Trending AskRegs Q&A: Are We Required to Adjust COA or Awards if We Refund All or Part of Tuition, Fees, Room, or Board Due to Coronavirus?
Scenario: As a result of the COVID-19 outbreak, we are planning to close our dormitories, etc. and we plan to refund a portion of the costs for students' room and board. We are also considering a partial refund of tuition and fees.
Answer: According to the U.S. Department of Education (ED), "No. If, as a result of the COVID-19 outbreak, you provide a refund or waiver of expenses for all or part of a student’s tuition, fees, room and board charges, or other institutional charges, or if you become aware that a student has moved off campus for the remainder of the term, the Department will not require a re-evaluation of the student’s cost of attendance. Therefore, you are not required to make changes to a student’s Title IV awards on the basis of such changes."
The above guidance has been excerpted from the COVID-19 FAQs document attached to ED's March 5, 2020 Electronic Announcement.
It is NASFAA's understanding based on the above guidance that, if schools are not required to recalculate the COA or revise the student's Title IV financial aid, then the amount of the refund is not considered estimated financial assistance (EFA).
On the other hand, such refunds may cause Title IV credit balances on students' accounts. Schools are reminded that all cash management regulations in 34 CFR 668.164 and 668.165 still apply. For example, Title IV credit balances still must be delivered within required timeframes under 668.164(h)(2):
"(2) A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than—
(i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of that payment period; or
(ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period."
As another example, under 668.165(b), the school can hold Title IV funds on the student's ledger account for subsequent payment periods within the same award year, but only with the student's written permission to do so. Even then, the school must "pay any remaining balance on loan funds by the end of the loan period and any remaining other title IV, HEA program funds by the end of the last payment period in the award year for which they were awarded."
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Publication Date: 3/20/2020