Evaluate how the CARES Act impacts your school.

The CARES Act, signed on March 27, 2020, provides temporary financial aid allowances to assist students during the pandemic. Here are the five most significant changes the financial aid department at your Christian college needs to be aware of.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed on March 27, 2020, providing important temporary financial aid allowances to assist students during the pandemic. Here are the five most significant changes that the financial aid department at your Christian college needs to be aware of:

1. Temporary Loan Relief

The CARES Act gave students temporary loan relief and did not require them to make any loan payments on existing loans through September 30, 2020. In addition, there were other loan benefits to assist the students.

2. Change to Temporary Distance Education (TDE) Approval

The most significant change for brick and mortar institutions is the temporary distance education (TDE) approval from ED. This allows institutions to get temporary approval, without meeting the normal requirements, from their accrediting agency and the state to teach online, until at least 12/31/2020 or until the pandemic is over.

3. Relief for Return of Title IV Funds (R2T4)

 The CARES Act gives “Return of Title IV Funds” (R2T4) relief to students who had to withdraw from school due to COVID-19 disruption of the delivery of education, due to a qualifying emergency. This allows the institution to waive the requirement to return funds resulting from an R2T4 calculation through at least 12/31/2020. The institution is still required to calculate the return and track the students qualifying for the waiver so that the information can later be reported to the Common and Origination Disbursement (COD) System. The reporting will then adjust the subsidized loan (SULA) and Pell grant lifetime eligibility (LEU).

Meanwhile, the institution is still required to perform the R2T4, make no adjustments to COD or the students account card, and process any post-withdrawal disbursement (PWD). The PWD loan funds can be disbursed without written permission from the student or parent, unless they don’t meet the normal loan requirements. If the funds were already returned and adjustments made to COD, the institution should draw down the returned funds from G5, credit the student account card, and disburse any credit balance to the student.

In general, all students can be considered for the R2T4 waiver if their education was disrupted due to temporary school closure, having to switch from a brick and mortar campus to temporary distance education, illness of family member or student, lack of child care, unable to learn online, no internet access, etc. Not every student will be eligible for a waiver and the school should ask for additional documentation from the student that was always attending a distance education program.

Students who withdraw due to COVID-19 will have their loans forgiven and reinstatement of Pell Grant for the payment period/period of enrollment. In addition, the R2T4 waiver also waives the grant overpayment as a result of the R2T4 calculation. Credit balances are required to be returned to the student within 14 days of the R2T4 calculation.

4. Changes to Use of Federal Work Study (FWS) funds and Federal Supplemental Educational Opportunity Grant (FSEOG) Funds

Both the 2019–2020 and 2020–2021 award year funds are to be used differently. For Federal Work Study (FWS) funds and Federal Supplemental Educational Opportunity Grant (FSEOG) funds, the institutional matching requirement has been waived. FWS funds can, in whole, be transferred to FSEOG as emergency FSEOG grant funds. Emergency FSEOG is not considered as estimated financial aid. The normal awarding requirements that FSEOG must be awarded to the neediest students first do not apply.

5. Change in Leave of Absence Requirements

The CARES Act waives the requirement that term-based students must return from an approved LOA at the same point in the program where the LOA began. The LOA tuition and fee component can’t be included in the cost of attendance (COA) for any subsequent term/AY. In addition, the credits associated with the coursework that a student is completing after the LOA in a subsequent term may count toward the student’s enrollment status.

Institutions without an approved LOA policy may adopt one, and must require all LOA requests be submitted in writing, with the reason for the leave, and approved prior to taking the LOA. An exception to the requirement that the student requests the LOA prior to taking it is if the school temporarily suspends classes and puts everyone on LOA, or the student took a LOA due to COVID-19; then the signed LOA request can be submitted after LOA has begun.

These are just some of the temporary changes allowed through the CARES Act. Others include flexibility in satisfactory academic progress (SAP), length of terms, overlapping terms for spring/summer, reporting requirements, audit deadlines, change in academic year, and fiscal reporting.

In addition, the Stimulus Act provided additional assistance through the Payroll Protection Plan (PPP), and Higher Education Economic Relief Funds (HEERF) which provided both student and institutional grant funds.


  • Sally Samuels

    Sally Samuels is the Director of Compliance at FAME, Inc. and one of the country’s leading authorities on Federal financial aid administration with more than 40 years of “in the trenches” experience. As a respected Industry leader, she is frequently called upon to speak at School, Accrediting, Regional and State conferences as well as to act as school liaison during program reviews and compliance audits. Having processed, reviewed and taught financial aid for over 38 years Sally’s experience includes representation at over 300 program reviews and certification visits for postsecondary institutions. In addition, Sally brings real life experiences, observations and illustrations to her audience, adding a touch of humor to regulatory compliance. Her style makes the sometime complex topics easy to understand and audiences always come away with practical knowledge that they can apply to their everyday situations. Sally is a board member for the Private Career Colleges & Schools (PCCS), a former board member and now serves on several committees for the American Association of Cosmetology Schools (AACS), as well as a member of NASFAA & SASFAA. Her experience and regulatory knowledge make her uniquely qualified to bring you the latest regulatory information and training.

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