Education Department Extends COVID-19 Regulatory Flexibilities for Title IV Programs; Announces Implementation of President’s Executive Order for Continued Student Loan Borrower Relief

On August 21, 2020, the U.S. Department of Education (ED) issued an electronic announcement extending the effective period for all previously issued regulatory flexibilities related to the COVID-19 national emergency. Those regulatory flexibilities were initially implemented through a series of earlier announcements from ED on March 5, April 3, May 15, July 9 and July 10. Under this latest announcement, except for certain topics addressed below, the effective period of all of those regulatory flexibilities, including but not limited to the broad flexibilities provided to offer distance education, now extends through the later of (1) the end of the Title IV federal student aid payment period that includes December 31, 2020; or (2) the end of the payment period that includes the end date for the federally-declared emergency related to COVID-19.

The following are exceptions to the above general effective period:

• Campus-based programs’ matching requirements: The Coronavirus Aid, Relief, and Economic Security (CARES) Act waived the institutional match requirement associated with the Federal Work-Study (FWS) and Federal Supplemental Educational Opportunity Grant (FSEOG) programs for the 2019-2020 and 2020-2021 award years. Therefore, irrespective of when the national emergency declaration is lifted, no institutional match is required for either of these award years.
• Leaves of absence (LOA): ED is extending the maximum duration of an LOA from 180 days to also include the number of additional days remaining in this calendar year. This flexibility includes students who are already on an LOA approved since the original 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 attendance in a payment period or period of enrollment that includes March 13, 2020, or begins between March 13 and the later of December 31 or the last date that the national emergency is in effect, and subsequently withdraws from the period as a result of COVID-19-related circumstances. Standard term programs must use the payment period, i.e., semester, trimester, or quarter, to calculate returns. Where an institution has opted to use the period of enrollment to calculate its returns for a non-term or non-standard term program, the waiver may apply to a student who begins attendance in a payment period that includes December 31, 2020 or the last date that the national emergency is in effect, and subsequently withdraws after the conclusion of that payment period but within the applicable period of enrollment.
• Foreign institutions: As provided in the CARES Act, ED will permit the use of distance education by foreign institutions offering Title IV eligible programs for the duration of a national emergency declared by the applicable government authorities in the country in which the foreign institution is located, through the payment period following the payment period or the break between payment periods during which the emergency declaration is lifted.
• Academic calendars: Because it is frequently necessary for institutions to establish academic calendars that cover an entire academic year as opposed to a single Title IV federal student aid payment period, ED believes it is appropriate to align the period for related regulatory flexibilities to coincide with the end of a program’s academic year. Therefore, the previously provided flexibilities related to academic calendars, including standard semesters or trimesters consisting of as few as 13 weeks, standard quarters consisting of as few as nine weeks, and overlapping standard terms, are extended through the end of the academic year that includes December 31, 2020, or the academic year that includes the end date for the federally-declared emergency related to COVID-19, whichever occurs later.
• Reporting and audit requirements: Until further notice, ED is extending all financial statement and compliance audit deadlines by six months. Deadlines applicable to Equity and Athletics disclosures (EADA), the Fiscal Operations Report and Application to Participate (FISAP), and Campus and Fire Safety remain as outlined in the July 10, 2020, electronic announcement.

Also on August 21, 2020, ED officially announced that, pursuant to President Trump’s August 8, 2020, Executive Order, payments on federal student loans for which the promissory note is held by ED will be automatically paused through December 31, 2020. All interest accruals on such loans also will be waived, and borrowers need not take any action to continue the interest-free pause in payments. According to ED, collections on defaulted loans also will remain suspended until 2021, and all non-payments during this time will count toward Public Service Loan Forgiveness (PSLF) and income-driven repayment (IDR) progress requirements. 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 regulatory authorities related to the COVID-19 pandemic. Should you have questions regarding these or other educational regulatory matters, please do not hesitate to contact any member of our Education team or your usual contact at Faegre Drinker.