Are We Required To Report a Title IV Overpayment Due To a Coronavirus-Related Withdrawal?

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This guidance is not award-year-specific and applies across award years.

This AskRegs Knowledgebase Q&A was updated on April 11, 2023 to note that the general COVID-19 national emergency ended on April 10, 2023, while the separate public health emergency ends on May 11, 2023. With the introduction of two separate emergency end dates, it is now unclear which date is to be used for the expiration of the COVID-19 flexibility/waiver discussed below. See AskRegs Q&A, When Do the Various Title IV COVID-19 Flexibilities and Waivers End? 

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. The national emergency is now set to end on May 11, 2023.  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.

Update Notes:

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.