Common Findings Corner: The National Emergency Extension

Quick hits on hot topics for higher education institutions

On February 18, 2022, President Biden extended the national emergency concerning the COVID-19 pandemic in his notice to Congress. Updates to the regulations as well as its flexibility have been established at this point and must be observed. The more significant changes are hard to overlook, so in this article, we’ll dive into a few recent announcements you might have missed.

COVID-19 Waivers and Flexibilities – What is still in effect?

There was an influx of information to digest when the pandemic first hit. Many relief acts were passed, regulatory flexibilities and extensions added, and numerous clarifications on guidance released. But, with so many announcements over the past two years, keeping up with the Federal Register notices and changes to certain requirements is no simple task. Here are a few of the topics we find important and current:

• V1 Verification: The Department waived V1 verification requirements for the 2021-2022 FAFSA processing cycle. Schools are still required to perform V4 and V5 verification for students.
• Needs Analysis: Any emergency aid received by a student from a federal or state entity for the purpose of providing financial relief (HEERF, for example) is not counted as income when calculating an Expected Family Contribution (EFC) or estimated financial assistance for packaging purposes.
• Federal Work Study Waivers (FWS): The FWS community service requirements are automatically waived for all FWS-participating schools for any award year in which the national emergency is still in effect. This waiver expires at the end of the award year that begins after the date that the national emergency is rescinded.
• Return of Title IV Funds: The CARES Act implementations for the R2T4 waiver are in effect until the end of the payment period when the national emergency ends. The deadline of September 30, 2022 applies to CARES Act reporting requirements and use of the coronavirus indicator in COD for the 2020-2021 and 2021-2022 award years.

COVID-19 Waivers and Flexibilities – What has expired?

While many schools may be used to applying these flexibilities and waivers, we want to reiterate which common ones are no longer in effect:

• Campus-Based Programs and Non-Federal Match: The flexibility of waiving the non-federal match for the Federal Supplemental Educational Opportunity Grant (FSEOG) and FWS programs expired and is no longer applicable for the 2021-2022 award year and moving forward.
• Leave of Absence (LOA): Schools were allowed to extend leaves beyond 180 days for students who began approved LOAs on or after March 5, 2020 (but only through December 31, 2020). Institutions were required to withdraw students that exceeded 180 days of LOA as of January 1, 2021. As a reminder, the total number of days for any LOA or combination of LOAs cannot exceed 180 days in a 12-month period. The 12-month period begins on the first day of the student’s initial leave of absence.

Treatment of Title IV Credit Balances When a Student Withdraws

The recent release of Volume 5 of the 2021-2022 FSA Handbook (updated on January 11, 2022) provides a clarification to the treatment of Title IV credit balances when a student withdraws. With the student’s written authorization, schools are able to return credit balances to the student’s outstanding loan balance within 14 days from when the school performs the R2T4 calculation. However, that practice is now only acceptable if the student is made aware of the full Title IV credit balance amount, and the student clearly indicates in writing the specific amount of the credit balance they would like returned.

A lot of the time, institutions will find that once a student withdraws, it is difficult to obtain the proper written authorization from them. Schools likely already have procedures in place to address outstanding credit balances when a student is no longer enrolled but should prepare, nonetheless, to mail a check to the student (or parent for a Direct PLUS loan). Be sure this is sent within the appropriate timeframe to remain compliant when the authorization to reduce the student’s loan balance is not received. Now is the time to review any standardized or internal forms for this use so they can be revised as necessary.

Though this section of the FSA Handbook was released this year, it is effective for the 2021-2022 award year – and essentially was in effect as of July 1, 2021.

Whether the pandemic is nearing the end or keeping steady, new regulations and changes to the current ones will occur more often than not. We are lucky to have a number of resources to help keep up with the changes. When in doubt, it is always good to refresh yourself and stay on top of the Department of Education press releases as well as the “What’s New” section in the Federal Student Aid Knowledge Center.

Please contact our team of Title IV experts at any time to discuss the impact of these changes on your institution.