article updated on may 20, 2020
The entire world is affected by the Coronavirus (COVID-19) pandemic, and many industries are being impacted in different ways. Look no further than postsecondary education — an industry truly feeling the brunt of this unprecedented time. With many states issuing “shelter-in-place” or “stay-at-home” orders, students are being told to stay off campus and engage in distance learning when possible, and schools are forced to close to help slow the spread of COVID-19. Fortunately, the U.S. government and Department of Education are working together to pass bills and enact legislation to help higher education institutions weather this storm.
Return of Title IV and the CAREs act
On May 15, 2020 the Office of Postsecondary Education released guidance regarding the Return of Title IV Funds (R2T4). The purpose of this implementation is to support students and institutions through financial challenges resulting from a decreased availability of loan and grant aid. Students are relieved of any obligation to return unrefunded Pell or grant amounts, as a result of the Return to Title IV (R2T4) being waived under the CARES Act.
In addition, the Secretary waives the statutory 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, an institution is not required to return Title IV funds. In the case of withdrawn students for whom no returns have been made, the institution should:
- Perform an R2T4 calculation in order to determine the amount of Title IV funds that would otherwise have to be returned;
- Make no adjustments to COD as a result of the withdrawal;
- Make no adjustments (as the result of the withdrawal) to the amount of Title IV aid credited to the student’s ledger account.
Treatment of Title IV Funds When a Student Withdraws
If an affected student withdraws prior to some or all their Title IV aid having been disbursed (a situation that would normally result in a post-withdrawal disbursement), the institution should proceed with making any remaining disbursements for the payment period, and then follow steps one through three above. To determine whether a student has withdrawn from a payment period or period of enrollment, please refer to 34 CFR 668.22.
Institutions are required track and maintain the following information for each student who withdrawals, in which an R2T4 calculation has been performed, and Title IV funds were not returned:
- 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
- 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
Any institution that moved students from ground-based instruction to distance learning, closed campus facilities or experienced other interruptions 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 all other institutions, they will be required to obtain a written attestation (including by e-mail or text message) from the student explaining why the withdrawal was the result of COVID-19 emergency.
The process for reporting the above requirements hasn’t yet to be published. However, the Institutions are still responsible for maintaining this information.
In addition, institutions that already returned Title IV funds for students who withdrew due to COVID-19 circumstances, can redisburse any Title IV funds that have already by returned. The Institution should make the adjustment in COD (Common Origination and Disbursements), request through G5 and credit the students’ account ledger.
We are monitoring all electronic announcements and will report any updates or changes as they are released.
Please contact a Sikich professional to learn more about these implications. You can also visit our COVID-19 Resource Center for the latest business updates as they relate to the coronavirus pandemic.