Due to the uncertainty of the pandemic, the Department of Education (DOE) has continually provided updates to its guidance for interruptions of study related to the Coronavirus. Since there have been frequent updates during these difficult times, some can be easily overlooked. One such update that has seemed to have slipped through the cracks with many schools is the addition of the Coronavirus Indicator to the Common Origination and Disbursement (COD) system.
What is the Coronavirus Indicator?
The Coronavirus Indicator is a checkbox that was added to the Disbursement Information page in the COD system that is used to update disbursement records for aid recipients who have withdrawn due to COVID-19-related matters. This box should be checked when a student’s actual disbursement qualifies for Direct Loan cancellation and exclusion from the Direct Loan annual limits, Subsidized Loan usage (SULA) calculations and the Pell Grant Lifetime Eligibility Used (LEU) calculations.
When the Coronavirus Indicator should be used
Per the DOE’s Electronic Announcement on November 6, 2020, a school should select the Coronavirus Indicator when:
- An aid recipient began attendance in a payment period or period of enrollment.
- The aid recipient withdrew during that period due to the COVID-19 pandemic.
- The actual disbursement was made for that period (the Disbursement Release Indicator (DRI) in the COD system is set to “True”).
- The disbursement’s payment period start date is a date from January 1, 2018 to December 31, 2020 (Note: The Payment Period Start Date is a required field for all disbursements that are marked with the Coronavirus Indicator (set to “True”)).
The Coronavirus Indicator should be used for eligible Direct Loan disbursements and grant awards from the 2017–2018 award year and forward. Note: Set the Coronavirus Indicator after confirming there are no further changes to a disbursement. Once the Indicator is set, it cannot be unchecked and, therefore, no additional changes can be submitted on that disbursement.
What happens when the Coronavirus Indicator is checked?
According to the DOE’s September 27, 2020 COD System Reporting update, once a disbursement is flagged with the Coronavirus Indicator, the following actions will be triggered:
- For Pell Grant disbursements, the DOE will adjust the LEU for the percentage represented by the flagged disbursement(s). Once the adjustment is made, it will be viewable on the LEU History page and will be identified by the “Disaster Relief” Adjustment Type. As for Iraq and Afghanistan Service Grant disbursements, the DOE will adjust the LEU through a manual process, as there is no automated restoration of LEU for these grants.
- For Direct Loan disbursements, the DOE will remove the flagged disbursement from the annual loan limit and SULA calculations (this may include systematically changing the financial award period start and end dates). The appropriate federal loan servicer will be notified that the disbursement(s) has been discharged.
- For the Return to Title IV (R2T4) calculator, the school will be required to select a “Calendar Profile” that has a payment period or period of enrollment start date within the valid date range. Once selected, this will be displayed on the R2T4 Review Calculation page and Student Record Management page.
If the Coronavirus Indicator needs to be marked for a disbursement in which the award year has passed the data submission deadline, the school can request to reopen the award year in COD to enter changes. If a disbursement is not flagged, it will be processed in COD under existing business rules. The DOE states that the Coronavirus Indicator is not a required data element and can be blank if not applicable.
Coronavirus Indicator Deadline
As stated in the DOE’s September 27, 2020 COD System Reporting update, the deadline to add the Coronavirus Indicator to disbursement is no later than December 31, 2020. Disbursements not submitted by the deadline may be calculated incorrectly for students who are entering or re-entering repayment at that time. Furthermore, it could result in students not receiving the full amount of Title IV aid for which they are eligible. Note: Schools should coordinate with their third-party servicers to confirm who is responsible for checking the Coronavirus Indicator.
For best practices when using the Coronavirus Indicator and other COD system changes to support the CARES Act, please visit the following link or contact a Sikich Title IV expert: COD System Implementation Information for Additional COD System Changes to Support the CARES Act – Supplemental Phase