By Carrie Warick, Director of Policy and Advocacy, and Raymond AlQaisi, Policy and Advocacy Manager
As our nation faces an unprecedented public health crisis, students from low-income backgrounds, students of color, and students who are first in their family go to college are facing unique challenges above and beyond those facing every American. NCAN is advocating for protections that will specifically support our student populations. In addition, NCAN is committed to sharing the updates on actions from Congress, the White House, and the Department of Education that specifically affect our students. We will update this blog regularly as our government works to respond.
Be sure to also check out NCAN’s roundup of COVID-19 resources, which includes lists of helpful articles, webinars, member-submitted examples of communications to students, and more.
The Department of Education (ED) released additional COVID-19 guidance on regulatory flexibility, on federal student aid issues such as return of Title IV (R2T4) funds and satisfactory academic progress (SAP). This guidance does not provide institutions with more information as to the student emergency aid grants from the CARES Act funding, if a student does not have a FAFSA on file — thus clearly meeting the requirement of being Title IV-eligible.
Verification of High School (or Equivalent) Completion Status
ED is allowing institutions to verify a student’s high school completion status (for V4 or V5 verification groups) through a signed statement to attest to secondary school completion, given current challenges in obtaining official completion documentation. This flexibility is granted through Dec. 31, 2020, and is now applicable to the 2019-20 and 2020-21 award years.
Return of Title IV Funds
On R2T4 provisions in the CARES Act, ED clarified effective dates and COVID-19 related student withdrawals. Towards waiving the R2T4 requirement to return unearned Title IV grants and loans, this applies to students who began attendance in a payment period/period of enrollment that includes March 13, 2020 and who subsequently withdrew; including those for an institution already ran a R2T4 calculation and returned funds, in which case institutions are instructed to re-disburse funds to those students. This guidance also explains that institutions can consider all withdrawals of ground-based students during the stated period to be COVID-19 related; whereas, students enrolled in distance education (or in cases where institutions did not change operations) would have to provide a written explanation of how a withdrawal was COVID-19 related.
Satisfactory Academic Progress
As for SAP, institutions are allowed to exclude attempted credits that were not completed by a student. ED states that a student doesn’t need to appeal, as long as an institution “reasonably determines” that the failure to complete the credits was a result of COVID-19. The guidance details a list of allowable circumstances and states that if an institution temporarily ceases operations for COVID-19 related reasons, attempted credits for all impacted students may be excluded.
Today, the IRS announced that the emergency aid grants to students, as provided for in the CARES Act, will not be taxable; as these grants will be considered official federal disaster assistance. As a result, institutions will not need to provide students who receive emergency grants with related tax documents.
The Department announced today that nearly $1.4 billion in additional funding will be directed to Minority Serving Institutions (MSIs), Historically Black Colleges and Universities (HBCUs) and Tribally Controlled Colleges and Universities (TCCUs), as well as institutions serving low-income students during the COVID-19 crisis. This funding is part of the Higher Education Emergency Relief (HEER) Fund authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Institutions may use the funding to cover the cost of technology associated with a transition to distance education, emergency grants for eligible students, and faculty and staff trainings. More information is available on the Office of Postsecondary Education’s CARES Act website.
Today, the president signed into law the Paycheck Protection Program and Health Care Enhancement Act (Public Law No: 116-139). Overall, the law provides nearly $500 billion in funding for small-businesses, hospitals and for COVID-19 testing. As established by the CARES Act, the Paycheck Protection Program will see an additional $310 billion in funding for loans to small businesses and nonprofits (which can be forgiven if businesses maintain payroll). There were no education-related provisions in this response package.
Today, the U.S. Department of Education (ED) released new information regarding the Higher Education Emergency Relief Fund, as provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L.116-136). First, ED released a list of answers to frequently asked questions (FAQ) regarding the emergency aid grants that institutions can provide to students. Notably, in this document, ED advises institutions to provide these funds only to students who qualify for federal financial aid, i.e. U.S. citizens and some legal permanent residents. Additionally, ED released the Certification of Agreement form and guidance for the institutional portion of the Higher Education Emergency Relief Fund.
