FULL TEXT OF ED OPE COVID-19 GUIDANCE FOR INTERRUPTIONS OF STUDY – 3/5 & 3/20

Please note this electronic announcement was originally published on March 5, 2020 and was later updated on March 20, 2020.

On April 3, 2020 ED’s OPE provided additional information which can be found here.

We are posting this in its entirety for educational purposes only. The original document may be obtained on the Information for Financial Aid Professionals Website at the following links:

GUIDANCE FOR INTERRUPTIONS OF STUDY (UPDATED 3/20/2020)
COVID-19 FAQs

This electronic announcement addresses concerns expressed by higher education leaders regarding how they should comply with Title IV, Higher Education Act (HEA) policies for students whose activities are impacted by Coronavirus (COVID-19), either directly because the student is ill or quarantined, or indirectly because the student was recalled from travel-abroad experiences, can no longer participate in internships or clinical rotations, or attends a campus that temporarily suspended operations. This information provides flexibilities for schools that are working to help students complete the term in which they are currently enrolled.

These instructions do not contemplate accommodations for students who have not yet enrolled or whose term has not yet begun, with certain exceptions. We will continue to monitor the situation and make a later determination of what accommodations may be necessary should longer-term interruptions become likely. We will continue to provide updates to this information as appropriate.

We encourage institutions to visit the Department’s Coronavirus webpage, https://www.ed.gov/coronavirus?src=feature, on this topic frequently, as we will post updates as they become available. In addition, the Department’s webpage has links to guidance from the Centers for Disease Control and Prevention, including for how Institutions of Higher Education should manage human health risks associated with Coronavirus.

We address five potential student and campus scenarios: that may prompt an institution to have questions about how to comply with Title IV, HEA requirements if the Coronavirus impacts a student or a campus:

A student was enrolled or was supposed to begin a travel-abroad experience and either the student has been called back to the U.S. or was never able to begin the travel abroad experience;
A student was enrolled in a program and met the requirements for full-time enrollment; however, due to the COVID-19, one or more classes – such as an internship, a clinical rotation, student teaching or fieldwork – have been cancelled and now the student has fallen below the 12 credit hour minimum and is no longer considered to be a full-time student;
A student is quarantined and misses class or a student is incapacitated due to COVID-19 illness;
A campus temporarily stops offering ground-based classes in order to prevent the spread of COVID-19;
A foreign school that serves U.S. students who participate in title IV programs temporarily suspends operations due to COVID-19.

We offer information below about options we are making available to institutions under our current statutory authority to provide as much flexibility as possible so that you can continue to serve students. In some instances, we have been asked to consider providing flexibilities that are beyond our statutory authority. As a result, we cannot provide those flexibilities. If you have questions about the information provided in this electronic announcement, or you are encountering a scenario that we have not addressed, please email the Department at COVID-19@ed.gov.
We recommend that institutions document, as contemporaneously as possible, any actions taken as a result of COVID-19, including those actions described in this document.

Accommodating Students Whose Enrollment is Disrupted by Coronavirus
Our goal is to work with institutions and find ways to enable you to accommodate students and help them continue their education despite interruptions caused by COVID-19. For many institutions, online education will provide a viable option for continuing to teach students through COVID-19-related interruptions. In some instances, students enrolled in ground-based programs at campuses that must temporarily close could participate in distance education for a period of time and then resume ground-based attendance when the campus reopens. In other instances, an institution may provide online learning opportunities for a student who was recalled from a travel-abroad program but the student is too late into the semester to enroll in other classes offered by the home campus, or the student who arrived in a foreign country intending to complete a travel abroad experience finds that the program has now been cancelled or temporarily suspended. We are providing the following flexibilities to institutions to help them understand what options they can make available to students and remain in compliance with Title IV requirements.
Approval to Offer Distance Education

The Department is providing broad approval to institutions to use online technologies to accommodate students on a temporary basis, without going through the regular approval process of the Department in the event that an institution is otherwise required to seek Departmental approval for the use or expansion of distance learning programs. This flexibility only applies to a program during a payment period that overlaps the date of this electronic announcement or the following payment period. If an institution chooses to continue offering a new program or use distance education in a manner requiring the Department’s approval after that point, it must seek approval under the Department’s normal process.

