Here’s to Your Health… Insurance

The past few days have seen a series of records for highest number of new cases of COVID-19 in Florida. Each day the curve rises, and the picture is fairly clear: we have not yet hit a plateau of cases in Florida.

Source: New York Times (retrieved 6/20/2020)

At the same time, many colleges and universities (in Florida, and indeed all over the country) are beginning to announce their plans for Fall. Among others, UF and FSU have announced plans that will bring students back to campus, although both schools plan to not require students to return to campus in large numbers after Thanksgiving. Other schools, like Stetson University and the University of Tampa, have announced changes to their Fall calendars (either delays in opening, or moving up opening) to allow for a modified Fall semester. And finally, some schools like Valencia College and St. Petersburg College have announced that they will have a very limited number of classes on site in the Fall, and that most classes will remain online.

There are as many colleges and universities as there are plans for reopening. In part this is due to a lack of a clear sense of what’s coming for us in this pandemic, and – at the same time – students seem to be picking up on this confusion. In a recent study conducted by the Florida College Access Network, 42% of current college students surveyed indicated that their plans have changed for their education past high school; some are taking a semester or a year off, some are starting sooner than planned, and some are transferring to another school. At the same time, nearly 1 in 4 parents of high school juniors and seniors indicated that their children’s plans for life after high school have changed: 31% have postponed their plans, 27% have switched to an option closer to home, and 22% have switched to a less expensive option.

At the same time, the survey reveals that those with a high school degree or less are the most impacted by the economic difficulties that have come along with the pandemic. 64% of those with a high school diploma or less reported job loss, pay cuts, or reduced work hours, while at the other extreme, only 50% of those with a bachelor’s degree (and 40% of those with a master’s) reported the same difficulties.

In this environment, a focus on health matters. There is a correlation between job loss and education level (and the ability to telework), and we know that social distancing is the best way to control spread. We also know that health insurance can make a difference when a test is medically necessary. But what is health insurance? Why do you need it? What if you can’t afford it? And why did so many candidates for President argue about it?

Health insurance is another kind of protection for situations that you aren’t expecting. While we won’t go through every different kind and option of health insurance today (you can read more about all of this here), we do want to look at two options: employer-sponsored health insurance and the Affordable Care Act (also called the ACA or Obama-care).

The law changed in 2010, and children can remain on their parents’ insurance plans until they are 26, so chances are many of you are covered by your parents, but once you turn 26 you will need to find your own coverage.

Generally a health insurance plan will require you to pick a primary care physician. This doctor will coordinate care for you and help you find specialists when more advanced care is required. The benefit of a health insurance plan is that you will have coverage in case things go wrong with your health (without insurance you may have to pay a large amount for your care). The downside of health insurance is that you often can’t just see who you want without getting approval first through your Primary Care doctor.

In addition, many health insurance plans have co-pays, deductibles, co-insurance, and maximum out-of-pocket costs. What are all of these?

  • A co-pay is the amount you will pay immediately out of pocket to see a doctor or specialist. The amount varies by your plan, but generally runs between $10 and $50 per visit depending on the level of specialty, or could be up to $100 or more for an emergency room visit.
  • A deductible is the amount of money in total that must be paid for health care services before your insurance covers your expenses. Usually the deductible does not apply to your primary care physician visits but to other types of care.
  • Co-insurance kicks in after your deductible. This is a percentage of costs that you must pay as your insurance pays the other portion. For example, if your plan has a co-insurance requirement of 20%, then you pay that 20% of the cost and the insurance company pays the other 80%. This will hold true until you pay your out-of-pocket maximum.
  • An out-of-pocket maximum represents that maximum total cost you will have to pay before your health insurance will cover 100% of any remaining costs for you.

All of these reset each year, so it is important to understand where you are as you plan your care. As an example, let’s say that you are in an accident and require hospitalization for a week. The bill arrives and with medical care, surgery, anesthesia, and all other expenses, the total cost is $110,000. Usually your health insurance has negotiated rates which are better than the regular rates you would get if you walked off the street without insurance, so let’s say this drops immediately to $65,000 because of these negotiated rates. Your insurance has a $100 co-pay for Emergency Rooms, $500 deductible, a 20% co-insurance, and a $5,500 maximum out-of-pocket. Well, you would have to pay the $100 co-pay and then the $500 deductible which is $600. The remaining cost is $64,400 and 20% of that is $12,880 which is way above your maximum out-of-pocket. Since you already paid a $100 co-pay, and a $500 deductible, your maximum additional cost would be $4,900 (your $5,500 max minus $600 already paid). In this case you would have paid a total of $5,500 for the equivalent of $110,000 worth of care. Good thing you had health insurance. In addition, any additional expenses you had for the remainder of your coverage year would be covered at 100% because you have already paid your maximum out-of-pocket for that year; this would all reset the next year when your coverage begins again.

