This AskRegs Knowledgebase Q&A was updated on August 30, 2020 to reflect extended timeframes and deadlines 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.
No. For any student who begins attendance in a payment period or period of enrollment in the covered period (defined below), and who withdraws from that period as a result of COVID-19, neither the school nor the student is required to return unearned Title IV funds. That is what we refer to as the return of Title IV funds (R2T4) waiver. The student therefore does not owe a Title IV overpayment and, as noted in the May 15, 2020 Electronic Announcement, the institution "is not required to notify the student or the National Student Loan Data System (NSLDS) of the overpayment or refer any portion of the overpayment to the Department."
If the school has already returned an overpayment on behalf of a student who withdrew from a payment period or period of enrollment within the covered period as a result of COVID-19, the overpayment must be re-disbursed to the student and reversed in NSLDS. We are unsure how schools are to reverse the reported overpayment in NSLDS. Please contact NSLDS Customer Service for instructions. For a period of time, NSLDS is only accepting voicemail messages and email requests for customer service requests.
"Covered period" refers to the fact that the May 15th Electronic Announcement now allows schools to apply the R2T4 waiver to: 1) payment periods or periods of enrollment that include March 13, 2020; or 2) payment periods or periods of enrollment that begin between March 13 and the later of December 31 or the last date that the qualifying emergency is in effect. See AskRegs Q&A, How Do We Determine If a Withdrawal Was the Result Of a Qualifying Emergency Due To Coronavirus?, for important details.
Remember, a standard term program can only use the payment period in the R2T4 calculation. A nonterm or nonstandard term program has a choice to use either the payment period or the period of enrollment in the R2T4 calculation. Therefore, it is NASFAA's understanding (because the EA language is unclear) that whichever period is used in the R2T4 calculation requires a determination of whether a student withdrew or owes an overpayment during that payment period or period of enrollment due to COVID-19.
Nothing has changed for Title IV overpayments in a payment period or period of enrollment that was used in the R2T4 calculation and that concluded prior to the covered period. If the payment period or period of enrollment ended before the covered period started, an overpayment of Title IV grant funds resulting from the R2T4 calculation still must be processed and reported. Title IV loans are repaid according to the terms of the promissory note and, therefore, are not reported as overpayments.
Note: This Q&A was previously updated on June 17, 2020 to reflect the June 16, 2020 updates to the May 15, 2020 Electronic Announcement, which included an expansion of the period to which the overpayment guidance applies--the covered period.
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