Must It Be a Title IV-Approved Leave Of Absence To Qualify Under the COVID-19 Guidance?

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This AskRegs Knowledgebase Q&A was updated on December 21, 2020 to reflect the December 11, 2020 Federal Register guidance which extended previous flexibilities for Title IV-approved leaves of absence (LOA). The following COVID-19 flexibilities now apply through the end of the payment period that begins after the date on which the federally declared qualifying emergency related to COVID-19 is rescinded.

Yes, it must be a Title IV-approved LOA, but there are some COVID-19 exceptions to the regulatory definition, which are included in the March 5, 2020 Electronic Announcement, the May 15, 2020 Electronic Announcement, and the August 21, 2020 Electronic Announcement.

The following revised definition of a Title IV-approved LOA applies for all COVID-related purposes, including determining whether or not your students are withdrawals for Title IV purposes. It is a Title IV-approved LOA under the U.S. Department of Education’s (ED’s) COVID-19 guidance if all of the following conditions are met:

1) The institution has a formal policy regarding LOAs and the student followed that policy when requesting the LOA. ED allows exceptions to the school’s policy:

2) The institution determines that there is a reasonable expectation that the student will return to the school.

3) The institution approved the student's request in accordance with the institution's policy.

4) The LOA does not involve additional charges by the institution. Per the May 15th announcement, the tuition and fees component of the cost of attendance (COA) for a subsequent period in which the student returns from an approved LOA cannot include the tuition costs for coursework the student was taking when the LOA began.

5) The number of days in the approved LOA, when added to the number of days in all other approved LOAs does not exceed 180 days plus the number of additional days remaining in the calendar year (through December 31, 2020).

6) If the student is a Title IV loan recipient, the institution explains to the student, prior to granting the LOA, the effects that the student's failure to return from an LOA may have on the student's loan repayment terms, including the exhaustion of some or all of the student's grace period.

Under the CARES Act "[A]n institution of higher education may, as a result of a qualifying emergency, provide a student with an approved leave of absence that does not require the student to return at the same point in the academic program that the student began the leave of absence if the student returns within the same semester (or the equivalent)." In other words, this is not a requirement for nonterm or term-based programs for the duration of ED’s COVID guidance noted above.

R2T4 Implications
If the student goes on an approved LOA as redefined above, the student is not a withdrawal for Title IV purposes and does not qualify for the COVID-19 withdrawal benefits (loan and TEACH Grant disbursement cancellation or restoration of Federal Pell Grant and Direct Loan usage). The school does not set the Coronavirus Indicator in the Common Origination and Disbursement (COD) System.

The institution may retain the Title IV funds the student received for the payment period to apply when the student continues enrollment. The COA for the period in which the student returns may include living expenses even if the student enrolls in no additional credits. And, credits associated with the coursework a student is completing upon returning from the approved LOA may count toward that student's enrollment status.

If the student does not return to complete his, her, or their program within the timeframe in #5 above, the student becomes a withdrawal and the school must perform the R2T4 calculation based on the date on which the LOA began. If the student withdrew due to COVID-19, the student qualifies for the COVID-19 withdrawal benefits and the school sets the Coronavirus Indicator in COD for the applicable payment period/period of enrollment.

If the school does not have or grant a Title IV-approved LOA as redefined above, the student is a withdrawal for Title IV purposes. If the student withdrew due to COVID-19, the student qualifies for the COVID-19 withdrawal benefits and the school sets the Coronavirus Indicator in COD. The school performs the R2T4 calculation following the steps in AskRegs Q&As, How Do We Implement the R2T4 Waiver If We Are Performing the First R2T4 Calculation For the Student?, and How Do We Implement the R2T4 Waiver If We Are Re-Disbursing Aid We Already Returned Under the R2T4 Calculation?

R2T4 Scenario 1—School and Student Details for Fall 2020:

In this scenario, the student is not a withdrawal for the fall term and R2T4 is not calculated since the student went on an approved LOA for the fall. The school does not set the Coronavirus indicator because the student is not a withdrawal and does not qualify for the COVID-19 withdrawal benefits.

If the student doesn’t return from the LOA within the appropriate timeframe, then the school retroactively processes the R2T4 following the steps in AskRegs Q&As, How Do We Implement the R2T4 Waiver If We Are Performing the First R2T4 Calculation For the Student? Once the R2T4 calculation is performed, the school does not return any unearned Title IV aid (school or student portions), as allowed under the R2T4 waiver. The school sets the Coronavirus Indicator in COD because it has the necessary attestation from the student.

R2T4 Scenario 2—School and Student Details for Fall 2020:

In this scenario, the student is a withdrawal for the fall term because the school does not have a Title IV-approved LOA as revised above. R2T4 is calculated following the steps in AskRegs Q&As, How Do We Implement the R2T4 Waiver If We Are Performing the First R2T4 Calculation For the Student? Once the R2T4 calculation is performed, the school does not return any unearned Title IV aid (school or student portions), as allowed under the R2T4 waiver. The school sets the Coronavirus Indicator in COD because the student withdrew due to COVID and qualifies for the COVID-19 withdrawal benefits.

R2T4 Scenario 3—School and Student Details for Fall 2020:

In this scenario, the student is a withdrawal for the fall term because the school does not have a Title IV-approved LOA as revised above. Because there was a disruption in instruction and campus operations during the fall term, the school can assume the student is a withdrawal and not collect a written attestation from the student. R2T4 is calculated following the steps in AskRegs Q&As, How Do We Implement the R2T4 Waiver If We Are Performing the First R2T4 Calculation For the Student? Once the R2T4 calculation is performed, the school does not return any unearned Title IV aid (school or student portions), as allowed under the R2T4 waiver. The school sets the Coronavirus Indicator in COD because the student withdrew due to COVID and qualifies for the COVID-19 withdrawal benefits.

Notes:

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