Can We Make Emergency FSEOG Awards For the 2020-21 Award Year?

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This AskRegs Knowledgebase Q&A was updated on January 19, 2021 to point out that the January 15, 2021 Electronic Announcement retains the August 21, 2020 Electronic Announcement timeframe for schools to transfer unspent Federal Work-Study (FWS) funds into Federal Supplemental Educational Opportunity Grant (FSEOG) at any time through the end of the payment period that includes the end date for the federally declared emergency related to COVID-19. This is different than NASFAA's understanding of informal guidance provided by the U.S. Department of Education (ED) in mid-December.

Yes. Section 3503 of the CARES Act allows an institution to transfer up to 100 percent of its unexpended FWS allocation into its FSEOG funds (but not from FSEOG to FWS) during the period of the COVID-19 qualifying emergency. This includes unexpended initial and supplemental FWS fund allocations for both the 2019-20 and 2020-21 award years. Per ED, this ability to transfer FWS into FSEOG applies through the end of the payment period that includes the end date for the federally declared emergency related to COVID-19.

Institutions are then allowed to use any portion of their FSEOG allocation, including any funds transferred from FWS as noted above, to award regular FSEOG, Emergency FSEOG, or both. If the school awards the funds as regular FSEOG awards, regular FSEOG awarding rules in 34 CFR Part 676 and Volume 6 of the FSA Handbook continue to apply. If the school uses these funds to award Emergency FSEOG to students, special relaxed rules apply. See AskRegs Knowledgebase Q&A, How Can Schools Use Campus-Based Funds As Emergency Aid?

Unfortunately, according to guidance NASFAA previously received from ED, schools that are graduate or professional schools with no undergraduate programs (graduate-only schools), and that have an FWS allocation but no FSEOG allocation, cannot transfer unused FWS funds into FSEOG.

What does this mean, for example? If the qualifying emergency ends during the spring 2021 term/payment period, the school can continue to transfer FWS funds into FSEOG through the end of the spring 2021 term/payment period even after the qualifying emergency ends. In this example, this means the school can still make regular FSEOG or Emergency FSEOG awards for the entire spring 2021 term/payment period from those transferred funds.

Likewise, if the qualifying emergency ends during the summer 2021 term/payment period, the school can still transfer FWS into FSEOG through the end of the summer 2021 term/payment period and still make regular FSEOG or Emergency FSEOG awards with those transferred funds through the end of summer 2021. Etc. Remember however, it is premature to make Emergency FSEOG awards prior to the start of summer 2021 (or Fall 2021) given the cash management timeframe restrictions and the uncertainty as to when the qualifying emergency will end.

Other Considerations: There are some other things to consider before exercising this option:

See AskRegs Q&A, Can a School Transfer 100 Percent Of Its Unspent FWS Funds Into FSEOG Due To COVID-19?, for important details about transferring funds.

Emergency FSEOG funds are FSEOG funds, and the rules for awarding funds from the appropriate award year's allocation have not changed. Likewise, any unspent FWS funds that you transferred into your FSEOG account become part of that FSEOG account only for the award year in which they are transferred to make Emergency FSEOG awards. You can make 2020-21 Emergency FSEOG awards out of your 2020-21 FSEOG funds within the qualifying emergency timeframe.

Under existing regulations, you cannot use your 2019-20 award year FSEOG allocation to make FSEOG awards for the 2020-21 award year. The CARES Act does not change that general rule when it comes to Emergency FSEOG awards. However, under 34 CFR 676.18(c), "An institution may carry forward and expend in the next award year up to 10 percent of the sum of its initial and supplemental FSEOG allocations for the current award year." Once the FSEOG funds are carried forward from 2019-20 to 2020-21, they become part of the 2020-21 award year funds and must be spent in the 2020-21 award year. The funds that are carried forward to 2020-21 can be spent on Emergency FSEOG in the 2020-21 award year within the qualifying emergency timeframe.

See also, What Is the Definition Of a Qualifying Emergency Under the CARES Act? When the qualifying emergency ends, we will post an announcement in Today's News.

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.