Emergency Student Grant Aid
In the student aid FAQ, ED stresses that institutions must provide the emergency aid grants directly to students and that these funds are available for the specific purpose of students' expenses who experienced disruption of campus operations.
The Department clarified that students must be Higher Education Act (HEA) Title IV eligible to receive emergency grant aid. Students must have filed a Free Application for Federal Student Aid (FAFSA) in the past, or demonstrate their eligibility to file a FAFSA, to receive emergency financial aid grants; such criteria include (but are not limited to the following): U.S. citizenship or eligible noncitizen; a valid Social Security number; registration with selective service (if the student is male); and a high school diploma, GED, or completion of high school in an approved home-school setting. Lastly, students enrolled in an exclusively online program (as of March 13, 2020) are not eligible to receive emergency grant aid.
ED clarified that institutions cannot automatically apply emergency aid funds to a student’s overdue bill or outstanding balance; institutions must provide emergency grant aid directly to students; and this should be through the process used to pay credit balances to students. This provision can be by checks, electronic transfer payments, debit cards, and payment apps, as long as the process adheres to ED’s requirements for paying credit balances to students. Again, institutions cannot deduct, from the emergency financial aid grant, a student's debts, fees, or any amounts owed to the institution.
Institutional Portion of Higher Education Relief Fund
ED released full details of, and application for, the funds that institutions can use for their internal costs. In a letter from the Department, ED provides an overview of the release of funds and encourages institutions to direct funds to bolster remote learning and student supports. Institutions must first complete the agreement process for the emergency student aid grants before applying for this portion of the relief fund.
Overall, in guidance, ED indicates that institutions should use this funding to cover costs related to "significant changes to the delivery of instruction due to the coronavirus." Institutions can use funds to: make additional emergency student aid grants; provide refunds for room and board, tuition, and fees; reimburse themselves for refunds made to students on or after March 13, 2020; purchase laptops and other technology for students; and lastly, reimburse themselves for technology purchased for students on or after March, 13, 2020.
Today, the U.S. Department of Education (ED) announced $3 billion in Governor's Emergency Education Relief as part of the Education Stabilization Fund in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In a letter from Secretary Betsy DeVos, she told governors that this is an "extraordinarily flexible emergency block grant" to states and that the U.S. Department of Education "will not micromanage" how states use these funds. The Secretary also encouraged governors "to focus these resources on ensuring that all students continue to learn." California will receive the largest sum at $355 million, followed by Texas at $307 million. Vermont receives the smallest portion at $4.5 million in the formula set by both population and poverty rate. The complete state list is available here.
Institutions will receive the funding and be able to immediately begin awarding funds to students, upon completion of a certification and agreement form to ensure the compliance of institutions to federal law. Institutions who quickly complete the form should have access to funds mid-next week, according to information provided in an ED stakeholder call. The Department provides more details on its Higher Education Relief Fund webpage, and in a document detailing the allocations to institutions. The breakdown of the Higher Education Relief Fund allocations by state (linked here) and by institutional sector (see table below) are also available, courtesy of data provided to NCAN by Ben Miller, vice president for Postsecondary Education at the Center for American Progress.
Emergency Aid Distribution By Institutions
Institutions, in compliance with the agreement to receive the funding, are advised to promptly make available emergency financial aid grants directly to students for their expenses related to the disruption of campus operations due to coronavirus (COVID-19) outbreak. Such expenses include food, housing, course materials, technology, health care, and child-care costs.
Institutions assume significant discretion in awarding the emergency aid to students and can set up their own process for deciding which students receive aid and how much a student is awarded. Students’ eligibility for aid will based on the criteria set by their individual institution. Institutions can award these funds to any enrolled student and Title IV eligibility is not an explicit requirement. Despite this, ED has not clarified if students who are undocumented, among other students, will have access through their institution for this emergency aid. The Department is encouraging institutions to distribute aid to students in a way that "first prioritizes the most disadvantaged students with the greatest needs and second supports continued learning.”
