Are We Required To Recalculate COA Or Awards If We Adjust Charges Or Refund All Or Part Of Tuition, Fees, Room, Or Board Due To Coronavirus?

This AskRegs Knowledgebase Q&A was updated on February 1, 2023 to note that the COVID-19 national emergency will end on May 11, 2023.

This AskRegs Knowledgebase Q&A was updated on August 26, 2020 to reflect extended timeframes in the August 21, 2020 Electronic Announcement. The following COVID-19 flexibilities now apply through the end of the payment period that includes December 31, 2020 or the end of the payment period that includes the end date for the federally declared qualifying emergency related to COVID-19, whichever occurs later.

Scenario: As a result of the COVID-19 outbreak, we are planning to close our dormitories, etc. and we plan to refund a portion of the costs for students' room and board. We are also considering a partial refund of tuition and fees, etc.

Answer: No. According to the COVID-19 FAQs attached to the March 5, 2020 Electronic Announcement, "No. If, as a result of the COVID-19 outbreak, you provide a refund or waiver of expenses for all or part of a student’s tuition, fees, room and board charges, or other institutional charges, or if you become aware that a student has moved off campus for the remainder of the term, the Department will not require a re-evaluation of the student’s cost of attendance. Therefore, you are not required to make changes to a student’s Title IV awards on the basis of such changes."

It is NASFAA's understanding based on the above guidance that, if schools are not required to recalculate the cost of attendance (COA) or revise the student's Title IV financial aid, then the amount of the refund is not considered estimated financial assistance (EFA) for that award year.

Also, according to guidance NASFAA has received from the U.S. Department of Education (ED), the above guidance also applies for the entire award year when the school decides to increase or decrease tuition, fees, room, board, and other institutional charges after packaging.

Remember, such refunds noted above may cause Title IV credit balances on students' accounts. Schools are reminded that all cash management regulations in 34 CFR 668.164 and 668.165 still apply. For example, Title IV credit balances still must be delivered within required timeframes under 668.164(h)(2):

"(2) A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than—
(i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of that payment period; or
(ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period."

As another example, under 668.165(b), the school can hold Title IV funds on the student's ledger account for subsequent payment periods within the same award year, but only with the student's written permission to do so. Even then, the school must "pay any remaining balance on loan funds by the end of the loan period and any remaining other title IV, HEA program funds by the end of the last payment period in the award year for which they were awarded."

Note: 

This AskRegs Q&A was previously updated on August 26, 2020 to reflect extended timeframes in the August 21, 2020 Electronic Announcement to apply through the end of the payment period that includes December 31, 2020 or the end of the payment period that includes the end date for the federally declared qualifying emergency related to COVID-19, whichever occurs later.