What Happens When a Clock-Hour Student Returns Within 180-Days and the Coronavirus Indicator Has Already Been Set?

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Scenario: The student in a nonterm clock-hour program withdrew due to COVID-19. The Coronavirus Indicator was then set on eligible disbursements in the Common Origination and Disbursement (COD) System. The student later returns within 180 days.

Answer: Basically nothing, unless the school previously made an error when applying the R2T4 waiver and setting the Coronavirus Indicator.

If the student withdrew because of COVID-19 and qualified for the R2T4 waiver, the school was already required not to return any Title IV aid for that student for that payment period. If the school had already returned any Title IV aid, the school was required to reinstate that aid before setting the Coronavirus Indicator.

Normally, when a student withdraws from a clock-hour program and then reenters the same or similar program within 180 days, the student is treated as if the student never withdrew. All Title IV aid is therefore reinstated for the payment period. The student remains in the original payment period, and the cost of attendance (COA) must reflect the original educational costs associated with the payment period from which the student withdrew. The student keeps his, her, or their original Title IV aid for the original payment period and does not receive new Title IV aid for that payment period.

According to guidance NASFAA has received from the U.S. Department of Education (ED), if the R2T4 waiver and Coronavirus Indicator were applied correctly in the first place, there would be no Title IV aid to be reinstated or repackaged when the student returns within 180 days. Title IV funds were disbursed for the payment period and none of those funds should have been returned to ED. Furthermore, the student cannot be paid twice for the same clock hours and weeks of instructional time, and the student is not eligible for another Title IV disbursement until successfully completing the payment period to which he, she, or they returned.

The above guidance also applies to withdrawals from nonterm credit-hour programs and nonstandard-term credit-hour programs with terms that are not substantially equal and in which no term is less than nine weeks long. It also applies when the student reenters the same or similar program at the same school or at another school as a transfer student.  See Volume 5, Chapter 1 of the FSA Handbook for additional guidance on reentry within 180 days.

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.