Big changes to financial aid regulations may be put into effect as soon as July 1, 2011, according to a statement from the United States Department of Education.

These new student aid rules were established to protect both taxpayers and student borrowers, the statement said.

According to the statement, these new proposed regulations will affect student aid programs at for-profit, non-profit and public institutions across the country.

Many institutions have been engaged in aggressive and misleading recruiting practices in order to enroll students and gain tuition payments loaned from the federal government, the statement said.

“Students who are unprepared for college are being recruited by universities who tell them they will get jobs upon graduation,” said John Wiley, former University of Wisconsin chancellor and interim director of the Wisconsin Institutes for Discovery.

Wiley said these students often drop out, but the school still receives the student’s financial aid payments from the government.

He said these new regulations will change the financial aid process and hopefully stop these shady recruitment processes.

Although the regulations will ultimately affect many universities across the nation, they will not necessarily affect UW, Wiley said.

“At UW-Madison, approximately 87 percent of each year’s freshman class will graduate within four years, of those that don’t, 7 or 8 percent will transfer to another school and earn a degree from somewhere else. We are in the 90th percentile for success rates for students we admit as freshmen,” Wiley said.

Also according to the statement, the new financial aid regulations will provide consumers with better information about the effectiveness of career college training programs and ensure only eligible students or programs receive financial aid.

The regulations focus on 14 key issues with financial aid programs.

According to the statement, new requirements for universities include disclosure of graduation and job placement rates, approval of additional financial aid programs and ensuring that only students with a high school diploma and satisfactory academic progress receive financial aid.

The new rules also establish how institutions should reward financial aid to eligible students, clarifies what is deemed an eligible course and states how to determine when a student has withdrawn from an academic program.

“Many of the revisions aren’t applicable to our school, however, the new regulations on student withdrawals will be UW’s biggest concern,” Michelle Curtis, UW associate director of financial aid, said.

According to the statement, current loopholes complicate the measure of how much federal funding must be paid back if a student drops out of a program measured in credit hours.

The statement said the new regulations eliminate these loopholes and clarify the calculation of returning federal funds to the Department of Education by defining when a student is considered withdrawn from a program.

“This new regulation might not be in the best interest of the students,” Curtis said.

The regulations could still be changed before the July 1, 2011 deadline to give the Department of Education a chance to review feedback on its current proposal, according to a statement.