Does the R2T4 Waiver Also Apply To Payment Periods That Begin After March 13, 2020 and For 2020-21 and Beyond?

This AskRegs Knowledgebase Q&A was updated on February 1, 2023 to note that the COVID-19 national emergency will end on May 11, 2023.

Scenario: The school has academic programs with quarters, standard terms, nonstandard terms, and nonterm payment periods that start after March 13, 2020.

Answer: Yes. The May 15, 2020 Electronic Announcement, which was revised on June 16, 2020, applies the return of Title IV funds (R2T4) waiver to:

• Payment periods or periods of enrollment that include March 13, 2020; or
• Payment periods or periods of enrollment that begin between March 13 and the later of December 31 or the last date that the national emergency is in effect.

This is what we are calling the "covered period." In other words the covered period includes multiple payment periods or periods of enrollment. This means, for example, the R2T4 waiver now applies to quarters and nonterm payment periods/periods of enrollment that were previously excluded under the same May 15th  announcement. It also applies into the 2020-21 award year and beyond under the above conditions.

R2T4 waiver refers to the fact that the CARES Act, waives the requirement for the school or the student to return Title IV funds when a student withdraws due to COVID-19 anytime during the entire payment period that falls within the covered period. For example, for a payment period that includes March 13, 2020, the waiver applies even to students who withdrew in January or before the disruption in campus operations due to COVID-19.

COVID-19 Withdrawal Determinations: The determination of whether a student withdrew due to COVID-19 still must be made on a payment period-by-payment period or a period-of-enrollment by period-of-enrollment basis within the covered period. That is, you cannot assume all withdrawals are COVID-related for the payment period that includes March 13th all the way through the end of the qualifying emergency. You have to determine this for each payment period or period of enrollment separately.

For example, the term-based school experienced a disruption in educational delivery (instruction) during the spring term/payment period and moved all classes from ground-based (residential) classes to online classes in the middle of the spring term when the outbreak started. The school also sent students home at that time. In this scenario, you can assume all withdrawals during the spring term are COVID-related and you do not need individual attestations from students in order to exercise the R2T4 waiver.

Now comes the summer term/payment period. Before the summer term started, the school decided to continue all students in online classes for the summer term. These students remain off campus for the summer. These students start attendance in online classes for the summer term and they remain in online classes for the entire summer term. In this scenario, there are no disruptions in instruction (or campus operations) that take place during the summer term. The disruption occurred during the spring term, not the summer term. In order to exercise the R2T4 waiver, each student who withdraws from the summer term must provide an attestation confirming that his, her, or their withdrawal was due to COVID-19. In this scenario, the school cannot assume all summer withdrawals are COVID-related because there has been no disruption of instruction or campus operations that occurred during the summer term.

Now comes the fall term/payment period, which began on August 20. Students began classes on campus, and due to an outbreak on campus, instruction was moved online during the fall term. That would be an interruption in instruction or campus operations that occurred during the fall term, and all withdrawals from that term may be assumed to be COVID-related without individual attestations from students.

NASFAA has confirmed this guidance with the U.S. Department of Education (ED).

Per the May 15th announcement, "For institutions that did not undergo changes in educational delivery or campus operations as a result of the COVID-19 emergency, during a term or payment period within the covered period, the institution will be required to obtain a written attestation (including by email or text messages) from the student explaining why the withdrawal was the result of the COVID-19 emergency." Of course, the school could build the COVID-19 attestation into its existing official withdrawal process in order to prevent duplication of effort; how the school does this is up to the school. Without the attestation that the student withdrew due to COVID-19, you process R2T4 under normal pre-COVID rules in 34 CFR 668.22, and the student does not qualify for Direct Loan or TEACH Grant disbursement cancellation or exclusion of the Pell Grant disbursement from lifetime eligibility used (LEU).

Payment Period Or Period of Enrollment: Remember that standard term programs must use the standard term payment period (semester, trimester, quarter) in the R2T4 calculation; they do not have the option to use the period of enrollment. 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 Electronic Announcement language is unclear) that whichever period is used in the R2T4 calculation requires a determination of whether a student withdrew during that payment period or period of enrollment due to COVID-19.

Be sure to review AskRegs Q&A, How Do We Determine If a Withdrawal Was the Result Of a Qualifying Emergency Due To Coronavirus?

August 21, 2020 Electronic Announcement Update: "Where an institution has opted to use the period of enrollment to calculate its returns for a non-term or non-standard term program, the waiver may apply to a student who begins attendance in a payment period that includes December 31, 2020 or the last date that the national emergency is in effect and withdraws after the conclusion of that payment period but within the applicable period of enrollment."

Notes:

• This AskRegs Q&A was previously updated on August 25, 2020 to include clarification from the August 21, 2020 Electronic Announcement for nonterm and nonstandard term programs that use the period of enrollment (rather than the payment period) in their R2T4 calculations. It also reminds schools of the periods covered by the R2T4 waiver.
• This AskRegs Q&A was previously updated on June 24, 2020 to reflect June 16, 2020 changes to the May 15, 2020 Electronic Announcement, which expands the terms and nonterm payment periods to which the R2T4 waiver now applies.
• The previous version of the May 15th Electronic Announcement narrowly defined the payment period or period of enrollment to include only a payment period or period of enrollment that began on or included March 13, 2020.
• Since the March 13, 2020 payment period was over for most schools when ED finalized guidance, many R2T4 calculations were already done and unearned aid was already returned to ED. When implementing the R2T4 waiver, those schools re-disburse those unearned funds after the fact according to AskRegs Q&A, How Do We Implement the R2T4 Waiver If We Are Re-Disbursing Aid We Already Returned Under the R2T4 Calculation?  If the R2T4 calculation was not already done and unearned aid was not already returned to ED, the school disburses the aid and performs the R2T4 calculation to determine the amounts of unearned aid that will not be returned to ED according to AskRegs Q&A, How Do We Implement the R2T4 Waiver If We Are Performing the First R2T4 Calculation For the Student?