Comprehensive Guide to the 90/10 Regulations and Common Questions
December 23, 2025
Understanding the intricacies of the 90/10 rule is essential for educational institutions to remain compliant and avoid penalties. This detailed guide addresses frequently asked questions about the regulation’s scope, application, and nuances, providing clarity on complex issues that institutions face when calculating their revenue from eligible and ineligible programs, handling federal and state funds, and managing enrollment and program participation. Whether you’re navigating new compliance deadlines or interpreting specific provisions, this resource offers authoritative insights to help you stay on track and ensure adherence to federal standards.
Many questions have arisen regarding how the regulations are applied in practice, especially around counting revenue from various sources and programs. For example, institutions often ask about including revenue from non-Title IV programs or how to handle funds that are comingled between federal and state sources. Additionally, the impact of innovative financing options like income share agreements or the procedures for re-entering the Title IV programs after withdrawal are common concerns. This guide aims to clarify these issues, referencing official guidance and providing practical explanations to assist institutional compliance efforts.
90/10 General Questions
Q1: Which fiscal years are affected by the new 90/10 regulations?
A1: The updated rules are applicable to fiscal years beginning on or after January 1, 2023. Institutions must ensure that their reporting and calculations align with this effective date, as outlined in the guidance issued on April 24, 2023.
Q2: If an institution learns of federal funds not listed in the Federal Register notice that are used to support tuition or institutional charges, must these funds be included in the 90/10 calculation?
A2: Yes. Any federal education assistance funds provided directly to either the institution or students to cover tuition, fees, or other institutional charges must be included unless they are awarded directly to cover charges unrelated to institutional costs, such as personal expenses. The Department emphasizes the importance of accurately capturing all relevant federal funds, as detailed in the official guidance from April 24, 2023.
Q3: When does an institution become responsible for repaying Title IV funds disbursed after the fiscal year ends?
A3: Responsibility for repayment begins when an institution fails the 90/10 test for two consecutive years, specifically after the second failure. This liability starts on the first day of the fiscal year following the second failure, according to guidance issued on April 24, 2023.
Q4: Can revenue from charges not directly related to tuition, such as for additional materials or replacement IDs, be counted in the 90/10 calculation?
A4: No. Revenue from non-institutional charges, such as materials or miscellaneous fees, cannot be included in the calculation unless these charges are assessed as part of tuition or institutional fees. This restriction ensures that only relevant institutional charges are factored into the revenue calculation.
Q5: Are veteran benefits, such as the Monthly Housing Allowance under the Post-9/11 GI Bill, included in the 90/10 calculation?
A5: If the institution provides housing that is included in the institutional charges, then the housing allowance funds, which are part of the veteran benefits, should be included as federal revenue in the 90/10 attestation on a student-by-student basis. If the housing is off-campus and not provided by the institution, these funds are generally not included, as clarified in guidance from February 10, 2025.
Q6: How does the Department interpret overlapping failures in the 90/10 compliance timeline?
A6: Failures within the same calendar year, such as June 30 and December 31, 2024, are not considered separate failures unless they span two full consecutive years. An institution only faces a second-year failure if it fails in both the same month of two consecutive years or if subsequent attestations indicate ongoing non-compliance, as explained in the March 6, 2025 guidance.
Ineligible Programs
Q1: Can revenue from a new program approved by state licensing and accreditation bodies but not yet by the Department be included in the 90/10 calculation?
A1: Revenue from such a program may be counted if it meets specific criteria: it must not include courses transferable to Title IV programs, be taught by institutional employees at approved locations, and meet at least one of the following: state approval, accreditation, industry credentials, or licensing requirements. Revenue from programs solely offering test prep or self-study oversight cannot be included, as per guidance from December 16, 2022.
Q2: Is revenue from a stand-alone non-Title IV eligible program that is part of a Title IV eligible program countable?
A2: No. Revenue from ineligible programs must not include courses that are also part of a Title IV eligible program. The regulation restricts counting revenue from programs that offer content transferable to or overlapping with Title IV programs, ensuring strict separation of eligible and ineligible revenues.
Q3: What does the Department mean when stating ineligible programs cannot include courses from Title IV eligible programs?
A3: It means that ineligible programs should not offer courses that are identical or substantially similar to those in Title IV programs. If a course is offered in a Title IV eligible program, an institution cannot include revenue from a similarly titled or numbered course in an ineligible program, especially if transferability exists. This prevents institutions from inflating revenue figures through courses that are essentially the same as those in federal aid-eligible programs.
Q4: If a student enrolled in a non-Title IV program receives federal assistance, must the institution include those funds in the 90/10 calculation?
A4: Yes. All federal education assistance funds received by students or the institution, regardless of program eligibility, must be included unless explicitly excluded by regulation. This ensures comprehensive and accurate reporting.
