Updated Guidance as of 5/15/20

https://ifap.ed.gov/electronic-announcements/051520UPDATEDGuidanceInterruptStudyRelCOVID19May2020

 


 

IRS Releases Tax Guidance for HEERF Grants to Students as of 5/7/20


The Internal Revenue Service (IRS) has released tax guidance on HEERF emergency financial aid grants/payments to students which can be found here. The IRS indicates that payments to students under the CARES Act are not considered income and are therefore not taxable. Since the grants are not taxable these grants cannot be claimed for any tax deduction or credit.

 


 

ED Releases HEERF Interim Reporting Guidance as of 5/7/20

The Department of Education (ED) released interim guidance on how to meet HEERF reporting requirements which can be found here. ED indicates that it will be providing instructions on how to report more detailed information to the Secretary in the near future. In the meantime, 30 days from the date of the institution’s Certification and Agreement to participate, HEERF participating institutions are instructed to report the following on the institution’s primary website:

  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% of the funds received from CARES Act funding 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 for Emergency Financial Aid Grants to Students.
  3. The total amount of Emergency Financial Aid Grants distributed to students as of the date of submission.
  4. The estimated total number of students at the institution eligible to participate in Title IV, HEA programs and are therefore eligible to receive Emergency Financial Aid Grants under HEERF.
  5. The total number of students who have received an Emergency Financial Aid Grant to students under HEERF.
  6. The method used to determine which students receive Emergency Financial Aid Grants and how much they would receive under HEERF.
  7. Any instructions, directions, or guidance provided by the institution to students concerning the Emergency Financial Aid Grants.

 


 

ED’s Title IV Eligibility Requirement Disputed by Congressional Democrats as of 5/5/20


by Deb Agee, CASFAA VP Federal Issues

House and Senate Democrats are voicing their displeasure with the Department of Education (ED) guidance requiring Title IV eligibility for receipt of CARES Act funding. Both international students and students protected under the Deferred Action for Childhood Arrivals (DACA) program are therefore excluded from receipt of these funds. Over 500,000 students enrolled in higher education would be negatively impacted. An ED spokesman stated, “The CARES Act makes clear that this taxpayer-funded relief fund should be targeted to U.S. Citizens, which is consistently echoed throughout the law.”

Democratic lawmakers, however, beg to differ. Spearheaded by Sens. Michael Bennet (D-Colo.) and Bob Menendez (D-N.J), over 70 House Democrats signed a letter expressing their dismay at the Secretary’s interpretation of the law. The letter calls on the Secretary to reverse the decision stating:

“While some sections of the CARES Act contain explicit requirements that result in undocumented individuals being deemed ineligible for various aspects of non-education related relief, neither the Education Stabilization Fund nor the Higher Education Emergency Relief Fund contain such prohibitions, making it clear that eligibility for these funds should be at the discretion of each institution. The Department cannot project a specific prohibition from one section of the law to an unrelated and independent section of the law where Congress made no such prohibition.”

There is mass confusion and concern about which students are eligible to receive CARES Act funding and how best to determine their eligibility, which does not bode well for the intent of getting the money into students’ hands quickly. Decisions being made by institutions now are an exercise in risk management. On one end of the spectrum are those whose institutional leadership is risk averse. These institutions feel they cannot know for certain that a student is Title IV eligible unless that student files the FAFSA. On the other end of the spectrum are those institutions who are comfortable with taking some risk to get the funds into student’s hands as quickly as possible. These institutions are implementing short applications or affidavits for students who did not file the FAFSA.

While the debate swirls on eligibility for DACA students, reporting deadlines are fast approaching. Institutions that uploaded their Certification and Agreement for CARES Act April 7 – 10, will hit the 30 day mark this week. As of yet, there has been no guidance beyond what is stated in the law. Institutions must report to the Secretary 30 days from the date of the institution’s Certification and Agreement and then every 45 days after that. The key elements are:

  • How grants were distributed to students, Amount of each grant awarded to each student, 

  • How the amount of each grant was calculated, 

  • Instructions or directions given to students about the grants; and 

  • Document that the institution has continued to pay all of its employees and contractors during the period of any disruptions or closures to the greatest extent practicable, explaining in detail all specific actions and related decisions.