This AskRegs Knowledgebase Q&A has been updated to provide clarification from the U.S. Department of Education (ED) on guidance published in Return of Title IV Funds (R2T4) Q&A #2 on the COVID-19 Title IV Frequently Asked Questions (FAQ) Website and announced in the October 6, 2020 Electronic Announcement. This new guidance represents a different understanding of a phone conversation between ED and NASFAA earlier this year.
Scenario: Our school is implementing the R2T4 waiver under Section 3508 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), but we only want to implement the R2T4 waiver for students who withdrew on or after March 13, 2020 in the spring payment period that includes March 13, 2020.
Answer: Yes, but there is an exception. According to guidance NASFAA has now reconfirmed with ED, the school is allowed to choose to implement the R2T4 waiver assumption method after a certain date during a payment period or period of enrollment within the covered period, such as after March 13 in the scenario. However, if the school otherwise knows the student withdrew from the payment period/period of enrollment due to COVID-19 before its implementation date, it still must apply the R2T4 waiver to that student.
In order to implement the R2T4 waiver, the school can choose to do either:
Use the assumption method to assume all students who withdrew from affected programs during the payment period or period of enrollment to be COVID-19 related withdrawals if: 1) the school moved students from ground-based instruction to distance learning during the payment period/period of enrollment due to COVID-19; 2) the school closed campus housing or other campus facilities during the payment period/period of enrollment due to COVID-19; or 3) the school experienced other interruptions in instruction during the payment period/period of enrollment due to COVID-19; or
Collect individual attestations from students indicating they withdrew due to COVID-19.
The school is never required to use the assumption method, but if it uses the assumption method for an entire payment period for example, it must apply that policy to all students within the payment period. If the school chooses to use the assumption method after a certain date within the payment period, it must apply that assumption to all students after that date--it cannot apply the assumption method on a case-by-case basis after that date. And, just because the school uses the assumption method for one payment period does not mean it must use it for other payment periods.
That said, the R2T4 waiver can still be applied to payment periods/periods of enrollment for which the school does not apply the assumption method, either because it is not eligible to use it or chooses not to use it. In order to apply the R2T4 waiver for those payment periods or periods of enrollment, the school would need individual attestations from the students indicating they withdrew due to COVID-19. The school that does not use the assumption method is not required to solicit individual attestations from all student withdrawals to see if they withdrew due to COVID-19, but they would need an attestation to apply the R2T4 waiver.
In a conversation with ED earlier this year, NASFAA understood ED to say more broadly that schools had the authority to choose whether to implement the R2T4 waiver at all, or to implement the R2T4 waiver on a case-by-case basis, for broad categories of students, or on a payment period-by-payment period basis within the covered period. Our understanding was consistent with the wording of the CARES Act which specifically requires ED, not schools, to waive R2T4 requirements, as well as the fact that the May 15, 2020 Electronic Announcement uses the term "should" (not must or required) when it comes to the schools' implementation of the waiver.
ED and NASFAA have consistently encouraged schools to implement the May 15th guidance consistently to all students in the entire payment period or period of enrollment within the covered period, not just those who withdrew after March 13, 2020 during the spring 2020 payment period. There are legitimate reasons why a student might have withdrawn due to COVID-19 before March 13 in this scenario.
So, where do schools that implemented the assumption method after a certain date, such as March 13, go from here?
If the school had or has a policy to use the assumption method after a certain date during an affected payment period/period of enrollment within the covered period, the school needs to look back and ensure it has applied the R2T4 waiver for all students who fall under that assumption after the school's implementation date (e.g., March 13).
The school also needs to go back and check to see if it already has documentation that a student's withdrawal was COVID-related before the school's assumption method implementation date of March 13. If so, it must apply the R2T4 waiver even now. See AskRegs Q&A, How Do We Implement the R2T4 Waiver If We Are Re-Disbursing Aid We Already Returned Under the R2T4 Calculation?
According to ED, if the school had no indication the withdrawal was COVID-related before the school's implementation date, the school is not required to go back and collect attestations or apply the R2T4 waiver. Also, if a student now comes in and says his or her withdrawal back in spring 2020 was COVID-related, schools are not required to go back and apply the waiver; this is still the school's choice.
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.
Covered period refers to the fact that the May 15, 2020 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 national 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.
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.
The August 21, 2020 Electronic Announcement adds: "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."
While there is no consumer information requirement in the CARES Act or in ED guidance that forces schools to inform students of the school's ability to re-disburse Title IV aid, as a matter of good practice, NASFAA encourages schools to inform students of any policies and actions it takes in this regard.
This AskRegs Q&A was updated on August 26 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 17, 2020 to point out that on June 16, 2020, ED made changes to the May 15, 2020 Electronic Announcement, which now expands the terms and nonterm payment periods to which the return of Title IV funds (R2T4) waiver applies, as well as clarifies that the determination of COVID-19 related withdrawals are made on a payment period or period of enrollment basis.
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.