Trending AskRegs Q&A: If We Provide Emergency Funds to Students Due to Coronavirus, Is It Estimated Financial Assistance?
Scenario: Our institution is considering creating an emergency fund for students who have been affected by COVID-19. It would be money given directly to the student. In other words, it would not be processed on their student account and would not have stipulations on what it can be used for.
Answer: Yes. Under 34 CFR 685.102(b) and 673.5(c) Estimated financial assistance, such emergency funds that are provided to students are considered estimated financial assistance (EFA) for Title IV purposes. According to guidance NASFAA has received from the U.S. Department of Education (ED) in the past, this is true even if the emergency funds are not earmarked to cover tuition and fees or another cost of attendance (COA) component, and even if those funds are not processed through the student’s ledger account at the institution.
The March 5, 2020 Electronic Announcement allows schools to exercise professional judgment (PJ) to increase a student's COA to include educationally related expenses and to offset the emergency funds. As with all PJ adjustments, they must be performed based on special circumstances and on a case-by-case basis, which must be documented in the student's file. The school decides what documentation it deems appropriate for a PJ adjustment. It can be a signed statement, actual receipts for expenses, or other appropriate documentation--the more the better.
Student Aid Index: For additional information, try NASFAA's Student Aid Index. It is a central hub of all the important financial aid resources you need with direct links to legislation, regulation, Dear Colleague Letters, and other ED and NASFAA references. It is updated on a rolling basis with the latest news and changes. Search Professional Judgment.
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Publication Date: 3/18/2020