Will Emergency Aid Be Treated As Other Financial Assistance Starting In 2024-25?

No. Effective with the 2024-25 award year, estimated financial assistance (EFA) will be renamed other financial assistance (OFA), and Section 480(i)(5) of the Higher Education Act of 1965 (HEA), as amended [20 USC 1087vv(i)(5), Amendment of Section] states: "Notwithstanding paragraph (1), emergency financial assistance provided to the student for unexpected expenses that are a component of the student's cost of attendance, and not otherwise considered when the determination of the student's need is made, shall not be treated as other financial assistance for purposes of section 1087kk(a)(3) of this title."

The U.S. Department of Education's (ED's) FAFSA Simplification Questions and Answers webpage clarifies:

"OFA-Q5: Under the FAFSA Simplification Act, emergency financial assistance is excluded from consideration as OFA when awarding Title IV funds. What constitutes emergency financial assistance to a student, and how should a school document it?

OFA-A5: Emergency financial assistance includes any payment of grant or loan aid to a student for unexpected expenses that are included in one of the components of COA, as defined under HEA Sec. 472. For example, payments can support any unexpected expense for food; housing; course materials or equipment; or transportation (e.g., between campus and home for a death or family emergency). Institutions determine whether an unexpected expense is associated with a COA component.

Prior to providing emergency financial assistance to a student, an institution should document the student’s request for assistance, including the unexpected expense that prompted the request. The institution should retain such documentation in the student’s file for the normal record retention period."

During the U.S. Department of Education's (ED's) webinar, The FAA's Role in FAFSA Simplification, ED stated that "[Y]ou may exclude emergency financial assistance provided to the student for unexpected expenses that are a component of the student's cost of attendance. The emergency does not have to be a federal or state declared emergency or disaster. Your school determines what is meant by an emergency for a specific student situation."

It is NASFAA's understanding that:

• The amount must be reasonable, as defined by the school;
• You cannot simply call a grant or scholarship emergency assistance in order to avoid treating it as OFA;
• Emergency assistance will include institutional emergency assistance (e.g., unexpected loss of housing, unexpected transportation costs, and other unexpected special circumstances that warrant emergency funds);
• Emergency assistance would not be the awarding of additional funds as a result of a professional judgment (PJ) adjustment within the school's normal procedures for making PJ adjustments; and
• Federal emergency assistance usually comes specifically designated as such.

Since ED specifically gives schools the flexibility and discretion to determine what is an emergency for a specific student situation, NASFAA encourages schools to make their own determinations and not to ask for further definition that will restrict other schools' ability to exercise their own flexibility and discretion. We do not expect additional ED guidance on this topic at this time. If/When we receive additional guidance, we will update this Q&A.