We are also permitting accreditors to waive their distance education review requirements for institutions working to accommodate students whose enrollment is otherwise interrupted as a result of COVID-19. We currently are limiting that permission to distance learning opportunities developed for the purpose of serving students who were already in attendance, but whose attendance was interrupted by COVID-19. Please note that this flexibility is not available for clock-hour courses that lead to licensure if the licensure body will not accept distance learning courses or hours or give credit for them toward the number of hours a student must complete.

We want to make clear to institutions that for Title IV, HEA purposes, distance learning does not require the use of sophisticated learning management systems or online platforms, though accreditors may have additional standards included in their review of distance learning programs. We are, however, permitting accreditors to waive those standards for schools implementing distance learning programs solely for the purpose of allowing currently enrolled students to complete a term that is interrupted by COVID-19 closures. To meet the Department’s requirements for providing distance education, an institution must communicate to students through one of several types of technology – including email – described under 34 CFR § 600.2, and instructors must initiate substantive communication with students, either individually or collectively, on a regular basis. In other words, an instructor could use email to provide instructional materials to students enrolled in his or her class, use chat features to communicate with students, set up conference calls to facilitate group conversations, engage in email exchanges or require students to submit work electronically that the instructor will evaluate.

Institutions may provide distance learning temporarily to accommodate students as a result of a COVID-19 interruption, including in cases where students began attendance in classes offered in a brick-and-mortar setting but were transitioned to a distance education format in the middle of the term. In these cases, we will accept the accreditation and state authorization of the institution for the programs in which those students were enrolled prior to the interruption due to COVID-19 to enable students to complete the current term.

Institutions may also enter into temporary consortium agreements with other institutions so that students can complete courses at other institutions but be awarded credit by their home institution. In addition, in instances where accrediting agencies require students to complete a final number or percentage of credits in residence at the institution, accrediting agencies may waive that requirement for students impacted by COVID-19 without objection by the Department.

The Department will permit students who wish to take an approved leave of absence for COVID-19-related concerns or limitations (such as interruption of a travel-abroad program), to take such leave, even if the student notifies the institution in writing after the approved leave of absence has begun. In such a case, the institution may retain those Title IV funds to apply when the student continues enrollment. If the student does not return to complete their program within 180 days, the school would then be expected to perform the Return of Title IV funds calculation based on the date on which the leave-of-absence began. Note that in term-based programs, if a student takes an approved leave of absence from a term-based program, the institution must ensure that the student is permitted to complete the coursework he or she began prior to the leave of absence.

Finally, because we understand that some students may have been recalled from travel abroad programs or canceled-out of experiential learning opportunities after the semester began, institutions may offer courses to those students on a schedule that would otherwise be considered a non-standard term, if doing so enables those students to complete the term. These flexibilities will also be provided to institutions, or their additional locations or programs, that must temporarily close as a result of COVID-19.

Foreign Schools
We cannot extend flexibility regarding the use of distance learning to foreign schools since the Higher Education Act does not permit foreign schools to provide distance learning to U.S. students who participate in Title IV, HEA programs. We continue to consider if there are any other flexibilities we could extend to foreign schools that temporarily close due to COVID-19.

Federal Work Study (FWS)
Federal law includes a provision allowing an institution to make FWS payments under certain limited circumstances to disaster-affected students who are unable to continue working. Given the unique nature of this situation, it is unlikely that an entire region would be declared a Federal disaster area, yet to students enrolled at a campus that must close temporarily, the loss of this important form of financial aid can be devastating. The impact may be magnified if the institution accommodates students by providing alternative instructional opportunities and the student is required to continue paying tuition, but the student loses FWS as an important part of their financial aid award. For students enrolled and performing FWS at a campus that must close due to COVID-19, or for a FWS student who is employed by an employer that closes as a result of COVID-19, the institution may continue paying the student Federal work-study wages during that closure if it occurred after the beginning of the term, the institution is continuing to pay its other employees (including faculty and staff), and the institution continues to meet its institutional wage share requirement. Students who were prevented from beginning a term at the institution as a result of a COVID-19-related disruption would not be eligible for Federal Student Aid for that term, and therefore could not be paid FWS wages for hours they did not work. Graduate students who are paid FWS wages on salary may continue to be paid for the remainder of the term if the institution is also paying its faculty and staff during that period. In these instances, institutions should document (as contemporaneously as feasible) that the COVID-19 disruption was the reason the student received FWS funds without documentation of hours worked.

