The Department of Education (ED) released additional guidance in the form of an attached Q&A document Friday to its original guidance issued on March 5. ED will continue to provide answers to questions it receives in response to the current guidance, as well as any future guidance. The questions covered topics related to COVID-19 and its implication on federal student aid as it relates to Federal Work-Study (FWS), enrollment changes, distance education provided by foreign institutions, cost of attendance adjustments and refunds, and Return of Title IV (R2T4) issues. This article highlights only some of the situations included in ED's Q&A. For full details, see the updated March 5 Electronic Announcement.
Institutional Refunds and Cost of Attendance Recalculations
As institutions have considered offering refunds of some institutional charges, questions have arisen about the institution's obligations to adjust cost of attendance (COA) and possibly financial aid packages to reflect those refunds. ED's guidance states that if an institution provides "a waiver or refund 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."
It's important to note that in most cases, recalculation of the COA is not required; however, if your institution chooses to have a policy to recalculate the COA, then you must follow your own policy. In addition, any resulting Title IV credit balances would be subject to current regulation under 668.164(h), which requires the funds be paid to the student or parent within 14 days, unless the institution has written authorization from the student or parent, as applicable to hold the credit balance. Even with authorization to hold the Title IV credit balance, the institution must pay any remaining balance on loan funds by the end of the loan period, and any remaining other Title IV funds by the end of the last payment period in the award year for which they were awarded.
Institutional refund policies (such as refunding room and board costs) are at the discretion of the institution.
The March 5 guidance stated that institutions may continue to pay FWS wages to students enrolled at an institution that closes temporarily due to the coronavirus, or for those whose employer closes as a result of the coronavirus. The new Q&A elaborated on that language and expanded the concept of closure to include situations where the student is unable to work, adding that "as long as the institution continues to pay its essential faculty and/or staff and continues to meet its institutional wage share requirement for the FWS program, it may pay students FWS funds for hours the students were scheduled to work, but could not work as a result of the COVID-19 outbreak." This situation could apply to institutions that have not fully closed but have moved classes online and therefore, some or all FWS students are unable to work.
Return of Title IV Funds (R2T4)
In response to questions about the R2T4 impact when institutions make changes to their academic calendar, ED clarified that "the institution should use the number of days in the revised payment period when determining the number of days in the period for R2T4 purposes for students who withdraw after the change has occurred." Additionally, schools do not need to perform a revised R2T4 calculation for any students who withdrew before the change to the institution's schedule.
Changes to Loan Period Dates
Also related to changes in academic calendars, ED also told institutions that if they "choose to extend terms that begin on or before June 1, 2020 they are not required to change loan period end dates in the Common Origination and Disbursement (COD) system if the loan period was scheduled to end on the term end date."
For institutions who are planning to shorten their academic year by extending Spring break for example, they must get permission from their School Participation Team to do so. At this time, NASFAA is not aware of the conditions of approval for those changes, including if COD loan period dates would need to be updated.
NASFAA continues to stay in touch with the Department of Education and asks that if your institution has a scenario not addressed in the first electronic announcement or ED's Q&A guidance, please email email@example.com. NASFAA has created a COVID-19 Web Center where you can stay-up-to date with NASFAA analysis, as well as AskRegs questions and answers regarding COVID-19.
Publication Date: 3/20/2020