NASFAA received clarification from the Department about the distribution of additional Federal Work Study stimulus funds and likely reporting requirements for additional FWS and Pell Grant funds in the American Recovery and Reinvestment Act (ARRA).
The Department made it clear that additional FWS stimulus funds were allocated to schools as part of the final allocations of campus-based funds recently made available to schools. Congress essentially increased the FWS appropriation, with no spending strings attached. This allowed the Department to make a single allocation of all available funds - both regular appropriations and the additional $200 million in stimulus funds. Roughly 16 percent of the 2009-10 FWS allocation comes from the stimulus bill.
NASFAA is aware that some institutions did not receive additional FWS funding, despite the additional $200 million provided by the ARRA. The Department explained that there were several reasons that some institutions did not receive additional funds.
Some institutions didn't receive additional funds because the Department does not allocate more than the school requested on its Fiscal Operations Report and Application to Participate (FISAP). Unfortunately, some institutions did not request more FWS funds - even though they could use additional funds - because the campus-based programs have been flat funded for so long that requesting additional funds seemed futile. The timing of congressional action in passing the stimulus and annual appropriations funds for FWS meant that institutions had to request allocations without knowing how much funding would be available - FISAPs requesting 2009-10 funds were due Oct. 1, 2008.
NASFAA has alerted the Department that some institutions could use additional FWS funds, but did not request it on the FISAP because of the recent flat funding. Unfortunately, the Department has already made final allocations, but NASFAA is working to see what (if any) options the Department might have to help these institutions. NASFAA will keep you informed of any developments as they happen.
If you wish you had asked for more FWS funding (or need to explain to your administration why you had not), there are several things to keep in mind. The FISAP asks institutions to request only "what you think you can spend," and there is an "underuse" penalty. Institutions that spend less than 90 percent of their allocation, have their subsequent allocation reduced by the amount that was not spent. The Department said that there is no distinction between unspent regular allocation funding and unspent stimulus funding. Institutions that spent less than 90 percent of their 2007-08 allocation also did not receive additional FWS stimulus funding. They received less due to the underuse penalty.
Finally, some institutions did not receive additional FWS funding because their base guarantee exceeds their fair share.
Whatever the amount of your allocation, the Department considers that roughly 16 percent of it is from stimulus funds. The cover letter to your allocation notice shows that dollar amount through the use of two separate funding transactions, although they do not specifically mention "stimulus" funding.
Some institutions have expressed concern about tracking and reporting requirements for stimulus funds and if they should be tracked separately. The Department has indicated that it is unlikely that institutions will have to track or report the stimulus portion of FWS funds.
The Department used the same approach to disburse additional Pell Grant funds. All available funds were taken into account - without differentiating stimulus funds - to determine the Pell Grant disbursement and payment schedules. If asked, the Department can determine on a centralized level how those funds were used. Thus, schools and states will not be asked to provide data on the stimulus portion of Pell Grant funding.
Posted 04/09/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.
