Title IV Compliance: COVID-19 Considerations
Coronavirus disease 2019 (COVID-19) has rapidly evolved into a global health pandemic that’s affecting many day-to-day business operations. Higher education institutions aren’t immune to these business interruptions, and questions are quickly surfacing related to applicable Title IV compliance requirements. On March 5, 2020, the U.S. Department of Education (ED) released guidance on interruptions of study related to COVID-19. The guidance addressed many topics but most importantly covered key compliance issues related to interruptions on campus. Significant compliance topics examined in the guidance are summarized below.
Approved Leave of Absence
The ED permits students who wish to take a leave of absence (LOA) for COVID-19 concerns to take such leave. Standard LOA regulations for returning funds to students who fail to return still apply.
Students who are enrolled and performing Federal Work-Study (FWS) at a campus that must close due to COVID-19 or FWS students employed by an employer who must close due to COVID-19 can continue to be paid (even if not working) if the closure occurred after the beginning of the term. Document that COVID-19 disruption was the reason the student received FWS without documentation of hours worked.
Financial aid administrators are permitted to use professional judgment when students and/or their families have been affected by COVID-19. All standard professional judgment regulations apply, e.g., case-by-case basis, well-documented, support in student’s file, etc.
Satisfactory Academic Progress
Circumstances related to the COVID-19 outbreak may form the basis for a student’s satisfactory academic progress appeal. Circumstances include but aren't limited to illness of a student or family member and compliance with quarantine.
Students Who Didn’t Begin Attendance
In cases where a student couldn't begin attendance due to a COVID-19-related school closure, notifying the servicer of the student’s failure to begin attendance doesn’t apply. Accordingly, the institution shouldn’t notify the servicer that the student didn’t begin attendance.
Enrollment Status Changes
Requirements to award or disburse Title IV funds based on a student’s actual enrollment status don’t change.
Return of Title IV Funds
The requirement to return unearned Title IV funds remains unchanged. Scenarios for when an institution has temporarily ceased operation as a result of a COVID-19 disruption are provided below.
- Definition of Withdrawal Date: If an institution closes during the payment period and fails to reopen at the end of the payment period, its students are considered no longer in attendance and must be considered withdrawn for that payment period.
- Calculation of Period Length for Students Who Withdraw: An institution must exclude the number of days it was closed if the closure was for at least five consecutive days in combination with weekends or other scheduled breaks. If the school subsequently adds days, the calculation should be adjusted to reflect this.
National Student Loan Data System Enrollment Reporting
If an institution unexpectedly ceases operations during the payment period and fails to reopen during that payment period, the ED permits the institution to defer reporting students as “withdrawn” when the institution has a reasonable expectation that 1) it will reopen at the start of a payment period that begins no later than 90 days following the closure; and 2) the students will resume attendance when the institution reopens. In these cases, the institution should continue reporting the students’ most recent enrollment status.
For more information, view the ED’s recent guidance. In addition, the ED has established a website to provide general information, guidance and updates as this situation rapidly evolves. For questions or concerns, reach out to your BKD Trusted Advisor™ or use the Contact Us form below.