In a letter to college and university presidents, the Department recommends that the maximum amount for a student’s emergency financial aid grant not exceed the maximum Federal Pell Grant for the applicable award year, currently $6,195. Institutions are strongly encouraged to make any adjustments on a case-by-case basis to exclude individual emergency financial aid grants from the calculation of a student’s expected family contribution (EFC) for either academic year 2019-20 or 2020-21. These emergency funds do not constitute federal financial aid for determination of EFC.
Moreover, institutions are encouraged to offer their allocations to other schools in their state or region, if their students do not have a large need. The funding must distributed by institutions within one year of its agreement, which means funds received could be used for AY 20-21 financial aid packages. Lastly, institutions may not use the funding to reimburse itself for any costs or expenses, such as those associated with the delivery of instruction or refunds previously issued to students.
In efforts to address the urgent circumstances facing students and their institutions, the Department released updated guidance on interruptions of study as a result of the coronavirus (COVID-19) outbreak. The guidance covers many areas of federal student aid, such as need analysis and verification. Additionally, on April 3, NCAN requested flexibility with regards to the completion of the verification process in a letter to the Department.
While some of NCAN's concerns have been addressed, there are still several outstanding questions to be answered. The Department acknowledges in its latest guidance that it is still reviewing the recently passed CARES Act, which became public law on March 27, and intends to provide additional guidance on the areas that require implementation soon. NCAN will continue to update members, as more information becomes available.
Leave of Absence
For the purposes of Title IV fund eligibility, the Department will allow students to take an approved leave of absence, even if the student notifies the institution of this request after the date that the leave began. Additionally, the institution may retain a student’s Title IV funds for when the student resumes enrollment.
Return of Title IV Funds (R2T4) - Institutional Charges, Refunds, and R2T4 Calculations
Due to the recent passing of the CARES Act, the Department is still reviewing the significant changes to R2T4 requirements and says that it will provide more guidance soon.
Emergency financial relief assistance received by individuals, whether grants or low-interest loans, from federal or state entities will not count as income for the purposes of the Free Application for Federal Student Aid (i.e. Federal Methodology and Expected Family Contribution).
The Department advises that, where necessary, financial aid administrators use professional judgment authority to more accurately reflect the financial need of currently affected students and families, such as adjustments to the cost of attendance or in EFC calculations. Institutions must still make and document professional judgment determinations on a case-by-case basis, and follow the Federal Student Aid Handbook.
Satisfactory Academic Progress
Institutions may exclude any attempted credits that were not completed by a student from the calculation of SAP, as a result of a qualifying emergency, without requiring a student appeal. The Department says it will provide more implementation guidance on this matter soon.
The Department is easing some requirements of students and institutions regarding the completion of verification. Students, those flagged for verification groups V4 or V5, will not be held to the requirements of notarized documents and in-person submission to the financial aid office; instead, for example, required documents may be submitted electronically. Also, institutions can accept copies of forms of identification that expired after March 1, 2020. Lastly, the requirements that a dependent student submit a signed statement by a parent can be waived, if neither parent is available to provide one; institutions will retain these explanations.
Student loans held by the federal government will have a zero percent interest rate and automatic cessation of payments until September 30, 2020. Students with Federal Direct Loans will remain with an “in school” status until the institution reports otherwise.
For federal student loans not held by the federal government, such as some loans under the phased-out Federal Family Education Loan (FFEL) Program and institutionally held Perkins loans, may voluntarily choose to provide these same benefits to borrowers. Borrowers should contact their servicer or loan-holding entity for more information. Borrowers can find answers to frequently asked questions on this Federal Student Aid webpage.
Lastly, the Department will cease collection activities, such as wage garnishment, on all defaulted federal student loans until September 30, 2020.
Federal Work Study (FWS)
For students who begun FWS employment prior to March 13, institutions may continue to pay a student who: received an FWS award for the award period during which a COVID-19 related interruption occurred on the campus; earned FWS wages from the institution for that award period; and was prevented from fulfilling the FWS obligation for all or part of the award period due to a COVID-19 related interruption.
