Last week, the Department of Education (ED) released an updated guidance for interruptions of study related to Coronavirus. The announcement provided long-awaited guidance on implementing the CARES Act Return of Title IV (R2T4) provisions, including reporting requirements, refund requirements, and qualifications for the R2T4 relief.
The CARES Act waived the requirement for institutions to return Title IV funds as the result of student withdrawals related to a qualifying emergency. For any student who begins attendance in a payment period or period of enrollment that begins on or includes March 13, 2020, and subsequently withdraws from the period as a result of COVID-19-related circumstances, the institution is not required to return Title IV funds. While institutions are not required to return funds, institutions are required to perform the R2T4 calculation for each student covered by the CARES Act R2T4 waiver.
- For students who withdrew prior to the guidance and the institution has already performed an R2T4 calculation and returned funds, institutions should re-disburse Title IV funds to those students and make the required adjustments accordingly.
- In cases where the R2T4 process has not be completed, institutions should perform the R2T4 calculation, however, the institution should not make adjustments to COD or the student’s account.
- If a student withdraws prior to some or all Title IV aid having been disbursed, the institution should proceed with making any remaining disbursements for the payment period and perform the R2T4 calculations. The institution should not make adjustments to COD or the student’s account.
The R2T4 waiver applies to any institution that moved students from ground-based instruction to distance learning, closed campus housing or other campus facilities, or experienced other interruptions in instruction. These institutions may consider all withdrawals from students enrolled in ground-based instruction during the covered period to have been the result of circumstances related to the COVID-19 national emergency. For institutions that did not undergo changes in educational delivery or campus operations as a result of the COVID-19 emergency, the institution will be required to obtain written verification from the student explaining why the withdrawal was the result of the COVID-19 emergency. According to the announcement, allowable circumstances include, but are not limited to, illness of the student or family member, need to become a caregiver or first responder, loss of childcare, economic hardship, inability to access wi-fi due to closed facilities, or an increase in work hours as a result of the COVID-19 emergency.
The CARES Act also waives student grant overpayments that result from the R2T4 process for students who withdraw as a result of COVID-19-related circumstances. If a student’s grant overpayment has been waived in accordance with the qualifications above, an institution is not required to notify the student or the National Student Loan Data System (NSLDS) of the overpayment or refer any portion of the overpayment to ED. Under this provision, the institution must document in the student’s file when it applies this waiver as a result of the CARES Act.
The updates to the R2T4 process do not affect institutional refund policies, however, if a student who qualifies for CARES Act R2T4 relief withdraws and has aid left over after charges, the refund of Title IV funds must be provided to the student within 14 days.
Reporting Requirements
The CARES Act requires an institution to report information specific to each student for whom the R2T4 process was waived. The reporting requirements under the CARES Act include:
- Identifying information for each student for whom R2T4 was waived under the CARES Act;
- The payment period “begin” and “end” dates for the period that the student did not complete as a result of the COVID-19 emergency;
- The amount of Title IV grant or loan assistance (other than Federal Work Study funds) that each such student received for the payment period in which he or she withdrew; and
- The total amount of Title IV grant or loan assistance that each institution has not returned to the Secretary as a result of the CARES Act provisions.
Upon receipt of the information above, ED will cancel the entire amount of any disbursement of a Direct Loan borrowed by the student or his or her parent for the payment period or period of enrollment. Additionally, ED will exclude a student’s Subsidized Loan usage and Pell Grant lifetime eligibility used for any payment period that the student does not complete due to a qualifying emergency.
Currently, the process to fulfill the reporting requirements above has not been finalized. ED is developing the process and will provide additional guidance about these requirements in the future.
Sources:
IFAP Announcement: UPDATED Guidance for interruptions of study related to Coronavirus (COVID-19)