Of course, the other way you pay for insurance is when you pay your monthly premiums. Health insurance is not free although some employers may pay some, part, or all of your monthly costs. If you have an employer-offered health insurance program, chances are that your employer is paying a significant part of the cost for you as a benefit. In addition, any amount you pay as a monthly premium is deducted from your salary prior to paying taxes, so you get to count this as tax-free income.

There are other ways to save money on health care expenses like Health Savings Accounts and Flexible Spending Accounts, and we will cover these at another time.

What if you aren’t working or you want to look at other options? The site provides information on the plans that are available through the ACA, and could be less based on your income and family size. Take a look because as you know now, we always want to protect ourselves against the unexpected.

Speaking of expecting the unexpected, what is your college or university planning to do regarding reopening? Are you changing your educational plans this fall? Or are you adopting a “wait and see” approach? Moneyman want to know, so clue me by adding your comments at the top of the post!

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. 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.

If it is on the Internet, it must be true (CARES Act update)

So not everything you read on the Internet is true. I know. Shocker.

Yoda, Kermit, it’s all the same…

Some things on the Internet need to be taken with a fair amount of disbelief. Almost an approach of “trust, but verify“.

So I can understand if you might not believe what I am about to tell you when it relates to the HEERF Funds from the CARES Grant. There is a lot of information on the Internet! And a lot of it is true! (Or as true as the most recent update).

Colleges and universities are required by the Department of Education to provide updates 30 days after receiving HEERF Funds and every 45 days thereafter. According to guidance issued by Federal Student Aid on May 6, 2020, colleges must post the following information to their publicly facing websites within 30 days of receiving their funds:

  1. An acknowledgement that the institution signed and returned to the Department the Certification and Agreement and the assurance that the institution has used, or intends to use, no less than 50 percent of the funds received under Section 18004(a)(1) of the CARES Act to provide Emergency Financial Aid Grants to students.
  2. The total amount of funds that the institution will receive or has received from the Department pursuant to the institution’s Certification and Agreement [for] Emergency Financial Aid Grants to Students.
  3. The total amount of Emergency Financial Aid Grants distributed to students under Section 18004(a)(1) of the CARES Act as of the date of submission (i.e., as of the 30-day Report and every 45 days thereafter).
  4. The estimated total number of students at the institution eligible to participate in programs under Section 484 in Title IV of the Higher Education Act of 1965 and thus eligible to receive Emergency Financial Aid Grants to students under Section 18004(a)(1) of the CARES Act.
  5. The total number of students who have received an Emergency Financial Aid Grant to students under Section 18004(a)(1) of the CARES Act.
  6. The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under Section 18004(a)(1) of the CARES Act.
  7. Any instructions, directions, or guidance provided by the institution to students concerning the Emergency Financial Aid Grants.

Number 4 in this list is interesting since it assumes that colleges are following the guidance that students who receive CARES Grants must be 484 eligible, when we know that recent guidance removes this restriction (or, at least, says that the department will not enforce this restriction).

For you as students this represents finally an opportunity for you to learn exactly how your school plans to spend its CARES Grant allocation. It is information you can believe from the Internet.

For example, if you are a student at UCF, you can see from the University of Central Florida’s website that their application period closed on May 19, and that they plan on awarding funds based on the 21,669 applications received. UCF is awarding different amounts to Pell eligible students vs. non-Pell eligible, and to date (5/23/2020), they have awarded $0.

On the other hand, Valencia College’s CARES Grant page shows that their application window opens tomorrow (June 1) for the approximately 28,000 students who will be eligible for CARES funds. Valencia is requiring a FAFSA and is awarding students for both Spring and Summer terms. Valencia is also requiring an application for funds.

Rollins College has already distributed its entire CARES Grant allocation according to their webpage. Their awards ranged from $500 to $3,000 per student.

So if you are curious to learn how your college is giving away their CARES Act money, then do a search on their web page for “CARES Grant” or “CARES Act”. You will undoubtedly learn some interesting information about how the process is working for your school.

As a matter of public interest, moneyman has started a Google Doc with a list of colleges and universities and their website for CARES reporting. Feel free to add your college or search for a college or university’s page there.

