Is There Regulatory Relief For Schools Impacted By Natural Disaster?

Today, as some institutions may be dealing with the impact of a natural disaster, NASFAA staff and Board of Directors send our thoughts and prayers for the safety and well-being of affected individuals.

NASFAA is reminding institutions about existing guidance regarding the impact of a "major disaster" on the administration of the Title IV federal student aid programs. Dear Colleague Letter GEN-17-08 and its attachment are intended to help Title IV student financial aid recipients and their families who are affected by a federally declared major disaster. It supplements all information in the FSA Handbook and supersedes guidance included in previous Dear Colleague Letters, including GEN-10-16, FP-10-06, GEN-05-17, and GEN-04-04.

In events when the President declares a disaster, ED provides general guidance for regulatory relief to students, institutions, lenders, guaranty agencies, and their servicers in administering the Title IV programs authorized under the Higher Education Act of 1965 (HEA), as amended. Unless stated otherwise, the regulatory relief described in GEN-17-08 applies to all recipients of Title IV aid and their families who at the time of a disaster were residing in, employed in, or attending an institution located in a federally declared disaster area in the U.S. The institution must follow the link and guidance in the Dear Colleague Letter to find out if its location qualifies. An institution experiencing a more localized disaster or an institution with a large number of eligible noncitizens who are from a country experiencing a significant natural disaster may seek relief from its School Participation Division.

To determine if your institution is located in a federally declared disaster area, visit Disasters and Other Declarations | FEMA.gov.

An institution with any questions or concerns should contact its U.S. Department of Education (ED) School Participation Division for guidance specific to the school's situation.

A lender or guaranty agency in the Federal Family Education Loan (FFEL) Program should contact its regional Financial Partners representative with Financial Institution Oversight Service.

Professional Judgment (PJ): In addition to the above guidance, note that Section 479A(f)(1),(2),(3) of the HEA [20 USC 1087TT] now includes examples of situations where a financial aid administrator may exercise their PJ authority in the event of a qualifying emergency to include (not an exhaustive list):

• Determining that the income earned from work for an applicant is zero, if the applicant can provide paper or electronic documentation of receipt of unemployment benefits or confirmation that an application for unemployment benefits was submitted; and/or
• Making additional appropriate adjustments to the income earned from work for a student, parent, or spouse, as applicable, based on the totality of the family's situation, including consideration of unemployment benefits.

ED shall adjust the model used to select institutions for program reviews to account for any rise in the use of PJ during qualifying emergencies.

For PJ purposes, Section 479A(f)(4) defines a qualifying emergency as:

• An event for which the President declared a major disaster or an emergency under section 5170 or 5191, respectively, of the Robert T. Stafford Disaster Relief and Emergency Assistance Act;
• A national emergency related to the coronavirus declared by the President under section 1621 of title 50; or
• A period of recession or economic downturn as determined by the U.S. Department of Education (ED), in consultation with the Secretary of Labor.

More Information: ED's Federal Student Aid National Disaster Information page provides further information including resources for students, parents and borrowers.