The Department of Education (ED) updated its guidance for institutions coping with the impact of the Coronavirus pandemic on May 15, extending the timeframe for relaxed rules on utilizing distance education, and providing more detail on matching funds for the campus based programs, Return of Title IV Funds (R2T4), leaves of absence, Satisfactory Academic Progress (SAP), and treatment of Paycheck Protection Program loans, among other items. Most of the guidance stems from provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted at the end of March.
Switching to Distance Education. Institutions across the country are wrestling with decisions about when to reopen their campuses and how to continue to serve their students amid the global pandemic. Some have announced plans to return to their normal calendar and in-person classes in the fall. A number will start and end the fall semester earlier, or transition to online instruction for the end of the term. The intent is to move students off campus before the start of the usual flu season and a feared second wave of Coronavirus infections. Others have already announced a continued reliance on distance education for the rest of 2020. And many have yet to announce firm plans.
ED is providing institutions with the flexibility to continue to utilize distance education in response to COVID-19 for any payment periods that include March 5, 2020 or that begin on or between March 5 and December 31, 2020. The requirement for special accreditation for distance education if at least 50% of a program is online will also be waived for the same period.
Campus-Based Programs. The CARES Act waives the institutional share requirement for the Federal Work-Study (FWS) and Federal Supplemental Educational Opportunity Grant (FSEOG) programs for the 2019-20 and 2020-21 award years. ED is, however, only allowing institutions to reimburse themselves for the nonfederal match associated with FWS wages paid or FSEOG grants disbursed since March 13.
Leaves of Absence. The CARES Act provided additional flexibility for federally approved leaves of absence (LOAs) for students at term-based programs so that students returning from an LOA do not have to resume their education at the same point that they left. Institutions that do not have a written LOA policy may adopt one now (which may be temporary). Students must be required to request an LOA in writing, stating their reason. For COVID-19 related circumstances, institutions may approve LOAs first and ask students for written requests afterwards.
Return of Title IV Funds. Normally, if a student with Title IV aid withdraws before completing a term, the institution is required to calculate how much aid the student has "earned" and return any unearned funds to ED, following complex regulations known as return of Title IV aid or R2T4. For the term including March 13, the CARES Act waives the requirement to return funds to ED for students who withdraw due to COVID-19, but still requires schools to make the R2T4 calculations and report results. As usual, the R2T4 calculations are not affected by the institution's refund policy.
ED's new guidance clarifies that if institutions had already returned funds to ED under existing rules for students who were impacted by the pandemic, they should re-disburse Title IV funds to the students, make adjustments in COD, credit the students' ledger accounts, and request any necessary funds from G5. Further, since repayment of student grant overpayments is also waived by the CARES Act, if an institution has already returned funds on behalf of a student, it should re-request those funds as well.
For COVID-19 related withdrawals where no returns have been made, the institution should perform the usual R2T4 calculation, but make no adjustments to COD or to the amount of Title IV aid credited to the student's ledger account. Any post-withdrawal disbursements to which a student is entitled should be made.
Reporting Requirements. While the guidance lists four reporting requirements, ED is still developing the process. Under the CARES Act, the information on withdrawals will also be used by ED to cancel any Direct Loan disbursements for the payment period, exclude the payment period from subsidized loan and Pell grant lifetime eligibility calculations, and cancel any TEACH grant disbursements.
Qualifying for R2T4 Relief. Any student enrolled in in-person instruction at an institution that transitioned to distance education, closed campus facilities, or experienced other interruptions during the covered period may be considered to have withdrawn due to the pandemic. If the institution did not suffer changes in instruction or campus operations, however, a student must provide the school with a written statement explaining why the withdrawal was due to COVID-19 to benefit from the waiver of R2T4 returns. Students who were participating in distance education also need a written attestation. The guidance lists examples of acceptable reasons such as loss of childcare, economic hardship, or increased work demands in addition to illness.
Satisfactory Academic Progress (SAP). Under the CARES Act, credits that a student fails to complete due to circumstances related to COVID-19 may be excluded from the quantitative component of the SAP calculation. The student does not need to submit a SAP appeal, but the institution needs to determine that the failure to complete was connected to the pandemic. If the institution temporarily ceases operations, it may exclude attempted credits for all affected students.
ED also added to its FAQs on Title IV and COVID-19 when it issued this guidance, including one discussing pass/fail grading and SAP, noting that institutions may temporarily modify their policies limiting how many classes a student may take on a pass/fail basis due to the Coronavirus national emergency.
Paycheck Protection Program. Some colleges and universities have obtained loans through the Paycheck Protection Program (PPP) from the Small Business Administration which may be forgiven if the school meets employment standards laid out in the CARES Act. ED clarifies that it will treat the portion of the loan that has been, or is expected to be, forgiven as a net asset rather than a liability when calculating the institution's composite score for purposes of determining whether it meets the financial responsibility standard. The amount must be identified on the audited financial statements and attested to by the auditor.
ED also notes that colleges and universities should not, under relevant regulations issued by the Department of Treasury, count FWS students or the associated payroll costs when determining their eligibility for PPP loans.
Audits. ED has extended the deadline for financial statement and compliance audits by six months. Most public and independent nonprofit colleges and universities follow the Single Audit Act rules promulgated by the Office of Management and Budget. OMB issued a similar extension on March 19.
Documentation of Student Eligibility. ED recognizes that schools may face difficulties currently obtaining official documentation from students or other entities that is usually routine and has offered alternatives. An institution may use a transcript on file in another office or accept a signed and dated statement from an applicant attesting to secondary school completion or equivalent in place of official documentation or transcripts from high schools. This alternative is available through December 31, 2020. ED is also waiving the requirement for MCAT scores for foreign medical school admissions since the exams are not being offered at this time due to the COVID-19 emergency. A new question in ED's FAQs also discusses alternatives to Status Information Letters from the Selective Service System.