Can Emergency FSEOG Funds Be Used To Pay a Student's Outstanding Balance?

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This AskRegs Knowledgebase Q&A has been updated to remind schools that we don't yet have a definitive answer, and until that time, this is the school's decision to make.

We don't have a definitive answer yet. We asked the U.S. Department of Education (ED) several weeks ago and have not yet received an answer.

That said, Emergency FSEOG funds must be spent to assist undergraduate or graduate students in paying for unexpected expenses and to cover unmet financial need as the result of the COVID-19 qualifying emergency. The school will want to consider the reason it is awarding the Emergency FSEOG in the first place, and if that reason is best served by crediting the funds to the student’s account instead of releasing it to the student. You have to ask yourself, “Is it really unmet need or an outstanding balance as a result of the qualifying emergency?” NASFAA cannot answer this question for the school. This is the school's decision to make, so you may wish to consult with your school's legal counsel for assistance. See also AskRegs Q&A, How Can Schools Use Campus-Based Funds As Emergency Aid?

Remember, cash management rules under 34 CFR 668.164 and 668.165 continue to apply if you decide to credit the Emergency FSEOG funds to the student’s ledger account. For example, you don't need the student's permission to pay tuition, fees, and institutionally provided room and board. Permission is required to apply Emergency FSEOG to the student's account to pay other allowable educationally related charges.

As soon as we have a definitive answer to this question, we will update this AskRegs Q&A and post it in our Coronavirus (COVID-19) Web Center and in Today's News. Be sure to visit the Web Center on a daily basis, as guidance is continuously changing.

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.