Three paragraphs that changed the world…

IMPORTANT NOTE: Yup! You guessed it. The guidance in this post was contradicted by later guidance from the Department of Education. See here for the most recent guidance. This post is left as it was originally published for historical purposes (and because, who knows, we may be back here again).

Well, sometimes, despite your best efforts, the world changes around you, And it happened tonight… Again…

Hello rug. Goodbye everything you thought you knew…

Tonight at about 7:00, the Department of Education published the following three paragraphs on their CARES Act / Higher Education Emergency Relief Funds page throwing a big curve ball into what we thought we knew:

Updated statement 5/21/2020:The Department has stated on its guidance portal that “guidance documents lack the force and effect of law.” See U.S. Department of Education’s Guidance Homepage, (“Guidance documents represent the ED’s current thinking on a topic. They do not create or confer any rights for or on any person and do not impose any requirements beyond those required under applicable law and regulations. Guidance documents lack the force and effect of law.”); compare, e.g., OPE Guidance Documents, (“Guidance documents lack the force and effect of law.”). On February 26, 2020, the Department published a Federal Register notice stating this principle along with an announcement of the existence and location of its guidance portal. Notice of Guidance Portal, 85 Fed. Reg. 11056, The statement applies to all of the Department’s guidance except as authorized by law or as incorporated into a contract.

This includes, for example, the statements in response to question 5 of the Higher Education Emergency Relief Fund Institutional Frequently Asked Question document located here and question 9 of the HEERF Student FAQ document located here explaining that only students who are or could be eligible to participate in programs under Section 484 in Title IV of the Higher Education Act of 1965, as amended, may receive emergency financial aid grants. HEERF Institutional FAQs at 2, HEERF Student FAQs at 4. The Department will not initiate any enforcement action based solely on these statements because they lack the force and effect of law. In contrast, the underlying statutory terms in the CARES Act are legally binding, as are any other applicable statutory terms, such as the restriction in 8 U.S.C. § 1611 on eligibility for Federal public benefits including such grants.

In addition, the Department reiterates its guidance that although emergency financial aid grants under Section 18004(c) of the CARES Act may only be given to those who are or could be eligible to participate in programs under Section 484 in Title IV of the Higher Education Act of 1965, as amended (HEA), but emphasizes that that guidance is specific to the distribution of emergency financial aid grants and does not apply to the use of HEERF institutional allocations to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus. The Department continues to consider the issue of eligibility for HEERF emergency financial aid grants under the CARES Act and intends to take further action shortly.

So what does this mean? Remember what I said about having to be eligible for section 484 of the Higher Education Act? Just kidding. The Department of Education has been facing lawsuits about narrowly interpreting the actual language from the CARES Act so they re-positioned. What they are saying is that their guidance still stands, but they are not enforcing it. So basically schools do not need to follow this rule. Anyone who is enrolled is qualified to receive CARES Grant (sort of like I said at first).

Except (new wrinkle) you have to be a US Citizen or Eligible Non-citizen to qualify (in other words, you cannot be undocumented or international). This is the reference to 8 U.S.C. § 1611 which specifically prohibits “an alien who is not a qualified alien” (their words, not mine) from receiving public benefits (like the CARES Act HEERF money. So, this money can only be awarded to US Citizens or Eligible Non-citizens.

Except (see paragraph 3) when it comes to the institutional portion of the funds. Money that an institution spends out of its allocation in emergency grants still have to follow these (amended) rules, but if an institution is doing something that doesn’t directly give cash grants to students (like paying for online services, or buying laptops), undocumented and international students can qualify for these programs.

Oh, and by the way, they are still working on more guidance.


So what is a student to do? Check with your school and see where they are in the process. If you were not eligible before because of SAP, defaulted loans, or some other 484 issue, ask again. Oh, and be kind to your financial aid officer. They just had the rug pulled out from under them.

Coming Back to a New Normal (and Leaving Behind the Old One)

States are beginning to reopen. Restaurants in some areas have moved to 25% or 50% capacity, some retail establishments that have been shuttered are starting to make steps towards a new shopping experience, and (in the major Orlando-area news) theme park shopping areas (like Disney Springs and Universal Citywalk) are starting to allow guests to shop and dine.

You might be curious – when are colleges and universities opening?

(Image courtesy of

It might be a while.

What we do know: most colleges and universities are holding courses this summer in virtual mode (in fact, moneyman hasn’t heard of any college operating face-to-face classes this summer). And most colleges have yet to announce a phased reopening of their campuses (although many colleges have begun internal discussions all about reopening).

