This guidance is not award-year-specific and applies across award years.
This AskRegs Knowledgebase Q&A was updated to include the latest guidance about the end date of the following COVID-19 waiver or flexibility in the June 14, 2023 Electronic Announcement (GENERAL-23-46).
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 the 2019-20, 2020-21, and 2021-22 award years, as well as a portion of the 2022-23 award year.
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 has 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.
End Date of this COVID-19 Flexibility: Per the June 14, 2023 Electronic Announcement, the above flexibility now ends on the earlier of June 30, 2023, or the last day of the payment period that includes May 11, 2023. For example, if May 11 falls during the spring 2023 term/payment period for the academic program, the school can continue to transfer FWS funds into FSEOG through the end of the spring 2023 term/payment period, unless June 30 comes before the end of the term/payment period. If May 11 falls between terms, the ability to transfer funds ended on the last day of the term that ended prior to May 11 (or June 30, whichever comes first).
After that date (whichever applies), you can no longer transfer unspent FWS funds into FSEOG using the COVID flexibility and will revert back to normal use of funds rules in Volume 6 of the FSA Handbook. And, if you've already transferred more than 25% of your FWS funds to FSEOG under the COVID flexibility, you don't get to transfer an additional 25% after that date.
If the school used transferred FWS funds under this flexibility to make regular FSEOG awards, those awards must be made to students by the applicable end date. In other words, the funds must be transferred and awarded by the end date; then, late disbursement rules under 34 CFR 668.164(j) apply to regular FSEOG disbursements.
If the school used transferred FWS funds to award Emergency FSEOG funds, those awards must be made and disbursed before the applicable date; schools may not award or disburse Emergency FSEOG funds on or after that date. In other words, the funds must be transferred, awarded, and disbursed before the end date. See AskRegs Q&A, When Do the Various Title IV COVID-19 Flexibilities and Waivers End?
See AskRegs Q&A, When Do the Various Title IV COVID-19 Flexibilities and Waivers End?
Remember the General Cash Management Rules: According to ED, the FWS "transfer" occurs when the debit of funds occurs from G5 into the school's institutional FSEOG account, not when the school makes the policy decision that it is going to transfer up to 100 percent of the unspent FWS funds. In other words, if the school draws down its unspent FWS funds from G5 directly into its FSEOG institutional account, then that is when ED considers those funds to be "transferred" into FSEOG for CARES Act purposes. The key is the date when you transfer the FWS funds into FSEOG funds, not the date you decide to implement the CARES Act flexibilities and not the date you complete the FISAP.
Also, because of excess cash rules in 34 CFR 668.166, the school cannot simply draw down the entire FWS allocation from G5 and deposit it into the school's FSEOG account unless those funds will be disbursed to students as regular FSEOG or Emergency FSEOG within three business days. Another cash management tolerance also applies, the school may maintain for up to seven days an amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The school must return immediately to ED any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the seven-day tolerance period.
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.
© 2023 NASFAA. All rights reserved.