How Can Schools Use Campus-Based Funds As Emergency Aid?
This Q&A has been updated to reflect the nonfederal share guidance from the May 15, 2020 Electronic Announcement, limiting the waiver to FWS wages or FSEOG disbursements paid to students on or after March 13, 2020. Please note that we are still awaiting guidance from ED on whether a FAFSA or verification is required.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) makes two types of funding available to institutions to provide emergency aid to students as a result of the Coronavirus (COVID-19) outbreak—campus-based Federal Supplemental Educational Opportunity Grant (FSEOG) funds and Higher Education Emergency Relief Fund (HEERF) grants to students. This article only addresses the campus-based funds.
In the May 15, 2020 Electronic Announcement the U.S. Department of Education (ED) provided guidance on the nonfederal share waivers for Federal Work-Study (FWS) and FSEOG, as well as the use of remaining FSEOG funds. If NASFAA receives further guidance, we will update this AskRegs Knowledgebase Q&A.
Under the CARES Act, the nonfederal share requirements of the FWS and FSEOG programs shall be waived for the 2019-20 and 2020-21 award years in cases where the nonfederal share is paid by the institution. In other words, schools are not required to provide an institutional share for any FWS or FSEOG awards made for either award year; this applies retroactively to awards already made for either award year. ED recognized this CARES Act provision in the May 15, 2020 Electronic Announcement, but applied a narrower interpretation than the CARES Act itself. The nonfederal share is waived only for FWS wages or FSEOG disbursements paid to students on or after March 13, 2020.
The CARES Act does not waive the nonfederal share requirement for third-party private for-profit organizations that employ an institution's FWS students under an off-campus agreement under 34 CFR 675.20(b). Under such arrangements, the federal share cannot exceed 50 percent, and the private for-profit organization still must pay the nonfederal share of the student's compensation.
Note that if your institution decides to stop providing its institutional matching funds into its FSEOG fund, the institution will have less FSEOG funds to spend and will deplete those funds more quickly. The CARES Act does not require institutions to stop making the nonfederal match; that is the institution’s choice.
During a period of a qualifying emergency (see below), the CARES Act allows an institution to transfer up to 100 percent of its unexpended FWS allocation into FSEOG (but not from FSEOG to FWS). This includes unexpended initial and supplemental fund allocations.
Institutions are allowed to use any portion of their FSEOG allocation, including any funds transferred from FWS as noted above, to award emergency financial aid grants (Emergency FSEOG). Emergency FSEOG funds can then be spent to assist undergraduate or graduate students in paying for unexpected expenses and to cover unmet financial need as the result of a qualifying emergency. According to the April 3, 2020 Electronic Announcement, this can include paying Emergency FSEOG to students who would have otherwise received FWS wages had they started their job prior to the national emergency.
Other scenarios of when Emergency FSEOG funds might be used include, but are in no way limited to:
Note: The law does not define “unexpected expenses.” This is left to schools unless ED defines it in future guidance. If/When that happens, we will update this AskRegs Q&A.
Except as noted below, recipients still must meet the Title IV general student eligibility criteria under 34 CFR 668.32, but standard FSEOG awarding rules are waived for Emergency FSEOG only. Emergency FSEOG funds:
Note: Because CARES does not waive the general student eligibility criteria, it is NASFAA's understanding that a FAFSA is required for the student eligibility database matches (even for parent PLUS). NASFAA has asked ED to confirm this. NASAA has also asked whether verification will be required for graduates or undergraduates when awarding Emergency FSEOG. As soon as we hear from ED, we will update this AskRegs Q&A.
This gives institutions broad flexibility to determine their own packaging or selection criteria used to award the Emergency FSEOG funds to its students. Since this is entirely the school’s discretion, NASFAA will not be reviewing or approving unexpected expenses or packaging criteria for schools.
In determining eligibility for Emergency FSEOG, institutions may contract with a scholarship-granting organization designated for the sole purpose of accepting applications from or disbursing funds to students, if the organization disburses the full allocated amount provided to the institution to the recipients and no FSEOG funds are used to pay for the contract.
Standard awarding rules are not waived when packaging non-emergency-related FSEOG. Refer to Volume 3, Chapter 6 of the FSA Handbook. This means you will want to create two award codes within your financial aid management system (FAMS) so that you can properly track and package regular FSEOG awards and Emergency FSEOG awards separately.
This is defined under the CARES Act as:
According to the April 3, 2020 Electronic Announcement, “On March 13, 2020, the President of the United States declared that a national emergency concerning the COVID-19 outbreak began on March 1, 2020, as stated in “Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak,” Proclamation 9994 of March 13, 2020, Federal Register Vol. 85, No. 53 at 15337-38. The Department considers this declaration to be equivalent to a federally declared major disaster, as defined in The Robert T. Stafford Disaster Relief and Emergency Assistance Act in 42 U.S.C. § 5122(2) (Stafford Act)....”
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Publication Date: 4/8/2020