ED to Publish Interim Final Rule Barring Undocumented, International, and Non-Title IV Eligible Students From CARES Act Emergency Grants

By Owen Daugherty and Hugh Ferguson, NASFAA Staff Reporters

The Department of Education (ED) on Thursday issued a preview of its interim final rule regarding the distribution of coronavirus emergency relief grants to students, doubling down on its position that only Title IV-eligible students can receive the funding.

The rule, which will become effective immediately once published in the Federal Register, comes after months of changing and often conflicting guidance from ED that has created obstacles for institutions trying to disburse emergency grants to students. ED clarified in the rule that enforcement of the Title IV eligibility interpretation will not be retroactive before the date of publication in the Federal Register, but reminded institutions of its prior guidance regarding funds issued to individuals living in the country illegally, those enrolled in the Deferred Action for Childhood Arrivals (DACA) program, and international students. 

At the heart of ED's argument for restricting the emergency grants to only Title IV-eligible students is the lack of a definition for the word "student" in the statute, the ambiguity in which Congress wrote the legislation, and concern over the potential for fraud and abuse, ED asserts. 

In the rule, ED points to language in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that includes an "implicit reference to Title IV terms immediately after the phrase 'emergency financial aid grants to students,'" as well as "explicit references to that same Title IV standard following the phrase 'grants to students'" as its reasoning for restricting the emergency aid. 

"It's clear the CARES Act was written to help Americans recover from the coronavirus pandemic," said Education Secretary Betsy DeVos, in a statement. "U.S. taxpayers have long supported U.S. students pursuing higher education, and this rule simply ensures the continuity of that well-established policy. As I've said since the law passed, my first goal was to get these funds to eligible students in need as quickly as possible. Today's action helps erase any uncertainty some institutions have expressed and helps make sure we can support America's students facing the greatest needs. We have a responsibility to taxpayers to administer the CARES Act faithfully, and that's exactly what we're doing."

But Sen. Patty Murray (D-Wash.), ranking member on the Senate Health, Education, Labor, and Pensions Committee, called the rule "cruel."

"As students across the country are struggling to make ends meet in the face of unprecedented financial challenges, Secretary DeVos' efforts to deny some much-needed aid is cruel," Murray said in a statement. "These extreme eligibility requirements will not only harm students, but they are also contrary to Congressional intent. I'll keep fighting to ensure that students get the relief they need — and that Secretary DeVos implements the law as Congress intended."

The rule contained multiple references to concern over fraud and abuse both from students and institutions. Even though the emergency grants are required to go directly to students, and institutions are required to publicly report on the distribution, ED argued that the "potential for waste, fraud, and abuse is significant when institutions of higher education are given the opportunity to quickly make cash awards to students, particularly when institutions are rightfully concerned about declining enrollments and the loss of ancillary revenue as a result of COVID-19," suggesting institutions might keep the funds for themselves.

ED said students who have not filed a FAFSA, but would otherwise be Title IV-eligible may submit a self-certification form designed by their institution. The rule does not provide any insight on what schools should do if they have any conflicting information about a non-FAFSA filer's eligibility for Title IV funds. The department suggested that institutions could encourage students who currently do not receive Title IV aid to submit the FAFSA in order to determine eligibility.

Additionally, while ED said it had considered waiving some Title IV eligibility requirements that would preclude students from receiving aid — such as drug offenses or default — ultimately "it was determined that eliminating some eligibility criteria and not others would not be fair across groups of students and would not allow institutions to maximize the use of their existing eligibility confirmation processes."

Still in question is whether a student must be enrolled in a Title IV-eligible program to receive an emergency grant. In the rule, ED states that "student" is "defined as an individual who is, or could be, eligible under Section 484 of the HEA." Although Section 484 requires that a student be enrolled in a degree, certificate, or other program leading to a recognized educational credential at an eligible institution, there is no mention of program eligibility in Section 484. Rather, program eligibility is in a different section of the HEA, Section 481. 

However, in the later discussion of the rationale for its rules, ED states that "interpreting 'student' to track Title IV eligibility for purposes of emergency financial aid grants to students will ensure that institutions are only providing funds to students who are enrolled in an eligible program [emphasis added] at an institution and are maintaining SAP in their program, among other requirements." ED's press release states that those who are in non-Title IV-eligible programs are ineligible to receive the funds. NASFAA has followed up with ED on this issue.

In guidance released on April 21, ED said emergency grants for students would only be available to those who are eligible to receive Title IV aid, cutting out not only international students, those enrolled in DACA, and those living in the country illegally, but also U.S. citizens who haven't registered with Selective Service, or have a prior drug conviction, among other things. This marked an about-face from its initial CARES Act guidance, which contained the certification agreement that included no restrictions on student eligibility, and was quickly met with pushback from dozens of Democratic lawmakers who accused ED of undermining "clear congressional intent" written in the legislation.

Students who are living in the country illegally, as well as those in the DACA program — who are waiting for a Supreme Court decision that will determine what, if any, authority the Trump administration has to potentially end the program — remain ineligible for aid per ED's rule, which said it could not identify "any specific language" in the CARES Act to signify that there was congressional intent to disburse funding in this manner.

ED stated that the rule "is meant to clarify any questions about eligibility so the funds can be disbursed in a timely manner," although many schools have already disbursed large portions of their allocated funding to students, according to a survey of NASFAA member institutions. ED was also publicly pressuring schools in April to disburse funds to students quickly.

In order to track this rapidly changing and conflicting guidance, NASFAA has outlined important dates detailing new guidance, altered guidance, and calls for comment on aspects of the Higher Education Emergency Relief Fund.

The interim final rule could serve as a rebuttal to a pair of legal challenges, from California Community Colleges system and Washington state's attorney general, which could further shape the rollout as well as the timeframe of aid delivery.

ED has argued that any court ruling that would impede its ability to dole out guidance, "would profoundly harm the Department and the public interest by cutting short administrative deliberations on an important and time-sensitive matter."

For more information and resources on how the spread of the novel coronavirus is impacting student financial aid, please refer to NASFAA's COVID-19 Web Center.

 

Publication Date: 6/11/2020


Anthony M | 6/12/2020 2:47:04 PM

It will become effective immediately, meaning it will not apply to funds disbursed prior to that date?

Christopher Von R | 6/12/2020 9:50:13 AM

In honor of the earlier NASFAA mention:
What the difference between a Franz Kafka short story and a Dept of Ed Interim Final Rule?
One is a surreal tale of absurdity, alienation and anxiety and the other is a short story by Franz Kafka.

Charles M | 6/12/2020 9:46:14 AM

...and the whiplash continues...

David S | 6/12/2020 7:34:48 AM

DeVos to Congress: This is what you intended.

Congress: Uh, no it's not. Absolutely not.

DeVos: Yes it is. Trust me.

You must be logged in to comment on this page.

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.

Related Content

Thoughts From a Past National Chair: Administering CARES Act Funding – Building a Plane While Flying in a Storm

MORE | ADD TO FAVORITES

Oversight Report on Student Loan Disability Discharge Process Finds Program Design Weakness

MORE | ADD TO FAVORITES

VIEW ALL
View Desktop Version