Starting July 1, 1998, the U.S. Department of Education will put into effect a new method to test the financial viability of schools participating in Title IV programs. These regulations were published in the November 25, 1997 Federal Register, Volume 6, Number 227, on pages 62829 through 62887, and are also located on the website of the U.S.D.E. at http://www.ed.gov/finaid/prof/resources/finresp/finanrep.html.

Instead of meeting 3 of 3 individual tests, the Department has come up with a new formula giving schools one overall score of between -1 and 3 to determine viability. Essentially, a school can score as high as 3, meaning that the school is financially healthy enough to participate, down to the lowest score of -1, meaning the school is not financially healthy enough to be considered financially responsible.

To help schools determine if they meet the requirements, NACCAS has developed an easy to use calculation form. All you need to do is enter your financial information, and it will tell you how you will fare in the Department's calculation. The primary benefit of this is that you will know prior to submitting the school's official audited statements to the Department whether or not it meets the test.

Since the categories listed in the calculation table may not be the same categories used by you, we have provided explanations where necessary to help you in entering the correct amounts. If you see the text in blue and underlined, it will provide a link to the explanation.

The Department of Education has tested this form as well as reviewed the explanations listed. However, you must enter the correct amount for each category to ensure that you come up with the same score as the Department.

Please keep in mind that this form is for private, for profit schools only. The department uses different calculations for public and private, non-profit schools. We hope that you find this calculation form useful, and we welcome any comments or suggestions you may have.

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