Length of Academic Year
The Department is authorized under 34 CFR § 668.3 to approve a reduced academic year. If at any point an institution determines it will close as the result of a campus health emergency, it may contact the School Participation team to request a temporary reduction in the length of its academic year.

Professional Judgement
Financial aid administrators (FAA) have statutory authority to use professional judgement to make adjustments on a case-by-case basis to the cost of attendance or to the data elements used in calculating the EFC to reflect a student’s special circumstances. The use of professional judgement where students and/or their families have been affected by COVID-19 is permitted, such as in the case where an employer closes for a period of time as a result of COVID-19. In making professional judgement determinations, FAAs must obtain documentation and retain it in each student’s file. This documentation must substantiate the reason for any adjustment. Institutions are reminded that, regardless of how broadly an event may affect its student population, professional judgement determinations must be made and documented on a case-by-case basis.

Satisfactory Academic Progress (SAP)
An institution’s SAP appeal policy (34 CFR § 668.34(a)(9)) must, among other things, describe the basis on which a student may file an appeal: the death of a relative, an injury or illness of the student, or other special circumstances. Circumstances related to an outbreak of COVID-19, including, but not limited to, the illness of a student or family member, compliance with a quarantine period, or the general disruption resulting from such an outbreak may form the basis of a student’s SAP appeal even if not specifically articulated in the institution’s SAP policy.

Students Who Did Not Begin Attendance
We are aware that many U.S. students enrolled in eligible foreign institutions and in study abroad programs offered by domestic institutions have already been affected by local outbreaks of COVID-19 and the measures taken by institutions in response. Of immediate concern are those students who travelled to overseas destinations but were unable to begin classes due to school closures. There may also be instances where students at domestic institutions are similarly affected and unable to begin classes. Because these students did not begin attendance in a payment period or period of enrollment, 34 CFR § 668.21 (rather than Return of Title IV Funds) applies. In such a situation, the institution must return all Title IV grant funds disbursed for the payment period or period of enrollment and all Direct Loan funds that were credited to the student’s account at the institution for that period. The institution must also return Direct Loan funds in the amount of payments made directly by or on behalf of the student to the institution for the period, up to the total amount of the loan funds disbursed. The institution is not responsible for returning Direct Loan funds that were disbursed directly to the student in the form of a credit balance as long as the institution was not aware that the student would not attend prior to the disbursement, and students will be able to repay those funds as a part of their educational loans. In these circumstances, institutions are permitted, but not required, to return all of a student’s Direct Loan funds, including the amount comprising the credit balance.
Normally institutions, once aware that a student will not begin or has not begun attendance, must notify the loan servicer which results in issuance of a final demand letter to the borrower. However, we have determined that in the case where a student was unable to begin attendance due to a COVID-19-related school closure, the provisions of 34 CFR § 668.21(a)(2)(ii), requiring the institution to notify the servicer of that student’s failure to begin attendance, do not apply because the option for the student to begin attendance did not exist. Accordingly, the institution should not notify the servicer that the student did not begin attendance. He or she will be permitted to repay any Direct Loan funds received under the terms of the promissory note. This will also prevent a student from being required to enter repayment within six months of withdrawing if the student withdrew as a result of a Coronavirus-related interruption.

Enrollment Status Changes
We do not have the authority to waive the requirement to award or disburse Title IV funds based on a student’s actual enrollment status. For example, assuming an institution defines full-time enrollment as 12 credit hours, when a full-time student enrolled for 12 credit hours drops or withdraws from three credits, that student is now enrolled at three-quarter time status. However, we remind institutions that for Direct Loans, the institution must only confirm at least half-time enrollment status as of the time of disbursement. It is not necessary to recalculate a student’s Direct Loan eligibility based on changes in enrollment status that occur after the institution originates a Direct Loan. For enrollment status changes that occur after an institution’s established Pell Grant recalculation (census) date, we do not require recalculation. Note that the student must have begun attendance in all courses comprising the enrollment status on which the Pell Grant payment was based.

