As you explore your financial aid options, you’ll likely come across the term "Title IV" in reference to educational institutions.
The term can play a critical role in how you finance your education. Still, many aren’t exactly sure what Title IV stands for.
The good news is that you are about to take a deep dive into what Title IV accreditation means. Plus, we'll explore how this school classification can impact your financial aid. Here's what you need to know.
What Is A Title IV School?
Back in 1965, President Johnson signed the Higher Education Act (HEA) into law. The HEA's goal was to create more resources for financial institutions. And the hope was that the institutions would in turn provide an educational experience that prepared students for gainful employment.
The new law sought to provide financial assistance to students pursuing higher education through degree programs of at least two years. Title IV of the HEA is the section that provides the authorization for students to receive financial aid at qualifying higher education institutions.
The HEA lists the basic criteria that a school must meet in order to participate in Title IV student aid programs. Since the initial passage of the law, amendments have been added along the way.
Title IV Requirements
Private colleges, public universities, for-profit institutions, and vocational schools are all eligible to become Title IV schools. However, they’ll need to meet a few requirements to become Title IV accredited. To qualify, institutions must:
For-profit and vocational schools have an additional requirement. Beyond being licensed, the institution must offer the same program for at least two years before applying for Title IV status.
Why Title IV Status Matters
Is Title IV status something that students should pay attention to? Yes, here’s why Title IV status matters.
First, the Title IV status of an educational institution indicates its competency. The process of being a Title IV education institution is fairly extensive. Any institution will need to meet stringent regulations to achieve this goal. So you can be confident in a Title IV school's ability to provide a stellar educational experience to propel your career forward.
You may be putting your future at risk by enrolling in a non-accredited school. Without the Department of Education's seal of approval, it can be difficult to know what kind of an education that you'll get for your money.
Beyond the educational ramifications of working with a school that is not Title IV accredited, there are financial repercussions. If a school is not a Title IV school, students can't take advantage of the numerous federal student aid programs.
So if you enroll in a non-Title IV school, you'll be passing up the opportunity to tap into federal student loans, Pell Grants, federal work-study opportunities, and more. Also, most private lenders won't allow students to borrow funds to pay for a school that isn't a Title IV school.
Finally, even if you can secure financing for a non-Title IV school education, you'll probably have difficulties with refinancing in the future. That’s because most student loan refinancing lenders won't work with students that didn’t graduate from a Title IV degree program.
How To Verify A School's Title IV Status
It's fairly easy to figure out if a school is a Title IV school. The first place to look is on the Title IV schools list. You can download the federal school code list and search for your school. If you find your school on the list, the code that's listed next to it is what you'll enter on your FAFSA.
If you have trouble determining a school's Title IV status, consider contacting the Federal Student Aid Information Center. Also, you can use the live chat feature or call 1-800-433-3243 to ask about a particular school directly.
Lastly, you can reach out to the school itself to find out more about its Title IV status. The financial aid office should be able to tell you whether or not the school has received Title IV accreditation.
Should I Attend a School That's Not Title IV?
If the particular education institution you're interested in is not a Title IV school, consider this lack of accreditation as a warning sign. It doesn’t necessarily mean that you won’t receive a great education. But it does ensure that you won’t have access to the federal funding you may need.
There may be a few rare circumstances where it could make sense to attend non-accredited school. But in most cases, it's likely a better idea to choose an institution that's proven itself in the eyes of the Department of Education.
What Happens If My School Loses Its Title IV Status?
While this is unlikely to happen, it's technically possible to run into a situation in which you're attending a Title IV school that suddenly loses its accreditation. If that happens, it can be a difficult time.
As a student in that situation, you may be forced to transfer to another Title IV school willing to accept your credits. Additionally, you may be able to have any student loans you had taken out to fund your education at that institution discharged.
Title IV status can have a big impact on your educational outcomes. Although it's possible to get a great education anywhere, Title IV status ensures that your school has met the stringent requirements of the Department of Education to receive its accreditation.
Beyond the educational component, anyone that wants access to federal student aid programs should rule out any schools that haven't achieved Title IV status.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared toward anyone wanting to earn more, get out of debt, and start building wealth for the future.
Editor: Clint Proctor Reviewed by: Chris Muller