Jk Jk (The CARES Act Returns)

In today’s cancel culture, maybe you’ve heard of JK JK? And, no, I’m not talking today about JK Rowling’s ridiculously offensive tweetstorm (although you could message me and we could have a WHOLE conversation about that).

Just kidding on the “just kidding”

So, Philip J. Fry, pay attention. Jkjk means just kidding on my previous just kidding. And guess what friends? That’s what’s happening with the Student Eligibility rules for CARES Grant funds. The Department of Education just let us know they are about to issue a new rule that says “just kidding” on their previous “just kidding”.

For those of you who might need a refresher, here is where we are so far:

  1. The CARES Act is signed into law by the President on March 27, 2020. As part of the law, the Higher Education Emergency Relief Fund is created, with $12B of relief funds for students. The law is silent on who specifically is eligible for these funds. We first published a review of the act on April 1.
  2. On April 9, the Department publishes the agreements and amounts of funding which would be available under the HEERF. The agreement says that schools “…[retain] discretion to determine the amount of each individual emergency financial aid grant consistent with all applicable laws including non-discrimination laws.” Other than that reference, there is no limitation from the Department on who is eligible for these funds. We covered this on the blog on April 11.
  3. On April 21, the Department issues some FAQs related to the CARES Act at the same time as they issue the agreements for the institutional portion of the funding, and for the first time (in the answer to question 9) mention that students would have to be eligible for Title IV Financial Aid to be eligible to receive HEERF / CARES Grant funds. We covered this on the blog on April 26.
  4. On May 21, the Department says “jk” and issues three paragraphs which says that their previous guidance doesn’t have the force of law, and that while they will enforce the restriction on undocumented students receiving HEERF funds, they will not enforce the restriction on Title IV eligibility. We discussed this on the blog on May 21.
  5. And this brings us to today. As of last night, the Department has indicated that they are about to release an Interim Final Rule in which they will announce that they are planning on enforcing the restrictions on Title IV eligibility effective once the regulations are published in the Federal Register (in other words, “jkjk”).

So where does this leave us? Great question!!

As of the day this is published in the Federal Register, the rule goes into effect. As of that point, schools must follow the rules that state that only students who are or could be eligible for Title IV financial aid (in other words eligible under section 484 of the Higher Education Act) are able to receive HEERF grants. This means that students who are looking for funds will need to file a FAFSA (or if a school chooses to allow it, fill out a self-certification form saying that they meet all eligibility rules).

What are the rules? According to the Interim Final Rule, this includes:

…(1) enroll or be accepted for enrollment in a program leading to a recognized credential at an eligible IHE and not enrolled in elementary or secondary school (2) if presently enrolled, be maintaining satisfactory academic progress (3) not owe a refund on a Federal student grant or be in default on any Federal student loan (4) submit a Statement of Educational Purpose (5) are a U.S. citizen, National or eligible noncitizen (6) not have been convicted of, or plead nolo contendere or guilty to, a crime involving fraud in obtaining federal student aid (7) have a high school diploma or its equivalent (8) have a valid social security number (9) register with the Selective Service (if required) (10) not been convicted of any offense under any Federal or State law involving the possession or sale of a controlled substance for conduct that occurred during a period of enrollment for which the student was receiving Federal student aid.

https://www2.ed.gov/about/offices/list/ope/caresactifreligibility6112020.pdf page 28, footnote 7

The largest issue for students may be SAP. We’ve talked about SAP before, but for students who have failed SAP and either didn’t appeal, or didn’t previously apply for financial aid so there was no impact, a bad SAP status could be a deal-breaker for HEERF eligibility. If you are one of these students, you should get a SAP appeal turned in immediately.

The other issue is what constitutes a student. There are two main questions here: are students who graduated or withdrew in Spring still eligible for funds, and are students eligible if they are enrolled in educational programs which are not eligible for financial aid? The answer to the first question is unclear; this was not addressed by the Department in its guidance. The answer to the second question is “no”; the Department clearly says that if your educational program is not eligible, then you aren’t eligible (page 30 reads, “Some programs at title-IV eligible institutions, primarily shorter training courses such as first responder training certificate programs, do not participate. Students enrolled in such programs will not be eligible for the emergency financial aid grants.”).

So where does this leave us? Many schools have already given out the majority of their CARES Funds. Do they have to go back and take it away from anyone they gave it to who might now not be eligible? The good news is a resounding “no” to this question, as long as they restricted the funds to US Citizens and Eligible Non-citizens. The Rule specifies (page 20 footnote 6), “Nor will the Department enforce the title IV eligibility interpretation announced in this rule against distribution of HEERF funds that occurred prior to the publication of this rule.” Keep in mind the publication of the rule is when it appears in the Federal Register so any distribution prior to that point is not subject to enforcement.

So for schools that have already given out most or all of their funds, they do not need to reconsider funds already expended. But for schools that were waiting for guidance, or who have money left to award, we are back to square 1 (or was that square 3 actually).

If you are a student, and you don’t know what to do, check in with your financial aid officer. Search your college’s webpage to see what they have published about their CARES awarding process. But try to be patient with us. The rules have changed yet again, and we are all trying to digest them.

And a final reminder… Until this is actually published in the Federal Register, NOTHING IS FINAL. This is all (you guessed it) subject to change. In other words, watch this space for the “JkJkJk” post.

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