Are Emergency Funds Provided To Students Due to Coronavirus Treated As Estimated Financial Assistance?

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This AskRegs Knowledgebase Q&A was updated on January 20, 2021 to reflect requirements under the 2021 Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA, Section 314 of the Consolidated Appropriations Act, 2021). The following guidance applies to both Higher Education Emergency Relief Fund (HEERF) grants under the CARES Act (HEERF I funds) and to new funds under the CRRSAA (HEERF II funds).

Emergency Funds From Institutional Non-HEERF Dollars: Yes. Under 34 CFR 685.102(b) and 673.5(c) Estimated financial assistance, emergency funds that are awarded from institutional dollars (that are not HEERF dollars) for students who have been affected by COVID-19 are considered estimated financial assistance (EFA) for Title IV purposes. According to guidance NASFAA has received from the U.S. Department of Education (ED) in the past, this is true even if the institutional funds are not earmarked to cover tuition and fees or another cost of attendance (COA) component, and even if those funds are not processed through the student’s ledger account at the institution. Recent changes to the law and ED guidance have not exempted institutional emergency funds from EFA. NASFAA is seeking relief on this provision. If that happens, we will update this AskRegs Q&A and post it in Today's News.

The March 5, 2020 Electronic Announcement and the April 3, 2020 Electronic Announcement allow schools to exercise professional judgment (PJ) to increase a student's COA to include educationally related expenses and to offset the emergency funds. As with all PJ adjustments, they must be performed based on special circumstances and on a case-by-case basis, which must be documented in the student's file. The school decides what documentation it deems appropriate for a PJ adjustment. It can be a signed statement, actual receipts for expenses, or other appropriate documentation--the more the better.

See also AskRegs Knowledgebase Q&A, Is a Public State School Considered a State Entity When Excluding Emergency Relief From Income and EFA?

Emergency Funds From Federal Supplemental Educational Opportunity Grant Dollars (Emergency FSEOG): No. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) allows institutions to use any portion of their FSEOG allocation, including any funds transferred from Federal Work-Study (FWS) , to award emergency financial aid grants (Emergency FSEOGs). Emergency FSEOG funds can then be spent to assist undergraduate or graduate students in paying for unexpected expenses and to cover unmet financial need as the result of a qualifying emergency. Emergency FSEOG funds are not treated as EFA when packaging students with other Title IV aid. For more information, see AskRegs Q&A, How Can Schools Use Campus-Based Funds As Emergency Aid?

Emergency Funds From the Higher Education Emergency Relief Fund (HEERF I and HEERF II): The CARES Act also created the Higher Education Emergency Relief Fund, which has separate rules from Emergency FSEOG funds. The April 3, 2020 Electronic Announcement states that any aid in the forms of grants or low-interest loans received by victims of an emergency from either a federal or state entity for purposes of providing financial relief is not counted as student or parent income for the calculation of expected family contribution (EFC) or as EFA when packaging the student. This applies to any funds a student will receive from an IRS stimulus check and/or funds a student will receive from the Higher Education Emergency Relief Fund. The same exemption from income is not provided for institutional emergency funds.

It is NASFAA's understanding based on conversations with ED that HEERF II grants awarded to students under CRRSAA are also not treated as EFA when packaging students. Likewise, HEERF II grants are not treated as taxable income or untaxed income for Title IV federal student aid purposes.

Note: This AskRegs Q&A was previously updated to clarify that public state colleges and universities are not considered state entities when awarding HEERF grants to students.

Student Aid Reference Desk: For additional information, try the Student Aid Reference Desk. It is a central hub of all the important financial aid resources you need with direct links to legislation, regulation, Dear Colleague Letters, and other ED and NASFAA references. It is updated on a rolling basis with the latest news and changes. Search Professional Judgment.

AskRegs Q&As represent NASFAA's understanding of regulatory and compliance issues. They are FOR INTERNAL USE ONLY. While NASFAA believes AskRegs Q&As are accurate and factual, they have not been reviewed or approved by the U.S. Department of Education (ED). If you should need written confirmation of AskRegs information for audit or program review purposes, please contact your ED School Participation Division. NASFAA shall not be liable for technical or editorial errors or omissions contained herein; nor for incidental or consequential damages resulting from the furnishing, performance, or use of this material.