Q5: How should institutions account for federal funds used to pay for both Title IV and non-Title IV courses?
A5: Federal funds are presumed to first cover charges for eligible programs. Any funds allocated to non-Title IV courses should be carefully documented, but institutions must avoid shifting federal funds deliberately or unintentionally between programs to maintain compliance.
Q6: Can revenue from an ineligible program with students attending virtually or in-person be included?
A6: No. The regulation requires that ineligible programs be conducted on campus or at approved facilities. Revenue from programs offered partly via distance education, especially if students attend virtually, cannot be counted toward the 90/10 threshold.
Q7: If an institution acquires another institution, can it include revenue from ineligible programs offered by the purchased entity?
A7: Generally, no. Revenue from ineligible programs at the acquired institution can only be counted if they are offered at recognized physical locations owned by the acquiring institution and taught by its instructors. If those locations do not meet the Department’s criteria for recognized locations, their revenue cannot be included in the 90/10 calculation or on the Electronic Certification Approval Report (ECAR).
Comingled Federal and State Funds
Q1: How should institutions handle funds provided by non-Federal entities that are comingled with federal education assistance funds?
A1: Institutions should seek clarification from the non-Federal sources to determine the exact federal portion of the funds. If the breakdown cannot be established, the entire amount must be excluded from the 90/10 calculation, as per the guidance issued on December 16, 2022, and updated guidance on May 31, 2023.
Q2: When funds from non-Federal sources are awarded to students and later returned or re-awarded, how should these be reflected in the 90/10 calculation?
A2: Returned funds should be proportionally deducted based on their original federal and state components. If the exact split cannot be determined, institutions should not include these funds in their calculation. Proper documentation and effort to determine the breakdown are crucial to maintaining compliance.
Income Share Agreements
Q1: What are the criteria for including payments from income share agreements (ISAs) in the 90/10 calculation?
A1: Payments on ISAs can be counted if:
– The charges are clearly identified and not exceeding institutional charges;
– The agreement specifies maximum payment amounts, duration, and associated fees;
– The institution allocates part of each payment as a return of investment capital and part as profit, excluding revenue or interest from the calculation.
Institutions must apply payments consistently and in accordance with federal regulations, ensuring that only the appropriate portion of payments is included.
Enrollment Limitations
Q1: Can an institution set enrollment caps based on funding sources such as Title IV or other federal funds?
A1: No. Discriminating against students based on their funding source violates federal regulations. The Department explicitly prohibits setting enrollment limits that favor or exclude students based on the type of federal assistance they receive.
Exiting Title IV Programs
Q1: Is it permissible for an institution to withdraw from the Direct Loan Program but remain in other federal aid programs like Pell or FSEOG?
A1: Yes. Institutions may choose to exit specific programs like the Direct Loan Program by following the proper closeout procedures outlined in 34 C.F.R. § 668.23. They must also disburse remaining funds to students as required and submit appropriate audit documentation.
Q2: What are the requirements for re-admission into the Direct Loan Program after withdrawal?
A2: Re-entry requires applying during the recertification process, submitting a closing audit, and receiving Department approval. Re-admittance is scrutinized to prevent attempts to circumvent compliance requirements, as explained in the guidance from December 16, 2022.
Disbursement Rules
Q1: Can an institution delay disbursement of Title IV funds and still remain compliant?
A1: No. Funds must be disbursed promptly to assist students in covering educational expenses. Delays beyond the end of the fiscal year are not permitted, per federal regulations.
Q2: Is it necessary to draw down funds before the fiscal year ends?
A2: No. Institutions are required to request disbursements timely within the fiscal year, but they do not need to physically request funds before year-end if they plan to disburse them later, as long as the disbursement occurs within the same fiscal year.
Subsequent Fiscal Years
Q1: When should deposits for future courses be counted?
A1: Funds should be counted in the fiscal year when they are applied toward a student’s charges, not when received as a deposit.
Q2: How should credit balances be treated in the 90/10 calculation?
A2: Credit balances from prior federal grants used to pay current charges must be included in the calculation for the fiscal year in which they are applied. This ensures that all federal assistance used to cover institutional charges is properly reflected.
Related Entities
Q1: How does the Department define related entities for 90/10 purposes?
A1: Related entities include grants from sources affiliated with or controlled by the institution, such as owners, management, or other related parties. Funds from unrelated foundations or private sources are generally acceptable, but involvement in the review or selection process may reclassify these as institutional scholarships, which must be included accordingly.
Q2: If an unrelated foundation provides grants but the institution or its affiliates review awardees, how should these funds be counted?
A2: Such funds are considered institutional scholarships if the institution or its affiliates are involved in selecting recipients. They must be included in the 90/10 calculation following the applicable regulations.
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