Return of Title IV Funds
Even in the case of a disruption from COVID-19, an institution must return any Title IV funds for which it is responsible in accordance with the provisions of 34 CFR § 668.22 when a student withdraws. Currently, we do not have the authority to waive the statutory requirement for the return of unearned Title IV funds in the case where a student (who receives Title IV assistance) withdraws from an institution during a payment period or period of enrollment after having begun attendance. However, the guidance provided below explains the requirements for performing Return of Title IV Funds calculations in situations where an institution has temporarily ceased operations as a result of a COVID-19 disruption.

Definition of a Withdrawal Date
If an institution ceases operation during a payment period and fails to reopen by the end of that payment period, its students are considered no longer in attendance and must be considered withdrawn for that payment period or period of enrollment, and would be subject to Return of Title IV funds requirements. Similarly, if an institution closes and subsequently reopens during a payment period, any students who began attendance during that payment period but failed to return when the institution reopens must be considered withdrawn for that payment period. If the institution is required to take attendance, the withdrawal date is the last day of documented attendance prior to the closure. If the institution is not required to take attendance, the institution can use any applicable option under 34 CFR § 668.22(c), including the midpoint of the payment period or period of enrollment under 34 CFR § 668.2(c)(1)(iii) or, because the closure was a circumstance that the student could not control under 34 CFR § 668.22(c)(1)(iv), the date that the institution ceased operation. When determining the number of days in the payment period or period of enrollment (the denominator of the calculation), the institution should include all the days that the student was scheduled to attend during that period on the date of the withdrawal. For a clock-hour program, an institution should not include as “scheduled hours” any hours on days that it was closed.

Date of Determination and Timeframes for Returns
Normally, if a student does not provide notification to an institution of his/her withdrawal, the date of determination that the student has withdrawn is the date that the institution becomes aware that the student ceased attendance. This is, in most cases when an institution closes for reasons beyond its control, the date of the closure. Therefore, the timeframes for completing Return of Title IV Funds calculations and making the appropriate returns or post-withdrawal disbursements begin on that date (e.g. 30 days to perform the calculation, 45 days to return the funds, etc.).

Reentering the Same Payment Period
If an institution that has closed subsequently reopens during the same payment period or period of enrollment, and permits students to continue coursework that they were taking at the time of the closure, students that return to class at that time are considered to have reentered the same period and retain eligibility for Title IV aid that they were otherwise eligible to receive before the closure. If a student in this situation subsequently withdraws, the institution must exclude the number of days that it was closed (if the closure was for at least five consecutive days, in combination with weekends or other scheduled breaks) from both the number of days the student completed and the total number of days in the payment period or period of enrollment. If the institution altered the number of days in the payment period or period of enrollment following the closure (e.g. if it adds days to the term to make up for the time when it was closed), the institution should use the new number of days in the student’s Return of Title IV funds calculation.

NSLDS Enrollment Reporting
In general, when a student withdraws during a payment period, the effective date for the withdrawn (‘W’) status for enrollment reporting purposes is the withdrawal date used by the institution in accordance with 34 CFR § 668.22(b) or (c). However, notwithstanding the requirement that the institution perform a Return of Title IV funds calculation for students when an institution unexpectedly ceases operation during a payment period and fails to reopen during that payment period, we permit an institution to defer reporting an affected student’s enrollment status as “withdrawn” in these circumstances when the institution has a reasonable expectation that—
The institution will reopen at the start of a payment period that begins no later than 90 days following the closure; and The student will resume attendance when the institution reopens.

In these cases, the institution should continue reporting the most recent enrollment status that it reported for the affected student prior to the closure. If the student does not resume attendance as expected, the institution must change the student’s enrollment status to “withdrawn” using the student’s actual withdrawal date as the enrollment status effective date.

While the coronavirus threat to the American public remains low, we encourage school communities to take all steps to ensure the health and well-being of students, faculty, and staff. We established the website, https://www.ed.gov/coronavirus?src=feature, to provide general information and guidance for school communities, including links to information posted by the Centers for Disease Control and Prevention. We appreciate your cooperation and welcome any additional questions at COVID-19@ed.gov.