Additionally, NCAN hosted a Member Forum on April 2 to provide members with most recent information about how the CARES Act will impact our students, families, and NCAN member organizations. The recording and slide deck for the Member Forum can be accessed through NCAN's Webinar Archives.
Congress: Senate 'Phase 3' Deal for COVID-19 Includes Aid to Higher Education
At 1 a.m. on March 25, Congress reached a deal on the Coronavirus Aid, Relief, and Economic Security (CARES) Act (S. 3548), the behemoth legislative package that will provide for emergency support and economic stimulus due to the COVID-19 crisis. The CARES Act is Phase 3 of Congress’ coronavirus response. Senate Majority Leader Mitch McConnell (R-KY) called this a “wartime level of investment into our nation.” The bill has not yet been voted on or signed into law, but it is expected to move through Congress quickly this week with President Trump already agreeing to sign the bill.
This bill provides higher education institutions with additional funds to provide emergency aid resources to students. It allows institutions to pay Federal Work-Study (FWS) recipients even if they aren’t able to work. The legislation also puts a pause on student loan interest and payments through Sept. 30, and removes this semester from Pell Grant Lifetime Eligibility Used (LEU) and Satisfactory Academic Progress (SAP) calculations for students unable to complete. Additionally, it provides flexibility for AmeriCorps service requirements.
NCAN advocated in particular for the LEU, SAP, and emergency aid elements of the bill. A bulleted summary of top-line items is below. Stay tuned for a separate blog post that will dig deeper into the student supports contained in the CARES Act.
Emergency Aid and Financial Support for Students
Emergency Aid from Education Stabilization Fund: Institutions must use 50% of their state stabilization fund dollars for emergency aid for students.
Emergency Aid from SEOG: Institutions of Higher Education (IHEs) may use Supplementary Education Opportunity Grant (SEOG) funds to provide emergency aid to students. Further, IHEs are able to transfer unused Federal Work-Study (FWS) funds into their SEOG for use as emergency aid. Students seeking emergency aid should contact their financial aid offices.
Federal Work-Study: IHEs are able to continue paying FWS recipients their wages through the end of the academic year if they are unable to continue their work.
Relief of Return to Title IV (R2T4): If a student withdraws due to the COVID-19 emergency, they are not required to return federal student aid to the institution, and the institution is not required to return funding to the federal government. Students who need to withdraw should talk with their financial aid office to confirm any paperwork the institution needs is filed.
Student Loan Borrowers
Student loan payments: Student loan payments are suspended through Sept. 30, 2020, and those months will still count toward loan forgiveness (both income-driven repayment programs and Public Service Loan Forgiveness (PSLF)).
Cancelled loan obligation: The Department of Education is required to cancel a borrower’s loan obligation if a borrower withdraws from an IHE as a result of a qualifying emergency. This applies to the portion of the loan attributable to the payment period.
Lifetime Eligibility Used (LEU) and Satisfactory Academic Progress (SAP)
LEU: Students unable to complete the semester due to the COVID-19 emergency will not have that semester count in their total for Pell or federal student loans.
SAP relief: IHEs may exclude any attempted credits not completed by a student from the student’s satisfactory academic progress calculation due to a qualifying emergency.
Leave of Absence: IHEs may provide a student with an approved leave of absence due to a qualifying emergency under certain conditions.
Education Stabilization Fund
How Much: $30 billion fund to provide aid to both PK-12 and higher education.
IHEs are required to use at least 50% of the funds for emergency grants to students related to COVID-19 issues.
Corporation for National and Community Service (CNCS) (oversees AmeriCorps)
AmeriCorps Volunteers: If service is interrupted due to COVID-19, CNCS can deem them to have met their requirements and still award their full education award.
Time and Age Extension: CNCS is also allowed to expand the time frame and age limit for participation after the COVID-19 emergency has ended.
Department of Education
Additional Funding: $40 million for Federal Student Aid, $8 million for program administration, and $7 million for the ED Inspector General.
Modifications for ED: ED is permitted to modify required and allowable uses of funds under certain HEA programs as a result of the COVID-19 emergency.
