Can a school earn interest earnings on an account that the U.S. Department of Education deposits Title IV funds into upon request from the school? If so, what is the limit?

Can a school earn interest earnings on an account that the U.S. Department of Education deposits Title IV funds into upon request from the school? If so, what is the limit?

• A. Yes, but only up to $500 annually of the initial revenue to pay for the administrative expense of maintaining the account.
• B. Yes, but only up to the cost of the initial revenue to pay for the administrative expense of maintaining the account.
• C. No, as a school may not retain interest earnings from Title IV funds.
• D. Yes, with no limit on interest earnings.

Answer: (A)

When Title IV funds are deposited into a school’s account at the school’s request, the school may earn interest on those funds, but only up to a small, set amount each year to help cover administrative costs. The limit is $500 per year. If the interest earned is $500 or less, the school may keep it to pay for the administrative expense of maintaining the account. If more than $500 is earned, the excess must be returned to the Department. This rule exists to help offset the administrative burden of handling Title IV funds without allowing schools to retain large amounts of interest.

When Title IV funds are deposited into a school’s account at the school’s request, the school may earn interest on those funds, but only up to a small, set amount each year to help cover administrative costs. The limit is $500 per year. If the interest earned is $500 or less, the school may keep it to pay for the administrative expense of maintaining the account. If more than $500 is earned, the excess must be returned to the Department. This rule exists to help offset the administrative burden of handling Title IV funds without allowing schools to retain large amounts of interest.