DETERMINING THE LENGTH OF A SCHEDULED BREAK

Understanding NSLDS Enrollment Reporting

Autumn and Winter holiday breaks present unique challenges for institutions when students withdraw from school. Once a student’s withdrawal date is determined, a school needs to calculate the percentage of the payment period or period of enrollment the student completed to determine the percentage of Title IV Federal Student Aid funds the student earned. It’s common for schools to schedule holiday breaks lasting five or more days during Thanksgiving under most academic calendars and Winter Breaks in non-term and nonstandard term calendars. Institutionally scheduled breaks of five or more consecutive days are excluded from the Return to Title IV (R2T4) calculation as periods of nonattendance. Errors made when determining the length of a scheduled break lead to errors in the amount of aid students are eligible for.

Determining the length of a scheduled break

Step 1 – First determine the last day that class is held before the scheduled break. The scheduled break begins on the next day.

Step 2 – Next determine the last day of the scheduled break. The scheduled break ends on the day before classes resume.

Step 3 – Count the days.

REMEMBER – If your institution’s academic calendar schedules classes that end on a Friday, but don’t resume until the Monday after the break your break may be up to nine days long. Once you’ve properly determined the length of your scheduled break, you can subtract it from the numerator and denominator of the R2T4 calculation, ensuring that your calculations yield the proper amount of aid for withdrawn students.

Knowing what to watch out for can help you avoid compliance problems.
R2T4 errors are one of the top three audit and program review findings at institutions each year. R2T4 errors related to academic calendars and scheduled breaks are often systemic because the schedule itself affects all students.


Institutions with questions about Title IV and compliance with Federal Regulations related to Federal Student AId Programs are welcome to contact our office for assistance.

FINAL ACCREDITATION AND STATE AUTHORIZATION REGULATIONS RELEASED

The United States Department of Education published final accreditation and state authorization regulations in October. The rules which will govern accrediting agencies and how they accredit institutions, as well as state authorization rules for distance education providers will have two different effective dates. Most of the published regulations will take effect on July 1, 2020, however some of the provisions were scheduled for early implementation beginning on November 1, 2019.

600.2 – Institutional Eligibility

600.9 – State Auth – Religious Institutions

668.43 – State Complaint Process

668.50 – Institutional Disclosure for Distance Programs

The remaining regulations pertaining to the Department’s recognition of accrediting agencies, will take effect on July 1, 2021.

SUMMARY OF MAJOR POLICY CHANGES RELATED TO ACCREDITATION

  • Eliminate geography to determine an accreditor’s scope of recognition and clarify that institutional mission, rather than geographic location, should guide the quality assessment of an institution and its programs.
  • Affirm that accreditors must respect the mission of an institution of higher education that relies upon religious tenets, beliefs, or teachings.
  • Encourage institutions to evaluate the merit of transfer credits and prior learning assessment more fairly to reduce the need for students to take – and pay for – the same classes twice.
  • Allow accreditors to establish different methods of monitoring institutional success, based on the mission of the institution and the goals of its students.
  • Provide flexibility for accreditors to support innovation in higher education, recognizing that innovation has inherent risk, and monitoring the innovation carefully to intervene when student success is at risk.
  • Engage employers more directly in the evaluation of program quality and allow for institutional decision-making models that give employers a more prominent role in recommending program or curriculum updates.
  • Provide opportunities for accreditors to increase standards for accountability, while also providing an appropriate amount of time for institutions to make the changes needed to meet those standards.
  • Allow accreditors to take earlier action when institutions are struggling to require teach-out plans and permitting accreditors to permit teach-out agreements before a school announces its closure.
  • Reduce credential inflation, especially in programs that lead to a State license, to allow low income students the opportunity to pursue those occupations and to ensure that the cost of qualifying for work does not exceed a graduate’s likely earnings.
  • Reduce the time and complexity associated with approving an accreditor’s application for initial or renewal of recognition.

SUMMARY OF MAJOR POLICY CHANGES RELATED TO STATE AUTHORIZATION

  • Make clear that an institution must identify the State in which a student is “located” and, therefore, the State in which the institution must have authorization.
  • More clearly define State authorization reciprocity agreements and reaffirm that they meet the requirements of the State authorization regulations for States that elect to participate in them.
  • Expand consumer protections for students who are enrolled in programs that lead to occupational licensure, including those enrolled in ground-based courses or programs.
  • Reduce the disclosures that institutions must provide students to reduce the cost and burden of distributing them and increasing the chances that students will consider them.
  • Eliminate requirements for States to establish new or separate consumer complaint processes for students enrolled in distance learning programs, while providing other options to ensure consumer protection.
  • Enable institutions to determine the States for which it will determine occupational licensing requirements, while requiring institutions to report that information accurately to students.
  • Enable students to continue their education, even if work or military service requires them to move to a new State, and to allow students to complete internships with potential future employers, without adding new State licensing fees to their institutions.