If the local K-12 school district isn’t opening in the Fall, it would be extremely unlikely that the campus would hold classes (keep in mind, faculty and staff have kids that need some place to go during the day). Even if face-to-face classes resume, it is likely that there will be an increased number of online courses, and that the in person classes will have announced contingency plans if (and when) a second wave of infections occur and a new quarantine needs to be implemented either locally or nationally.

So what does this mean for you (the student) about your plans for the Fall? If you are a continuing student and you are commuting to school from a local residence, not much will change. You may have all online courses, or you may have a limited lab course, but otherwise things will look much like they did at the end of the Spring term. If you live far way from campus, or you are a first-time student heading off to school in the Fall, it is time to think about your back-up plans. Are yo comfortable if all Fall classes are online and you are still at home? What if residence halls don’t open for the Fall? Will you stay near home or find an apartment near the university? Before you commit to the cost of a residence hall or dining plan, what protections has the institution put in to manage your costs and expenses if there is a need to close down again?

None of these considerations are pleasant to think about, but all are important. And colleges and universities will likely be announcing their Fall plans in the next few month as we all wait to see how the opening of states impacts the infection rates locally and nationally.

While we are talking about announcements, we need to mention the breaking news from the Department of Education on Friday night: the release of more guidance for college and university financial aid staff on parts of the CARES Act. You will remember that in a previous post, we considered the impact of the CARES Act, and discussed how there were many parts of the Act for which there was no guidance yet. We have some now, and it is pretty OK for students (it is a little confusing for Financial Aid Officers, but that is why moneyman is here for you!).

Some important parts of the guidance:

  1. Colleges and universities have been authorized to offer classes online or in virtual mode (distance education) through the Fall term of 2020. Normally this would have to be approved by an accreditor, but this requirement is waived.
  2. It may be hard for some students to get proof of high school completion (which can be an admissions requirement and a requirement for some students in verification). In the case the student cannot get this information, the financial aid office can accept a signed and dated statement from the student instead of formal documentation
  3. HEERF Funds through the CARES Act are not taxable income for students.
  4. A reminder of the option to offer Leaves of Absence to students, and how to treat financial aid when a student returns to a program after a Leave of Absence.
  5. For students who withdrew from all classes during the Spring term, the start of guidance on the treatment of Return to Title IV (waiving the requirement that the college return Federal funds to the government if the student withdrew before the 60% point of a semester). The most helpful part of the guidance for students is that the Department has said that for students whose classes changed from in-person to online, any withdrawal after the point at which the mode of instruction changed will count as related to COVID-19. This means that for students who had to withdraw, there will be no financial penalty.
  6. Guidance on SAP, and specifically how to treat courses from which a student withdrew during the emergency. Since Satisfactory Academic Progress is a requirement of financial aid eligibility, and specifically a student’s completion rate (number of credits earned divided by the number attempted), this guidance makes sure that students won’t be penalized for having to withdraw from courses this past Spring.
  7. TEACH Grant clarifications for teachers who move from full-time to part-time or are let go due to the pandemic so that their service counts when measured against the service requirements for this grant.

NASFAA has done a great job of evaluating the guidance and raising some additional questions (for those of us who work in financial aid). While we have some answers provided, there are still lots of questions left so that we can best meet the needs of students during this unusual time.

Speaking of unusual times, what are you doing now with your summer? What are you thoughts about the Fall? When do you think your school will reopen? How do you feel about the reopening? Moneyman is here so let’s start a dialogue!

When it rains, it doesn’t just pour… (More CARES Act News)

IMPORTANT NOTE: The guidance in this post was contradicted by later guidance from the Department of Education. See here for the most recent guidance. This post is left as it was originally published for historical purposes.

…Sometimes it seems like it might be a hurricane.

More television coverage than the Weather Channel

One day this week in moneyman’s hometown it rained. More than rain, it felt like a torrential downpour. Thunderstorms, tornado watch, lightning flashes and even some small hail. And that was just from some of the phone calls I was part of on Tuesday! The bad weather came through later in the week!

On Tuesday, the Department of Education released more information on the CARES Act emergency funding for students and institution (they have also started to refer to this funding by the name Higher Education Emergency Relief Fund – or HEERF – so we will be too). The information that was released contradicted some of the guidance that had been issued before (including the guidance I shared on the blog). So here is the latest update. Keep in mind this guidance is our best understanding at this time and could be contradicted by later issued guidance.

