It is NASFAA's understanding that this will not impact a student's Title IV aid as long as the classes continue to count toward the student's degree completion requirements. See AskRegs Knowledgebase Q&A, Can We Award Title IV Aid To Pay for a Course That Does Not Count Toward the Student's Degree Completion Requirements?
The U.S. Department of Education (ED) clarified that the school does not have to factor in classes a student takes as pass/fail into the qualitative measurement of satisfactory academic progress(SAP) as long as the course is factored into the quantitative measurement. That being said, we believe the school should treat pass/fail and credit/no-credit courses in the same way as other coursework noted in 34 CFR 668.34(a)(6):
"(a) Satisfactory academic progress policy. An institution must establish a reasonable satisfactory academic progress policy for determining whether an otherwise eligible student is making satisfactory academic progress in his or her educational program and may receive assistance under the title IV, HEA programs. The Secretary considers the institution's policy to be reasonable if- *** (6) The policy describes how a student's GPA and pace of completion are affected by course incompletes, withdrawals, or repetitions, or transfers of credit from other institutions. Credit hours from another institution that are accepted toward the student's educational program must count as both attempted and completed hours;"
The school should review its SAP policy to see how it treats pass/fail and/or credit/no-credit classes, and apply that policy consistently.
Beyond that, the school should consult with its accrediting agency to find out if there are any accreditation implications.
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