as determined by the FAFSA, but is available to every single student that is eligible. Learn more from College Board.
Federal Supplemental Educational Opportunity Grant (FSEOG)
This grant is administered through the financial aid office of each participating school to the select few students with the most financial need. Not all Title IV schools participate in the FSEOG program, so check with your individual school if you are interested in this grant. A certain amount of money is award to each school from the federal government through this program and it is up to the school’s discretion to determine how that money is dispersed to each student. Learn more at the FAFSA website.
Federal Perkins Loan
This is a low-interest loan, like the Stafford loan, that is available only to students with demonstrated financial need. It is subsidized, meaning that interest does not start accruing until the student’s graduation. The federal government pays the interest during the student’s enrollment. Learn more from the U.S. Consumer Financial Protection Bureau.
Paying for College
If you want help paying for college through any of the above loans or grants, you must make sure that you attend a Title IV institution. See if the schools you’re interested in attending are Title IV schools here or contact their admissions office to ask.
In order to get any of the available federal financial aid, you must fill out the Free Application for Federal Student Aid (FAFSA). This will determine your financial need by subtracting your Expected Family Contribution from the Cost of Attendance of each school to which you apply.
You will need to complete these two steps in order to ensure that you are given the chance to use federal financial aid to cover college costs. If you’re eligible, this process guarantees to make college more affordable.