  • Although previous announcements indicated no limitation on which students could receive HEERF funds (“Recipient retains discretion to determine the amount of each individual emergency financial aid grant…” from the agreement), new guidance in the FAQs shows that the Department does not want international students or DACA / Dreamers to qualify for this funding.
  • To qualify for HEERF funding, students must have completed or been eligible to complete the FAFSA (and also meet all conditions for financial aid eligibility under section 484 of the Higher Education Act [HEA]). We’ll talk below about what that means, but for now it is important to know that if you want to qualify for this money you will need to complete the FAFSA.
  • Students who qualify for HEERF funding will receive this money as a cash grant from their school; the school cannot use the money to pay for tuition or school charges, although once you receive the funding, you can do what you want to do with it (including sending it back to the school to pay for your charges if you so desire).
  • Students who were exclusively enrolled in online programs will not qualify for HEERF funding. This does not eliminate students in online courses, just those for whom their entire program is online.

So you may be asking: moneyman, why do I care about any of this? Here’s why: if you have been impacted by the fact that your school’s campus(es) had to close and your classes have had to move exclusively online (and who hasn’t been impacted), you could qualify for a grant to help with your living expenses during this time. Remember from the CARES Act, the point of this $12B program (half of which was to go directly to students) was “to provide emergency financial aid grants to students for expenses related to the disruption of campus operations due to coronavirus (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care, and child care).”

So how do you qualify? Wit the guidance provided on Tuesday, many schools are going to require that you file your FAFSA (or have already done so) and (as I said before) meet the requirements under section 484 of the HEA. What are those requirements? According to NASFAA’s COVID-19 HEERF page, these include:

  • Be enrolled or accepted for enrollment in a degree or certificate program. 
  • Not be enrolled in elementary or secondary school.
  • For currently enrolled students, be making satisfactory academic progress.
  • Not owe an overpayment on Title IV grants or loans.
  • Not be in default on a Title IV loan.
  • File “as part of the original financial aid application process” a certification that includes
    • A statement of educational purpose.
    • Student’s SSN.
  • Be a U.S. citizen or national, permanent resident, or other eligible noncitizen.
  • Have returned fraudulently obtained Title IV funds if convicted of or pled guilty or no contest to charges. 
  • Not have fraudulently received Title IV loans in excess of annual or aggregate limits.
  • Have repaid Title IV loan amounts in excess of annual or aggregate limits if obtained inadvertently.
  • Have Selective Service registration verified.
  • Have Social Security Number verified.
  • Not have a federal or state conviction for drug possession or sale, with certain time limitations.

Most of these items are covered by just filing a FAFSA and being an enrolled student, so if you are eligible to file a FAFSA and haven’t yet done so, you should now! Notice it says nowhere above that you have to have “financial need” for the funds. The HEERF funding is meant for “everyone” – as long as you aren’t an international or DACA / Dreamer student.

If you get the sense that moneyman is disappointed in this, you would be correct. It is very frustrating that the government added this limitation more than a week after the initial release of guidance which said none of this. I imagine many schools already had made plans on how to share this funding with all students regardless of citizenship status, and now they have to rework their plans (and come up with ways to support the students who don’t qualify under the new rules but still have significant needs.

So how do you ask for this money? This is going to depend by school. At some schools, you won’t have to ask; a small number of schools may just provide money to students who qualify. Most colleges are likely to have an application you will need to complete in order to request funding. FIU’s application is already live (although you must be able to log into their portal to see it). UWF already has their application live as well, although unlike FIU you will need to provide back-up documentation to support your request for funding.

From moneymman’s research, while some schools may ask for back=up documentation, many will just accept your application and your certification as your indication of your need for funds. These will likely be “small” grants (somewhere in the range of $500 to $1000) so many schools may not want to make it too difficult for students to apply. (And I know how ridiculous it is to say that $500 is “small” but when the Pell Grant is over $6000 at its maximum, this is much smaller in comparison)

So be kind to your schools if they haven’t placed their application online yet. We all just got final guidance on Tuesday. It’s been raining ever since.

“The greenbacks are coming, the greenbacks are coming…”

IMPORTANT NOTE: The guidance in this post was contradicted by later guidance from the Department of Education. See here for the most recent guidance. This post is left as it was originally published for historical purposes.

With apologies to Paul Revere. He was much more concerned with the Redcoats (aka the British). Today, we’re much more focused on the “greenbacks” – aka the moolah, the Benjamins, the bread, the dough, (I could go on like this for a while) – or to put it simply, the money.

