Can a Student Receive the CARES Act Withdrawal Benefits More Than Once?

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. NASFAA has confirmed with ED that a student can withdraw due to COVID-19 and receive the CARES Act withdrawal benefits multiple times. That said, the school might consider asking for more "robust documentation" from the student should that happen.

Under the CARES Act, if the student withdraws from a payment period or period of enrollment as a result of COVID-19, the student will receive the following withdrawal benefits, as noted by marking the Coronavirus Indicator on eligible disbursements in COD. ED will:

• Cancel the entire amount of any disbursement of a Direct Loan borrowed by the student or his or her parent for the payment period or period of enrollment, restoring eligibility for that disbursement amount;
• Exclude from a student’s Subsidized Loan usage (SULA) and Federal Pell Grant lifetime eligibility used (LEU) any payment period that the student does not complete due to a qualifying emergency; and
• Cancel TEACH Grants disbursements received by a covered student for the payment period or period of enrollment from which the student withdrew and restore grant eligibility for that amount.

It is possible for a student to withdraw due to COVID-19 during one term/payment period and then withdraw again due to COVID-19 during another term/payment period within the covered period (see below). When this happens, the student can receive the withdrawal benefits for both terms/payment periods.

According to ED, it is the school's decision as to whether it will accept a student's assertion that his, her, or their withdrawal was due to COVID-19. If the school finds a student repeating such behavior, "there is a reasonable person threshold beyond which a school might ask for more robust documentation."

For Example: The school treats summer 2021 as a header to the 2021-22 academic year. A student withdrew for reasons related to COVID-19 in the summer, and the school applied the R2T4 waiver by marking the Coronavirus Indicator in COD to indicate the Direct Loan disbursement for the summer loan should be cancelled. The student withdraws again in fall 2021 for COVID-19-related reasons.

According to ED, this is permissible. The student would be able to withdraw in summer, have the summer loan disbursement cancelled, and then return and borrow the full annual loan limit for fall-spring. Then, if the student withdraws due to COVID-19 again during the fall term, the fall disbursement would be cancelled, and the student could borrow the full annual loan limit during the spring 2022 term.

Once the school has determined that a loan disbursement will be cancelled due to CARES Act relief, it may exclude that loan disbursement from the student’s annual loan limit. The school does not need to wait for the NSLDS to be updated. The school may rely on its own records to determine that the loan disbursement will be cancelled. COD has been updated to prevent Direct Loan disbursements with the Coronavirus Indicator from counting toward a student’s annual loan limit and triggering edits that could result in the disbursement being rejected.

See also AskRegs Q&A, Can a Student Re-Borrow the Direct Loan Amount That Was Cancelled During the Same Academic Year Due To COVID-19?, which also addresses transfer students.

Covered period refers to the fact that the May 15, 2020 Electronic Announcement 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 last date that the national emergency is in effect.

Per the June 14, 2023 Electronic Announcement, this waiver concludes at the end of the payment period or period of enrollment that includes the date of May 11, 2023. Because different programs at the same institution may have different payment periods, this waiver may end at different times for those programs. For example, assume that an institution offers Programs A and B. Both programs have spring terms that include May 11, 2023, but Program A’s term ends on May 26 while Program B’s term ends on June 9. In that situation, this waiver ends for Program A on May 26, while the same waiver ends for Program B on June 9.

Update Notes:

• This 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 ended on May 11, 2023. With the introduction of two separate emergency end dates, it was unclear at the time which date was to be used for the expiration of the above COVID-19.
• This AskRegs Q&A was previously updated on December 2, 2020 to include additional guidance from the U.S. Department of Education (ED), indicating that the school does not need to wait for the National Student Loan Data System (NSLDS) to be updated before restoring annual loan limits to an affected borrower.