Disaster-Related Guidance: Dealing with the Aftermath of Katrina
NASFAA is currently working with the Department of Education to provide the financial aid community with guidance regarding help for those schools affected by Hurricane Katrina.
In the meantime, NASFAA has compiled the following information for your review. As more news develops, NASFAA will post the information immediately. Watch Today's News for future developments or visit the new Web page on Katrina at http://www.NASFAA.org/Katrina.asp.
General Guidance for Disasters
Dear Colleague Letter GEN-04-04 (February 2004) gives the Department of Education's standard general guidance for institutions, students, borrowers, lenders, and guaranty agencies affected by a federally-declared disaster.
School-Specific Assistance
An institution may obtain more specific help from its ED School Participation Team (formerly called the Case Management Team). However, it is NASFAA's understanding that ED is working to get more specific Katrina-related guidance out. NASFAA has offered to assist ED in that effort and we are waiting for more information.
Consortium Agreements
Affected schools, if they have sufficient functionality, may allow their students to attend elsewhere for credit toward their degree, under a written agreement between the student's home school and host school. Given the magnitude of the disaster, there is good reason to question whether affected schools are in a position to execute such agreements. It is NASFAA's understanding that ED is currently working on ways to facilitate the ability of other schools to pick up students who were going to attend institutions affected by Katrina.
Borrowers in Repayment
A lender may grant forbearance if it determines a borrower's ability to make payments has been adversely affected by a natural disaster. A lender must grant administrative forbearance to a borrower who resides in a disaster area as designated by the President. 682.211(f)(11), (g), and (i); Disaster Letter 99-28.
Impact on Institutional Eligibility
Normally an institution that closes or stops providing educational programs loses its eligibility to participate in Title IV. However, if the reason for the closure or temporary cessation of educational programs is a natural disaster that directly affects the institution, this provision does not apply. 600.40(a)(1)(iii) and 668.26(a)(1).
Posted September 2, 2005 on www.NASFAA.org, the Web Site of the
National Association of Student Financial Aid Administrators (NASFAA).
Copyright 2005.
Please submit Web Site questions or comments to web@nasfaa.org