“And the money came riding in…”

As in, when will the money from the CARES Act (which I discussed here) and how will students apply for it and receive it?

Well, your friend moneyman has some answers, and lots of questions. Here goes!

On Thursday afternoon, Secretary of Education, Betsy DeVos, released a letter to college presidents (and copied to Directors of Financial Aid and Chief Financial Officers) nationwide explaining that the Department of Education was putting a priority on delivering 1/2 of the Emergency Stabilization Funds that were promised by the CARES Act to schools. Which half? The half that is going to students!

If you remember, this money has to be spent on students to help with expenses related to their education moving online (from the Act – “…expenses related to the disruption of campus operations due to coronavirus (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care, and child care).”)

So how much will colleges receive? Take a look at the list provided by the Department of Education to find your school to see how much your school is receiving (and remember that the list is in school code order). The list shows both the total allocation as well as the amount specifically for students. If you are interested to see how these amounts were calculated, you can find the answer here.

The amounts are large here, but what does it mean for an individual student? So while the agreements that schools have to sign to receive this money (and the money will be available as soon as Wednesday) are also published, there are very few limitations on how the school can award this money.

For example, students don’t have to file a FAFSA to qualify. You don’t have to show financial need, and you don’t even need to be a US Citizen (or Permanent Resident). These funds can be awarded by schools to any attending student therefore, and in addition any amount awarded doesn’t have to follow the normal rules for overaward (or scholarship displacement). So the money gets to go straight to the student and will have no impact on other financial aid.

There is also no limit or requirement placed on the amount of the award which a school can make for a student (although the Secretary recommends no more than the Pell Grant maximum – currently $6,195). The funds must be spent by the college within one year of the date they sign the acknowledgement form.

So to go back to the main question, how do students apply for these funds?

The Secretary doesn’t specify and schools can choose their own process. Schools can also decide how they want to apply these funds (tuition, technology costs, fees, textbooks, etc). This means that for students you are going to need to speak with your individual financial aid office to find out how they are planning on offering this aid, and that there may be a delay while your school figures it out.

At moneyman’s college we are carefully examining the rules and options for these funds and will probably have a combination of some kind of online application for funds, and some categories where we will automatically award funds to students. We will hope to have some decisions in the next week.

So if you are a student, and you need some emergency funds, moneyman’s best advice right now is to be in touch with your school’s financial aid office and let them know that you have need for funds. Ask if you can be placed on a waiting list, or if there is some kind of application you can add your name to. There will be more information coming from your school, you can be sure!!

In the meantime, what other questions do you have?

Pound the Alarm (Coronavirus CARES Act)

Mad props to Nicki Minaj. That’s it. No other reason. Just love for her.

OK, well, I will say that if there is a big alarm bell for higher education, we pounded it these last few weeks! “Somebody call 911… shawty fire burning on the dance floor”. Never mind, that’s Sean Kingston.

Doesn’t matter what you call it; we’re in pretty urgent times. Can we all just hit snooze?

Regardless of the background music you have running in your head right now, it is pretty clear that we are in emergency times. Last week, the US Congress passed (and the President signed) the CARES Act (the “Coronavirus Aid, Relief and Economic Security Act”), also known as the $2 trillion relief package. There are some pretty important parts of this law and today’s post is going to review them (and what might have impact for you). If you want to read along in the final text of the law, feel free to do so — you can find the text here. Just keep in mind that the final bill is 335 pages long; I’ve picked out the important pieces for you and for higher education below.

First let’s talk about the individual taxpayer checks that are coming. Under Section 2201 of the Act (pages 55-60), a new program called “Recovery Rebates for Individuals” is created. Under this program, most taxpayers will be getting a stimulus check in the amount of up to $1200 per adult (with income caps) and $500 per child under the age of 17 in the household. CNN has a pretty handy calculator to determine how much you can expect in your stimulus check. Remember, this is based on your 2019 Adjusted Gross Income (if you already filed your 2019 Federal Income Tax Return) or your 2018 return. Since I know you read every blog entry with care, just a reminder that you can learn a lot more about Federal Taxes by visiting this section of the blog.

