34 C.F.R. § 86.103
(b)
(1) An IHE shall retain the following records for three years after the fiscal year in which the record was created:
(2) If any litigation, claim, negotiation, audit, review, or other action involving the records has been started before expiration of the three-year period, the IHE shall retain the records until completion of the action and resolution of all issues that arise from it, or until the end of the regular three-year period, whichever is later.
(Approved by the Office of Management and Budget under control number 1880-0522)
(Authority: 20 U.S.C. 1145g)