Late on March 24, the White House announced that it would stop seizing the wages, tax refunds, and Social Security benefits from federal student loan borrowers whose loans are in default. A defaulted loan is one that has been delinquent for more than 270 days.
Private collection agencies were told to cease collection retroactively from March 13 and to continue the halt "until further notice." In addition, the Department of Education will not refer newly defaulted accounts to the Department of Treasury, which manages the seizure of tax refunds and Social Security benefits.
The U.S. Department of Education (ED) released a statement today, affirming President Trump's earlier announcement on March 13 that interest accruing on all federal student loans will be automatically waived by setting the current rates to 0%. The release details that this period of waiving interest accrual will extend for at least 60 days (from March 13).
Additionally, federal student loan borrowers have the option to suspend payments during this period, as servicers are able to grant an administrative forbearance to those who request one; however, borrowers seeking forgiveness through federal programs may still want to continue making qualifying payments. Lastly, payments have been automatically suspended for borrowers who are, or become, delinquent by more than 31 days.
To date, the White House has used executive authority to waive interest rates on student loans, Congress has passed two laws (referred to in the media as “phases”) in response to the Coronavirus (COVID-19), and the Department of Education (ED) has announced guidance on interruptions of study related to the coronavirus and federal financial aid.
On March 13, the White House announced that the Secretary of Education will be waiving interest accruing on all federally held student loans. More information is needed to explain how this would work conclusively, but major news outlets have reported that ED is considering instructing federal loan servicers to lower interest rates to 0%. This would likely not change the amounts of borrowers’ monthly payments but could potentially allow for a greater share of payments to apply to principal loan balances. This policy change is said to be effective immediately.
Federal student loan borrowers may also request that their servicer put their loan(s) into forbearance, which would mean borrowers would temporarily not be obligated to make payments. In normal circumstances, interest would still accrue in forbearance and borrowers would pay back more over the life of the loan. However, if the loan is not accruing interest, borrowers using this option would simply delay the end of their student loan repayment and not increase the total amount to be repaid.
Congress' Three-Phase Plan
Congressional leadership is working to quickly pass a three-phase plan to address immediate needs related to the coronavirus. President Trump has already signed the first two phases into law. Phase 3, which will likely direct payments to all Americans as well as cover several other areas, such as financial aid flexibility, is expected soon.
Phase 1: The Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (H.R. 6074) was signed into law on Friday, March 6. The bill provides $8.3 billion in emergency funding for federal agencies to respond to the coronavirus (COVID-19) outbreak; it prioritizes issues such as vaccine development, medical supply production, and grants for state, local, and tribal public health agencies and organizations. The bill did not contain any provisions pertaining to education.
Phase 2: The second phase, the Families First Coronavirus Response Act (H.R. 6201), was enacted on Wednesday, March 18. The second law in response to the coronavirus outbreak provides for paid sick leave, free coronavirus testing, an expansion of food assistance and unemployment benefits, and requires employers of health care workers to ensure additional protections.
The provisions that may be most relevant to NCAN members are as follows:
Eligible workers who are caring for a child whose school has closed can expect to receive sick pay through their employer.
Emergency Supplemental Nutrition Assistant Program (SNAP) benefits will be available for families with at least one child who would be receiving free and reduced-price meals and whose school has been closed for at least five consecutive days.
School meal availability will be expanded, with waivers and flexibility for meal distribution outside of schools.
Department of Education
On March 5, the U.S. Department of Education issued guidance on interruptions of study as a result of the coronavirus. The guidance informed institutions and their financial aid administrators on the authority of professional judgment (still requiring that decisions be made and documented on a case-by-case basis) as it relates to adjusting cost of attendance for students who are impacted by the coronavirus outbreak. Additionally, the guidance addresses the circumstances in which institutions can continue to provide Federal Work-Study payments to affected students who are no longer able to work.
Additional updates are expected from ED soon.
April 17, 2020: This post has been updated to reflect that ED has not clarified if students who are undocumented, among other students, will have access to the emergency aid to be distributed by institutions, as provided for in the CARES Act.
March 25, 2020: This post has been updated to reflect correct amount of funding for the ED Inspector General.