Institutions must be sure that students who receive SDS scholarships meet the set eligibility requirements specified in statute and in regulations. A description of the eligibility requirements follows.
A student applicant must be a citizen or national of the United States, or a lawful permanent resident of the United States, the Commonwealth of Puerto Rico, the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa or the Trust Territory of the Pacific. A student who remains in this country on a student or visitor's visa is not eligible.
Students must be enrolled full-time in programs leading to the following degrees in order to be eligible for SDS funds:
[Sections 737(d)(1)(A) of the Public Health Service Act]
Any student who receives SDS funds must come from a disadvantaged background. The definition of disadvantaged background appears in Chapter 2, Section 1, Institutional Eligibility Requirements, Recruiting and Retaining Disadvantaged Students.
[Section 737(c)(1) of the Public Health Service Act]
The student must be in need of financial assistance in order to pursue the full-time course of study at the health professions or nursing school in which he or she is enrolled or accepted for enrollment. The law specifically states that schools are to give preference to students for whom the cost of attendance would constitute a severe hardship.
In determining financial need for potential SDS recipients, the school must take into consideration the:
[Section 737(c)(2) of the Public Health Service Act]
HEALTH PROFESSIONS schools participating in the SDS program must:
The information collected by the institution to make an assessment of a student's need for SDS funds must be extensive enough to include student's, spouse's and parents' current income, assets and other resources such as trust funds or support from other family members.
Developing student budgets requires careful identification of reasonable costs necessary for the student's attendance at the school, including any special needs or obligations of each student or costs common to particular groups of students. The school must develop student budgets which treat students within groups consistently, but are sensitive to individual circumstances. Schools must be able to document the various student budgets used in determining financial need. Using the Title IV requirements for developing costs of attendance is an appropriate approach for administering SDS funds.
The Department of Health and Human Services recognizes that from time to time an individual student's budget may deviate from the standard cost of attendance because of unusual circumstances. Financial aid administrators should use their authority to make changes to the standard student budget judiciously. Further, the school must carefully document all such changes.
[Section 737(d) of the Public Health Service Act]
In the awarding of SDS funds, the schools or programs give preference to eligible disadvantaged students for whom the cost of attending an SDS school or program would constitute a severe financial hardship.
Beginning in academic year 2000-01, schools or programs must also give preference, in the awarding of SDS funds, to eligible disadvantaged students who have participated in an academic enrichment program funded in whole or in part by the Health Careers Opportunity Program (HCOP), or by the Nursing Workforce Diversity (NWD) Program (formerly Nursing Educational Opportunities Program (NEOP)).
There is no statutory or regulatory dollar amount cap on SDS awards to eligible disadvantaged students. However, schools must use allocated SDS funds to make awards for all or part of a student's total budget in a manner that will best meet its eligible students' needs. In addition, they must offer SDS funds to eligible students in the order of greatest need.
Although there is no absolute cap on any individual SDS award, the amount may not exceed a recipient's cost of tuition expenses, other reasonable educational expenses and reasonable living expenses as designated by the institution. More detailed information on constructing institutional standard student budgets appears in the previous section. Schools also may not award SDS funds to a student that exceed that student's financial need.
[Section 737(d) of the Public Health Service Act]
There are no explicit requirements for disbursing SDS funds to eligible students who have been designated as scholarship recipients. However, requirements for other programs and good practice strongly suggest that funds should not be disbursed in one lump sum. Instead, awards that are earmarked to pay for tuition should be disbursed at the beginning of each period within the academic year (e.g. semester, trimester, quarter).
Disbursing funds in logical increments throughout the academic and calendar years helps students budget their resources. In addition, this approach protects the institution in case an SDS recipient drops below full-time student status; institutions must return SDS funds to the Department of Health and Human Services when a recipient is no longer a full-time student or ceases to be a student in good standing due to academic failure, disability or death. Note that an institution does not have to return these "recovered" funds if the institution is able to award the money to another student who meets all the eligibility requirements.
Statute governing the SDS program does not specify requirements for verifying student information. However, good practice dictates that institutions should verify student information using the same procedures used for other programs. Readers are directed to Health Professions, HPSL, Chapter 3, Section 2, which discusses verification for the Health Professions Student Loan (HPSL) Program. Financial aid administrators should also consider applying the same verification requirements to the SDS program that are mandated under the Higher Education Act for the Title IV programs administered by the Department of Education.
Statute and regulations governing the SDS program do not specify requirements for award letters to students. Once again, good practice supports providing written notification of awards from any source--including SDS--to students. The Department of Health and Human Services urges institutions to provide students with award letters that also include the cost of attendance and family contribution figures used to determine financial need along with an itemization of resources and financial aid programs.
SDS awards may not exceed the financial need of the student or the cost of attendance. This does not prohibit financial aid administrators from making adjustments to the cost of attendance or expected family contribution figures to more accurately reflect an individual student's financial circumstances. However, financial aid administrators must be judicious in their exercise of professional discretion in these instances. Further, they must carefully document all suchchanges. See Chapter 3, Section 1D for more information on determining students' financial need.
[Section 737(d) of the Public Health Service Act]
Institutions must maintain student records as needed for audit purposes. Good practice suggests that these records contain the same types of information that are maintained for the other health professions and nursing programs. For example, institutions should consider keeping the following information about each SDS recipient:
No requirement stipulates that these records should be maintained in files that are safeguarded against fire, theft and tampering. However, good practice again strongly supports institutional efforts to keep SDS records--as well as all student records--in files that resist damage from various sources.
The Department of Health and Human Services permits institutions to maintain their records in a variety of formats at the option of the school. Record keeping formats include:
