ED’s Internal Watchdog Releases Plan to Oversee Billions in COVID-19 Relief Funding

By Owen Daugherty, NASFAA Staff Reporter

The Department of Education’s (ED) internal watchdog publicly released a plan Tuesday detailing how it will provide oversight as ED allocates more than $30 billion it was tasked with disbursing under the federal COVID-19 relief package.

ED’s Office of Inspector General (OIG) outlined in its Coronavirus Relief Oversight Plan the steps it will take to ensure both that Coronavirus Aid, Relief and Economic Security (CARES) Act funds are properly allocated by ED and that states and colleges appropriately spend their portion of the funding. The plan marks the first steps in inspection and scrutiny of how ED implements the CARES Act. The legislation set aside $7 million for OIG to conduct oversight of ED as it implements the law. 

The CARES Act earmarked roughly $14 billion for higher education through the Higher Education Emergency Relief Fund (HEERF), with half going directly to students in the form of emergency aid grants and the other half going to institutions to offset costs associated with the disruption caused by the pandemic.

OIG said it would pay particular attention to how institutions are using the student portion of the HEERF allocation, as well as how ED monitors that program.

ED’s initial guidance regarding the distribution of the student portion of HEERF led to confusion from schools as they were left wondering which students are eligible to receive the emergency grant aid. Follow-up guidance from ED was met with pushback from dozens of Democratic lawmakers who accused it of undermining “clear congressional intent” in the legislation by excluding students who aren’t Title IV-eligible, namely international students and those in the Deferred Action for Childhood Arrivals (DACA) program, among others.

Under the plan, OIG will also audit and review how Federal Student Aid (FSA) implemented a provision included in the CARES Act requiring ED to suspend the practice of garnishing wages and tax refunds of borrowers in default on their federal student loans.

ED has already faced accusations that it isn’t doing enough to halt the practice, and a class action lawsuit submitted last week alleged some borrowers are still having their wages garnished despite the provision in the stimulus law.

OIG also plans to review how ED used $40 million in the CARES Act that was allocated for student loan servicing activities and how ED is continuing to regulate colleges amid the pandemic.

Furthermore, OIG’s office will review how new flexibilities for some federal financial aid programs are being implemented and overseen by ED, including changes to Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligations and teacher loan forgiveness waivers.

For schools themselves, OIG will review how institutions implemented waivers for the Federal Work Study (FWS) and Federal Supplemental Educational Opportunity Grant (FSEOG) programs.

Under the CARES Act, the school’s requirements under the FWS and FSEOG programs are waived for the 2019-20 and 2020-21 award years in cases where the nonfederal share is paid by the institution, meaning schools are not required to provide an institutional share for any FWS or FSEOG awards made for either year.

Lastly, OIG said it’s already working with its own investigation services and other law enforcement agencies to “pursue entities who are taking advantage of the COVID-19 pandemic, including those “preying on unsuspecting students and student loan account holders by targeting them with fraudulent CARES Act or loan consolidation schemes.”

OIG said it was coordinating its work with the Government Accountability Office and noted that its plan reflects only “potential subject areas” for review and could change as needed.


Publication Date: 5/6/2020

Peter G | 5/6/2020 5:38:26 PM

I share Mike's concern about digging into methodology, though I do think the framing of the OIG document is somewhat comforting.

I may be reading too much into the language but it seems to suggest their focus as pertains to CARES seems to be that schools met the 50% min student spending requirement.

G. Michael J | 5/6/2020 1:39:58 PM

While the stated focus for schools is to make sure we provide at least 50% of the CARES Act funds to students, it will be interesting to see if the audits become opportunities for questioning the models a lot of us are using to determine which of our students have incurred qualifying expenses, and in what amounts.

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