In response to pressing questions from institutions, on March 5, 2020, the U.S. Department of Education's office of Federal Student Aid (FSA) offered guidance permitting temporary flexibility and clarifying how higher education institutions whose activities are impacted by COVID-19 can continue to comply with Title IV of the Higher Education Act and its implementing regulations ("Title IV") . You can read our client alert on the guidance here.

On March 20, 2020, the Department updated the announcement to include answers to frequently asked questions. The guidance provided by the Department in the FAQ is summarized below. Institutions should consult the guidance directly for additional information about any of the below topics.

New Enrollments Eligible for Regulatory Flexibility

The March 5 guidance provided flexibility for schools to move to online instruction for currently enrolled students. The March 20 guidance extends this flexibility to newly enrolled or not yet enrolled students who begin on or before June 1, 2020. The Department will continue to monitor the situation and extend the timeframe for new enrollments, as appropriate.

Federal Work Study (FWS) Students

As long as the institution continues to pay its essential faculty and/or staff and continues to meet its institutional wage share requirement for the FWS program, it may pay students FWS funds for hours the students were scheduled to work, but could not work as a result of the COVID-19 outbreak. Students should be paid the wage rate that they would have been paid if they were able to work the scheduled hours. The institution must document the number of hours for which the student should be paid prior to making the payment, any actions that were taken regarding payment of FWS funds for scheduled hours that were not worked by the student, and that the COVID-19 disruption was the reason the student received FWS funds without documentation of hours worked. An institution may also allow the student to work by another means (on-line, remote, telecommute, etc.). However, the institution is not required to continue to pay all employees who had been working prior to the outbreak if it has discontinued certain operations as a result of COVID-19.

Students Studying Abroad

There is no prohibition on utilizing distance education to teach a U.S. student who is enrolled at a U.S. institution, but is participating in a study abroad program at a foreign school where the foreign school is either part of a consortium or has a written agreement with the student's U.S. institution. In such a case, either the home or host school may offer courses via distance learning and the student may continue to receive Title IV aid. The statutory prohibition on the use of distance education applies only to eligible foreign schools that enroll U.S. students who intend to earn a degree or certificate from that foreign school and are receiving Title IV assistance.

Closed Dormitories and Student Budget Adjustments

Institutions are not required to reevaluate a student's cost of attendance if, as a result of COVID-19 the institution issues a refund or waiver of expenses for all or part of a student's tuition, fees, room and board charges, or other institutional charges, or if the institution becomes aware that a student has moved off campus for the remainder of the term. As a result, no adjustment to the student's financial aid award is required for such changes.

Impact of Extended Terms on Loan Periods

Institutions that choose to extend terms that begin on or before June 1, 2020 as a result of the COVID-19 outbreak are not required to change loan period end dates if the loan period was scheduled to end on the term end date.

Clock Hour Programs – Clinicals

If a student's coursework or clinical is cancelled as a result of COVID-19 and the student is enrolled in a clock hour program, the Department will permit the institution to put the student on an approved leave of absence until the institution can resume coursework or can find another placement for the student. The institution must reasonably expect that it will be able to resume coursework and/or find a placement for the student. If the leave of absence exceeds 180 days, (or if the number of days in all of the student's approved leaves of absence in a calendar period has exceeded 180 days), the student must be considered withdrawn and a Return to Title IV calculation performed.

Clock Hour Programs- Online Format

An institution offering clock hour programs in a distance education format must ensure that each clock hour of instruction is supervised by qualified institutional personnel. An institution that offers asynchronous instruction in a clock-hour program must maintain an online learning platform or another system for monitoring each student's academic engagement to ensure that students are academically engaged in at least 50 minutes for each hour that is recorded as a clock hour attended by the student. Institutions must also ensure that any clock hour offered through distance education meets all applicable requirements set by accrediting agencies and States and fulfills applicable educational prerequisites for State licensure.

Return of Title IV (R2T4) – Class Suspensions and Extended Payment Periods

The timing of a student's withdraw will determine whether a school must recalculate R2T4 by including or excluding additional days. If a student withdraws before the change in the schedule, no revisions to the R2T4 calculations are required. However, in the case of a suspension of classes, if the student withdrew after the change in the schedule and the class suspension (or extended break) was for five or more days, then those days must be excluded from the R2T4 calculation. Similarly, if a student withdraws after a change is made to extend the payment period, the institution should use the number of days in the revised payment for R2T4 purposes.

Overlapping Terms

An institution that extends the length of a term to respond to COVID-19 causing an overlap in terms (for example, an extended spring term that overlaps with a summer term) will still qualify as a standard term allowing both the use of a scheduled academic year (SAY) for Direct Loan funds and Pell Grant Formula 1.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.