Institutions with questions pertaining to this or other matters of compliance with Accreditation, Federal Student Aid standards are welcome to contact our offices for additional assistance.


THREE STEPS TO CASH MANAGEMENT COMPLIANCE

Higher Ed Executives Financial Aid Consultants Can help you gain compliance with title iv cash management regulations

FSA recently released an electronic announcement reminding institutions of the requirements for proper cash management compliance. Disbursing aid timely, resolving excess cash and reconciliation are necessary procedures and controls to ensure compliance with the federal regulations. Noncompliance in these areas often results in institutions being placed on the Heightened Cash Monitoring disbursement method and often with a requirement that the school post an irrevocable Letter of Credit equal to a percentage of title iv funds that have been drawn down in prior years. It’s not pretty. The simplest thing to do to avoid this is to have a handle on some cash management basics.

Three Steps to Cash Management Compliance:

1. Submit disbursement records timely.

All disbursement records should be sent to COD within 15 days after making the disbursement or becoming aware of the need to adjust a student’s previously reported disbursement.

2. Keep an eye out for excess cash and if necessary, return any undisbursed funds to the Department.

Excess Cash is any amount of title iv funds (excluding Perkins) that the school does not disburse to students or parents by the end of the third business day after the date the school received funds from the department. Excess cash can also occur when a school deposits previously disbursed funds into their federal bank account and lets it sit for more than three days before disbursing it to another student or returning it to the Department.

3. Reconcile regularly.

If you are reconciling all title iv disbursements on at least a monthly basis, you’ll be in a good position to ensure that you are meeting the disbursement reporting and excess cash deadlines. Regularly reconciling both internally between business office and financial aid office data as well as externally between financial aid office data and the Department’s COD and G5 systems will make final reconciliation and program year closeouts a snap. Plus, your auditors will be very happy to see the proof of your regular efforts.

TEN REASONS SCHOOLS ARE PLACED ON HEIGHTENED CASH MONITORING

West Virginia’s Public Colleges recently made the news when the Department placed more than a dozen schools in the state on Heightened Cash Monitoring after the schools failed to provide their audit on time. It’s extremely rare to see a public school placed on Heightened Cash Monitoring since public schools are backed by the “full credit and faith of the state” but the Department cited the State’s colleges for their demonstrated lack of administrative capability over the late and missing audits. So let’s look at the ten reasons a school gets placed on HCM.

10 REASONS SCHOOLS ARE PLACED ON HEIGHTENED CASH MONITORING

Accreditation Problems – Includes accreditation actions such as the school’s accreditation has been revoked and is under appeal, or the school has been placed on probation.

Administrative Capability – Concerns about the institution’s ability to manage the Title IV programs including student file maintenance, record retention, and verification. 

Audit Late/Missing – School did not submit their audit by the due date and is considered not financially responsible.

Audit (Severe Problems) – School has severe audit findings which could include financial statements, internal controls, and compliance with laws, regulations, and provisions of contract or grant agreements.

Default Rate – A school’s cohort default rate for Perkins loans made to students for attendance at the school exceeds 15% or the cohort default rate for Federal Stafford loans or for Direct Subsidized/Unsubsidized Loans made to students for attendance at the school equals or exceeds 30% for the three most recent fiscal years or if the most recent cohort default rate is greater than 40%.

Denied Recertification (PPA Not Expired) – School’s recertification was denied but its Program Participation Agreement has not yet expired.

Financial Responsibility – School has a failing or a zone composite score or other concerns such as unreconciled accounts.

Change In Ownership Problems (Eligibility) – Issues identified with information needed on a Change in Ownership application such as missing/incorrect same-day balance sheet or other needed documentation; or an unreported CIO is discovered.

Program Review – School is being reviewed by the Department as part of its normal oversight and monitoring responsibilities or as a result of concerns regarding the school’s administrative capability and financial responsibility.

Program Review (Severe Findings) – School has potential of severe program review findings such as failure to make refunds or return of Title IV funds.