By MorraLee Keller, Senior Director of Strategic Programming
Reading time: 4 min.
In March 2020, the Trump administration declared a national emergency in response to the COVID-19 pandemic. As a result, the U.S. Department of Education implemented several flexibilities related to student financial aid processes. Recently, President
Biden extended the national emergency declaration beyond March 1, 2022,
allowing all of these flexibilities to remain in place until the administration declares the end of the emergency.
While we will not relist every flexibility provided here, we will bring some critical policies to your attention and provide helpful links to use as you assist students and families.
Loss of Income Appeals/Professional Judgement Process
Colleges and universities will have information posted in the financial aid section of their websites describing the process for students to appeal their aid packages. Students who may need assistance in preparing an appeal letter can use SwiftStudent,
a free tool that offers templates letters for financial aid appeals. NCAN was a partner in the development of SwiftStudent.
Unemployment Benefits During 2020
There are two scenarios to take into account when working with families in which someone received unemployment benefits.
First, the American Rescue Plan signed into law in March 2021 created an allowance for the first $10,200 of unemployment benefits for single filers or $20,400 for joint filers to be excluded from taxable income (for those with incomes less than $150,000).
If you assisted any families who may have filed early in 2021 and did not take this exclusion from income, they need to notify the financial aid office that a portion of their adjusted gross income (AGI) should not have been reported as taxable income.
They will need copies of their unemployment documentation for the institution to adjust their AGI and then, hopefully, reduce their expected family contribution (EFC).
Second, unemployment benefits of various amounts became available in 2020 to many who may not normally qualify for those benefits. Situations are occurring where a parent’s and/or student’s taxable income for 2020 was higher than their current income.
If you are assisting families who experienced a reduction in taxable income from what they were receiving in 2020 (earned wages and/or unemployment benefits), you should encourage them to file a loss of income appeal with their selected college(s).
This may result in a lower EFC and increased aid eligibility.
The Department of Education issued a reminder regarding updated guidance allowing financial aid administrators in using professional judgment to set the income level to zero for those receiving unemployment benefits during 2020. Again, this could reduce the EFC and perhaps increase aid eligibility.
Higher education institutions gave multiple rounds of emergency grants to enrolled students during the pandemic. An electronic announcement made early in the pandemic clarifies that these emergency grants are not to be reported on the FAFSA or considered as any type of financial assistance for eligibility purposes.
Please make sure your students did not report emergency grants on the FAFSA. If they did report these funds, students should contact an institution’s financial aid office to learn how to update their FAFSA to remove them.
Verification Process
The Department of Education granted several flexibilities early in the pandemic to reduce the burden on students attempting to complete the FAFSA verification process. Listed below are a few of the flexibilities and the electronic announcement supporting
them.
For Verification Groups 4 & 5: Waiving in-person submission and notarized forms;
submitting expired documents (driver’s license); waiving signatures where no responsible parent can be found.
High School Completion: Allowed to accept a signed and dated
statement from the applicant attesting to completion of high school.
Verification of Non-Filers & Duplicate W-2s:
Reminder to institutions that they can accept signed statements for non-filers selected for verification; institutions can accept a signed statement when the applicant cannot secure W-2 a in timely fashion.
Since January 2019, institutions have been permitted to accept signed copies of student/parent tax returns in lieu of a tax transcript. Colleges will vary on their preferences – institutional websites should contain verification instructions with this
specific information.
If a student is having trouble securing the appropriate tax transcript(s), always ask the financial office for the option to submit signed forms.
Thanks for all you do to provide students with guidance about financial aid appeals, verification, and other processes along the way to securing their financial aid. Regular outreach to college and university aid offices may be needed for the next several
months as we support students to and through fall 2022 enrollment.
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