Department of Education Expands COVID-19 Regulatory Flexibilities for Title IV Programs; Announces Implementation of Executive Order for Continued Relief for Student Loan Borrowers | Faegre Drinker Biddle & Reath LLP

On August 21, 2020, the US Department of Education (ED) released a electronic ad extend the effective period for all previously issued regulatory relaxations related to the COVID-19 national emergency. These regulatory flexibilities were initially implemented by a series of earlier announcements from ED on March 5, April 3, May 15, July 9th and July 10. Pursuant to this latest announcement, except for certain matters discussed below, the effective period of all such regulatory flexibilities, including but not limited to the broad flexibilities provided to offer distance learning, now extends by the last of (1) the end of the Title IV federal student aid payment period which includes December 31, 2020; or (2) the end of the payment period that includes the end date of the federally declared COVID-19 emergency.

Exceptions to the general effective period above are as follows:

  • On-campus program match requirements: The CARES (Coronavirus Aid, Relief, and Economic Security) Act removed the institutional match requirement associated with the Federal Work-Study (FWS) and Federal Supplemental Educational Opportunity Grant (FSEOG) programs for the 2019-2020 award years and 2020-2021. Therefore, regardless of when the national emergency declaration is lifted, no institutional correspondence is required for either of these award years.
  • Leave without pay (LOA): ED extends the maximum duration of an LOA by 180 days to also include the number of additional days remaining in that calendar year. This flexibility includes students who are already on an approved LOA since the initial regulatory flexibility on LOAs was granted.
  • Return of Title IV Funds (R2T4): Institutions are not required to return Title IV program funds for any student who begins attending a payment period or enrollment period that includes March 13, 2020, or begins between March 13 and December 31 at later or the latest date on which the national emergency is in effect and subsequently withdraws from the period due to circumstances related to COVID-19. Standard term programs must use the payout period, i.e. half-year, quarter, or quarter, to calculate returns. Where an institution has elected to use the enrollment period to calculate its returns for a non-term or non-standard program, the waiver may apply to a student who begins attending a payment period that includes December 31, 2020 or the latest date on which the national emergency is in effect, and subsequently withdraws after the end of such payment period, but within the applicable registration period.
  • Foreign establishments: As provided by the CARES Act, the ED will permit the use of distance learning by foreign institutions offering Title IV eligible programs for the duration of a national emergency declared by the appropriate government authorities of the country in which the foreign establishment is located, through the payment period following the payment period or the interruption of payment periods during which the emergency declaration is lifted.
  • Academic calendars: Because it is often necessary for institutions to establish academic calendars that cover an entire academic year as opposed to a single payment period for federal Title IV student aid, ED believes it is appropriate to align the period so that related regulatory flexibilities coincide with the end of a program school year. Therefore, previously provided flexibilities regarding academic calendars, including standard semesters or terms comprising as little as 13 weeks, standard terms comprising as little as nine weeks, and standard overlapping terms, are extended to the end. the academic year that includes December 31, 2020 or the academic year that includes the end date of the federally declared COVID-19 emergency, whichever is later.
  • Reporting and auditing requirements: Until further notice, ED is extending all deadlines for financial statements and compliance audits by six months. The deadlines for Equity and Athletics Disclosures (EADA), Tax Transactions Report and Application for Participation (FISAP), and Campus and Fire Safety remain as outlined in the July 10, 2020, electronic announcement.

Still on August 21, 2020, ED officially announcement that, in accordance with President Trump’s decision August 8, 2020, Executive Order, payments on federal student loans for which the promissory note is held by ED will be automatically suspended until December 31, 2020. All accrued interest on these loans will also be forfeited and borrowers will not need to take any action to pursue the pointless pause. in payments. According to ED, collections on delinquent loans will also remain suspended until 2021, and all non-payments during this period will count towards the progression requirements of the Public Service Loan Forgiveness (PSLF) and the income-contingent reimbursement (IDR). Borrowers wishing to continue making payments on Covered Loans during the suspension period may still do so.

We continue to monitor developments from ED and other education regulators related to the COVID-19 pandemic.

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