The next big item is the amount of Emergency Grant funds for colleges and universities. The Act sets aside about $12.5B in emergency funds for institutions to help students during this crisis; you can find the rules for this under Section 18004 (pages 287-288) of the Act. These funds can be used in the following manner: 1/2 MUST be used to help offset student expenses by providing direct grants to students, while the other 1/2 CAN be used to offset the institution’s expenses in moving to online education (including technology, payroll, etc). Individual colleges will see large amounts of money directed to them under this program; the American Council on Education ran an estimate of how much they think colleges will each receive (based on enrollment, Pell participation, and other data). These numbers are estimates only, but as an example USF (Main Campus) is expected to receive $29.5M, UCF to receive $47.6M, Miami-Dade College to receive $47.4M, Broward $27.5M, and so on. To be clear, these are only estimates and no final rules have yet been shared by the Department of Education (nor do we as colleges have this money yet since the law was just signed Friday) but we know that whatever comes this will be very helpful for you, our students.

And the bill goes on from there. Below I am going to highlight some sections of the bill, page numbers, and a brief description of the relief coming from this part of the Act. All of these are higher education changes:

  • Section 3503 (page 116) – waivers of matching requirements for schools for Campus Based Fund (SEOG and FWS). This means that schools do not have to match Federal awards in these programs with their own dollars (it has been a 75/25 match) allowing schools to use this money in other ways to help students. This waiver is for two years (2019/20 and 2020/21).
  • Section 3504 (pages 116-117) – use of Supplemental Education Opportunity Grant (SEOG). This section allows colleges and universities to use the funds awarded to them by the Feds in SEOG to now help both undergrads and grad students and to ignore the previous rules about awarding order (reserving this money for those who have Pell Grants first).
  • Section 3505 (page 117) – paying Federal Work Study (FWS) students. This section specifically allows schools to pay their FWS students if the campus has to close (although online classes are still being offered) and students cannot work any longer on campus.
  • Section 3506 / 3507 (page 118) – for students who withdraw, ignoring usage limits. Pell Grants and Subsidized Loans have aggregate limits so that once you use your limits, you can’t have any more Pell (or Subsidized Loans). Under this section if you withdraw during the period of national emergency, the Pell or Subsidized Loan you received won’t count against your limits.
  • Section 3508 (pages 118-119) – Institutional refunds and loan flexibility. Again this section is for students who withdraw during this emergency. Under this section, neither institutions nor students would have to return unearned aid to the government (like we usually do if you don’t attend at least 60% of the term). In addition, if a student withdraws, the amount of any Federal loan borrowed for that period would be cancelled.
  • Section 3509 (page 119) – Satisfactory Academic Progress. This section says that for students who withdraw due to the emergency, colleges can ignore the courses that they have withdrawn from in determining their completion percentage (which has to be above 66.6%).
  • Sections 3510, 3511, 3512 (pages 119-124). These cover foreign institutions, emergency waivers, and HBCU capital financing. Important for these schools, but not relevant to many of you students.
  • Section 3513 (pages 124-125) – Federal student loan relief. Under this section, Federal student loan interest rates are set to 0% and no payments are required for 6 months (until September 30, 2020). In addition, all forms of collection (wage garnishment, reducing tax refunds or other federal benefits) are halted.

There are some other Higher Ed sections but they are mainly technical (pages 125-130). The only one that may interest some of you is the waiver of teaching service for those receiving the TEACH grant during this time.

Sooooo…… lots of changes. When does this all go into effect?? Well technically as of the day the law was signed but we usually get some guidance from Federal Student Aid at the Department of Education on how to implement changes. We have no guidance or announcements yet on the CARES Act so stay tuned. There is a lot more to come.

For now, ask your questions. I’m sure you have some. I can’t promise answers but I will sure try!!

Why the sudden interest in my interest? (Coronavirus Update 2)

It has been quite a week. I’m sure you feel the same. I’m trying to balance my need to be updated constantly with the latest news with a desire not to be constantly inundated with what’s going on.

Last night I took a break and watched a great old movie. It was just the break I needed; light and comedic, and just fun. What are you doing to try to find time to balance? What tricks are you using if you are working out of the home (in a gas station, restaurant, grocery store) to relax, and if you aren’t able to work right now, what relaxation tip works for you? I’m interested!

Right now it may be hard to find balance. How are you doing it?

Speaking of interest, today’s update focuses on some interesting news: what is happening with student loan interest. As you may be aware, the President has put a temporary hold on interest for all Federally held educational loans (this includes Direct Subsidized Loans (in repayment), Direct Unsubsidized Loans, Direct PLUS Loans (both for parents and for graduate students) and Direct Consolidation Loans.

