Key Title IV compliance trends auditors saw in 2025

The Department of Education has traditionally released an annual “Top 10 Findings” report to highlight the most frequent educational institution compliance issues, and to support transparency. Last year, we reviewed the Department’s top 2023 findings and compared them to what we were observing in our own compliance examination work. The Department has not released an updated list since then. So, we will focus on highlighting the trends we’ve identified through compliance examinations during 2025.

Top issues

The top compliance issues have been reoccurring for several years.

Inaccurate or late student status reporting: 

• What it is: Schools must report enrollment changes to the Department at both the campus and program level accurately and on time.
• Why it matters: The Department depends on accurate, timely enrollment reporting.  Schools must review, update and verify student enrollment statuses, program information, and effective dates in NSLDS – via the Enrollment Reporting Submittal file or Enrollment Maintenance page – at least every 60 days.
• Recommendation: Conduct research to understand reporting deadlines (typically every 30 to 60 days). Identify which changes you must make in these batch updates.

Return to Title IV calculation errors: 

• What it is: Schools must perform an R2T4 calculation whenever a Title IV aid recipient withdraws during a payment period or period of enrollment. The school must determine the amount of Title IV aid earned by the student as of their withdrawal date.
• Why this matters: The R2T4 process determines Title IV funds are returned on time, ensuring proper adjustments to student ledgers and COD disbursement records. It also guides correct post-withdrawal disbursement handling.
• Recommendation: Use the current Department guidance (e.g. annual Federal Student Aid Handbook). Consult third-party servicers or even your auditor if unsure.  

Student credit balance deficiencies: 

• What it is: A credit balance forms when a Title IV award amount to a student exceeds allowable charges on record like tuition, fees, and room and board. The student or parent borrower is entitled to this remaining aid balance within 14 days of creation, or after the first day of class in the payment period.
• Why this matters: Students rely on timely refunds to cover needed educational expenses.
• Recommendation: Charge each item by payment period or use a separate subsidiary ledger. Implement a system to review and pay for credit balances in a timely manner. Review processes with accounting staff if unsure.

Notable trends

More schools failing Clery Act requirements

This past year saw a notable uptick in schools failing their campus crime awareness requirements. A school must share its annual security report to all enrolled students and current employees by October 1 of each year. They failed to do this for a few reasons, including:

• Missing the required three-year information
• Missing certain required fields or disclosures
• Source documents not matching annual security report documentation

As these findings tend to carry some of the larger fines and penalties assessed by the Department, schools should annually review Department guidance to ensure their policies reflect all requirements in 34 CFR Part 668, Subpart D – Institutional and Financial Assistance Information for Students, especially section 668.46 on institutional security policies and crime statistics.

Manual errors increasing student outcome tracking issues

We’ve also seen a rise in inaccuracy or failure to report graduation and transfer-out rates over the past year. This record of certificate-seeking students must be shared to all enrolled students through specific publications. Instead, schools are either not retaining the supporting information they submitted to Integrated Postsecondary Education Data (IPEDs) or are using inaccurate information to calculate these rates. This has mainly been due to manual errors or turnover of personnel responsible for updating and maintaining the annual security report and/or graduation rate records.

We recommend annually reviewing all school disclosures to ensure accuracy and completeness. The Department offers trainings throughout each year to educate school administrators on best practices, with the goal of resolving confusion and knowledge gaps to limit compliance failures. Information can also be found here.

Next steps

Title IV compliance is complex, and nuanced requirements continue to cause compliance examination findings each year. Building knowledge and using available guidance can help prevent future issues. When questions arise, consult your accountant or contact the Department directly. 

While some findings may be unavoidable, everyone’s goal should be to minimize them. Our Title IV audit team is available year-round to provide guidance and support to help ensure your school stays compliant.