ED’s Office of Postsecondary ED released an update to the COVID-19 TITLE IV Frequently Asked Questions last month, clarifying the rules for COVID related R2T4s. 

Q: Is the R2T4 waiver under the CARES Act mandatory, or may an institution opt to continue returning funds to the Title IV programs even for those students whose withdrawals are the result of circumstances related to the COVID-19 emergency?

A: Section 3508 of the CARES Act provides that the Secretary shall waive the requirement to return funds under the Return of Title IV Funds requirements for students who withdraw from a payment period or period of enrollment as a result of a qualifying emergency. This effectively means that no statutory basis exists for returning Title IV funds for these students for the duration of the period covered by the waiver. 

The May 15, 2020 Electronic Announcement (EA) outlines how institutions can comply with the CARES Act requirements relative to situations where a student’s withdrawal is determined to be COVID-19 related, i.e., maintain all Title IV funds on the student’s ledger account, disburse any funds the student was eligible to receive that were not disbursed prior to the withdrawal, and make no adjustments to disbursement amounts reported in COD.

The Department is aware of concerns over the possibility that students who withdraw as the result of circumstances related to the COVID-19 emergency will seek payment of the credit balances that may be left on their accounts since their institutions are not required to return any Title IV funds. As a result of CARES Act relief, these students would also not be required to repay Direct Loan funds disbursed for the payment period or period of enrollment in which they withdrew, nor would their Pell lifetime eligibility or Subsidized Loan usage be affected by their receipt of Title IV aid for the period. This would occur in situations where the student receives a substantial or total reduction of institutional charges due to the withdrawal, in effect creating what may have been an unintended student credit balance from the unreturned Title IV funds.

Accordingly, in these situations we will permit institutions who have written authorization from the student, to apply the remaining amount of a student’s credit balance from these Title IV disbursements (after all charges on the student’s account are paid) to reduce Direct Loan disbursements received for attendance at the institution for periods prior to the payment period in which the student withdrew. The institution must obtain this authorization (which may be electronic) from the student prior to applying his or her credit balance for this purpose.  The institution must also notify any affected student of the action and the amount that was repaid, and the institution must return the Direct Loan funds in the COD and G5 systems. An institution may only exercise this authority for Direct Loan award years that are currently open.  If the amount of the student’s credit balance resulting from CARES Act R2T4 relief exceeds the amount of Direct Loan disbursements received for prior periods, the institution may, with written authorization, use the credit balance to pay down the prior Direct Loan disbursements, but must provide the remaining credit balance amount directly to the student.

Regarding the concern that a student may falsely report circumstances related to the COVID-19 emergency, the Department is unaware of widespread abuse occurring in this area. However, if an institution has cause to doubt that a student’s written attestation that his or her withdrawal is COVID-19 related, it may request any additional documentation reasonably necessary to determine the accuracy of the attestation. This conforms with the requirement to identify and resolve conflicting information under 34 CFR 668.16(f). (Published October 5, 2020) 


What is the deadline (project period or period of performance) for institutions to spend Higher Education Emergency Relief Fund (HEERF) funds received under the CARES Act?


All institutions were given 1 calendar year (365 days) from the date of award in their HEERF Grant Award Notification (GAN) to complete the performance of their HEERF grant.


Therefore, for example, if a grantee received a GAN on April 7, 2020, the one calendar year

period of performance for their HEERF grant would be through April 6, 2021.

Please note that after the end of the year-long period of performance, grantees have an

additional 90 calendar days to liquidate their obligations made during their year-long period

of performance as part of the grant closeout procedures (2 CFR § 200.343(b)).


The Department understands that some grantees, even given the emergency nature of the

HEERF grant, may be unable to obligate funds by this time. Consequently, no-cost

extensions (NCEs) of up to 12 months are available as provided for in 2 CFR §

200.308(d)(2). NCEs may not be exercised merely for the purpose of using unobligated

balances. Given the emergency nature of HEERF grants, the Department does not intend an

NCE to extend longer than 12 months. HEERF grantees are encouraged to discuss any need

for an NCE with their respective program officer well in advance of the end of their grant

period of performance.


For general information about grant management, grantee responsibilities, and grant

closeout, please consult our guide, Grantmaking at ED, available here.



Last Month ED published an announcement stating that schools would satisfy the quarterly reporting requirements in the CARES Act by simply reporting each month in compliance with the Federal Funding Accountability and Transparency Act of 2006 (FAFTA). The only problem is that most institutions don’t have to comply with FFAFTA because they don’t make subawards from federal grants. According to NASFAA, ED will be issuing a Frequently Asked Questions “to explain that schools that do not have subawardees for their CARES Act formula grants would not have a FFATA reporting obligation.”


Institutions that received funding under the CARES Act must begin reporting monthly to FFATA, according to a recent electronic announcement from ED’s Office of Postsecondary Education. The quarterly reporting requirements for the CARES Act are considered to be met under the more frequent, monthly reporting requirements of the Federal Funding Accountability and Transparency Act of 2006 (FFATA), Pub.L. 109-282, as amended by the Digital Accountability and Transparency Act (DATA Act), Pub.L. 113-101.

Through the FFATA Subaward Reporting System (FSRS), CARES Act grantees report the following data elements subawards greater than $25,000:
• Name of entity receiving award
• Amount of award
• Funding agency
• North American Industry Classification System (NAICS) code for contracts / Catalog of Federal Domestic Assistance (CFDA) program number for grants
• Program source
• Award title descriptive of the purpose of the funding action
• Location of the entity (including congressional district)
• Place of performance (including congressional district)
• Unique identifier of the entity and its parent
• Total compensation and names of top five executives (same thresholds as for primes)


On August 2, 2020, the COD system was updated to support CARES Act reporting for students who qualify for a Title IV waiver because they withdrew due to COVID-19. The implementation of these changes will be rolled out in two phases. In the first phase, FSA implemented a new Coronavirus Indicator on COD and implemented new or modified COD Edits. A second phase is expected to come later in September which will include modifications to the Return to Title IV (R2T4) calculator on COD and new reports as well as an updated COD technical reference to support the new processes and file Edits.

For students whose withdrawals were related to COVID-19, Direct Loan Funds received for the period covered under the waiver will be cancelled. As a result, the loan period will be excluded from students’ Subsidized Loan usage used to calculate the 150% Subsidized Usage Loan Limits. Pell grants received for the period will also be excluded from a student’s Lifetime Eligibility limit under Pell LEU. Schools will use the new COD functions to report student information for any students they were not required to return funds for under the waiver.

Check out this announcement from FSA for more information about the new “Coronavirus Indicator” checkbox and COD system Edits that you will begin using to report that an affected student’s aid disbursement qualifies for these exceptions under the waiver.