But what does this really mean for student (and parent) borrowers? And what do you need to do in order to make sure that your loans are taken care of during this crisis? Well, moneyman has you covered.

According to the announcement by Secretary of Education, Betsy DeVos, interest on education loans held by the Federal government will be set to 0% for a period of at least 60 days. This means that for students still in school, interest will not accrue for their Unsubsidized Loans. For students in repayment, their loans will still have the same monthly payment amount, but their regular monthly payment will be applied entirely to their principle.

For borrowers in repayment, there is an ability to suspend repayment by asking for a forbearance. This means that (especially if you are struggling right now or need some relief for payment) you can qualify for a suspension of payments and during the time of that suspension of payment no interest will accrue. You must request a forbearance from your servicer (the company that processes your payments); don’t simply stop making payments (although borrowers who are 31 days late or more will automatically be placed on forbearancee). If you are possibly going to qualify for Public Service Loan Forgiveness you also don’t want to stop making payments since you need to have 10 years of repayment (120 months) to qualify.

Well interest keeps on building in student loan interest so here is some breaking news. As I was working on this post, some details are coming out about the $2 trillion stimulus package passed today by Congress. According to CNN, the law includes a provision suspending student loan payments without payments for 6 month (through September 30). Stay tuned for more details as we know them. Another article specifies a few other financial aid related items which are part of this bill: 0% interest during these 6 months, the ability to keep unspent Pell Grant or student loans due to withdrawals, and the waiver of any penalties for further financial aid due to these withdrawals.

More information will be coming I am sure. For now, though, let me know how you are finding balance in these days. I will be watching some silly old comedies.

This Corona (update) is for you…

Hello all,

What a strange world we are all living in! Just a week and a day ago, I was writing you about credit history and how it impacts loans. I was on Spring Break (as I am assuming some of you were) and I was watching the news about the Coronavirus situation. I was looking forward to being back on campus and I had a few conference trips planned in the next few months

Our strange new world!

How quickly everything changes. I am now working from home, managing moving all our employees home and making sure they have access to work remotely, coordinating financial aid delivery to our students from our individual personal residences, supporting our students who were not prepared to move completely online with their coursework (and their faculty who were also not prepared), and doing it all with grace, patience, and love.

So, you might be wondering what does this all mean for you? Great question. This will be my first Coronavirus update post, but I am sure not my last. This is a time when I really mean it. I know you have lots of questions. Ask them. I want to help you, but I don’t know what your questions are until you ask them.

Here are some of the things I imagine you want to know right now.

  1. What’s happening with my financial aid? All of your financial aid offices are moving their operations off of their campuses and planning on working remotely. This means that there may be a delay for things to get “back to normal”. I know at my campus we had to institute a one-week hold on financial aid refunds because we needed the time to get people set up. If you are expecting a refund and it is delayed, give the office a week (extra) and then if you haven’t heard anything call or email them.
  2. What happens with my Federal Work Study (FWS) job? In situations like this, colleges and universities are given the option to pay their students for the hours they were scheduled to work if the campus is closed and no one can come in to work. This doesn’t mean that every college or university will choose this option, so you want to find out what your school plans to do. If you had a job which was paid for by institutional funds (and not FWS), then the school will decide if they want to pay you; there is no Federal guidance for this.
  3. What happens to my financial aid if I withdraw / if my study abroad trip is cancelled? All good questions. BE careful about withdrawing; if you leave all of your classes too early in the term you may owe some of your financial aid money back. In addition, remember the conversation we had about SAP; one things schools have to measure is the percentage of classes you earn of those you attempt. This means if you withdraw too many times you might put your future financial aid in jeopardy (of course you could appeal if this happens, but be careful!). If your study abroad program is cancelled you want to talk to your school to see if they are planning to refund your costs and not consider you enrolled or if they have some kind of distance learning program they are offering to make up the difference in credit hours for you.
  4. What if I need help with issues like getting Wifi, paying for food and housing, or other emergency situations? Your college or university likely has a list of emergency resources available to students. In central Florida, Valencia College has created a curated list of sources for emergency help.
  5. What if I lost my job / my parent(s) lost their job? If you have an emergency situation and need financial support, talk to your financial aid office. Many schools have emergency aid programs to help with small cash grants to help in urgent situations. Also a college may be able to perform a “professional judgment” and change your FAFSA information if appropriate to grant you more financial aid. Be prepared to document your situation (copies of your “lay off” notice or other information).

So if you have more questions, ask. I know there is a lot of moving pieces here, so I will try to update as I know more. Together we will get through all of this.