Scenario: My school is considering delaying the refund of room and board until the 2020-21 academic year for continuing students, as we have moved online during the COVID-19 crisis.
Answer: Yes. According to guidance NASFAA has received from the U.S. Department of Education (ED), if the institution decides to apply some type of credit or voucher toward next year's institutional charges, the amount of that credit/voucher would be considered estimated financial assistance (EFA) when packaging the student with Title IV aid for next year. The decision on whether to give students refunds or adjustments to institutional charges (room, board, tuition, fees, etc.) is entirely up to each institution and beyond ED's purview.
If the institution decides to make refunds or adjustments to institutional charges during a current award year payment period covered by the March 5, 2020 Electronic Announcement and its attached COVID-19 FAQs, the school is not required to recalculate the student's cost of attendance (COA) nor to recalculate the student's Title IV aid for the current award year/academic year, so it is not EFA for the current award year/academic year.
Remember that all existing cash management regulations continue to apply, so see AskRegs Q&A, Can We Hold the Title IV Credit Balance Until the Next Award Year If We Refund Institutional Charges Due To Coronavirus? Once you deliver the Title IV credit balance to the student or parent for the current award year, those funds belong to the student or parent and must be used to cover educational expenses. If the student or parent uses those funds to make an advance payment towards next year's charges, it is a payment on the student's account for next year and not estimated financial assistance (EFA) for either award year. This is different from the scenario when the school delays a refund of institutional charges and provides an institutional credit towards next year's institutional charges, in which case it is EFA next year. A Title IV credit balance is never EFA in any award year.
Remember also that under 668.164(h)(1), a Title IV credit balance only occurs whenever the amount of Title IV federal student aid funds credited to a student's ledger account for a payment period exceeds the amount assessed the student for allowable charges associated with that payment period. The order in which institutional and federal funds are applied to the student's account does not matter in this calculation. Guidance on how to calculate a Title IV credit balance can be found on page 4-51, with an example on page 4-52, of the 2019-20 FSA Handbook. Title IV rules only apply to Title IV credit balances as defined in 668.164(h) and not to credit balances caused by non-Title IV funds. See Volume 4, Chapter 2 of the FSA Handbook for more on Title IV credit balances.
See also AskRegs Knowledgebase Q&A, Are We Required To Adjust COA Or Awards If We Refund All or Part Of Tuition, Fees, Room, Or Board Due To Coronavirus?
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.