NAICU Washington Update

Department Unofficially Defines “Student” for CARES Act Eligibility

June 12, 2020

After weeks of delay, and a bit of administrative and legal drama, the Department of Education has finally posted the unofficial text of the Interim Final Rule (IFR) on student eligibility for CARES Act emergency grants.
The IFR states: For purposes of the phrases “grants to students” and “emergency financial aid grants to students” in sections 18004(a)(2), (a)(3), and (c) of the CARES Act, “student” is defined as an individual who is, or could be, eligible under section 484 of the Higher Education Act (HEA), to participate in programs under title IV of the HEA.
The department makes the case for using Title IV eligibility using legislative cross-references, and goes on to underscore that non-qualifying aliens do not qualify for such grants under any interpretation of “students.”  Additionally, because federal agencies cannot issue retroactive regulations in the absence of express statutory authority and because the CARES Act does not provide such authorization, the department’s publishing of these regulations would not affect institutions that have already awarded emergency grants to students who might not meet the Section 484 requirements.
One of the greatest areas of confusion regarding the CARES Act for colleges and universities has been the challenge of trying to understand which students are eligible to receive emergency grants.  The confusion has particularly centered on the eligibility of DACA and international students, but it also extends to other populations, including many American citizens.
After initially making no restrictions on which students would be eligible for emergency grants, the department, later in April, issued further guidance stating that only students who would otherwise be eligible for federal student aid programs under the HEA could receive a CARES Act emergency grant.  This did not mean that students had to have already applied for aid, but that they must meet the definition of an eligible student under Section 484 of HEA.
A few weeks later, however, the department confused the matter by issuing a statement that “guidance documents lack the force and effect of law.” This strange turn of events added to the confusion about what schools were supposed to be doing to be in compliance with the law and any future auditing or program review requirements.  
When the new IFR is published in the Federal Register, it will clearly eliminate international and DACA students from receiving CARES emergency grants.  However, lingering questions remain about determining eligibility.  For example, Section 484 also excludes other students from receiving federal student aid, such as male students who have not registered for the draft or students who have certain drug offences, low grade-point averages, or have committed student aid fraud.
Adding to the complexity of the eligibility criteria is a lawsuit filed in May by the California Community College system challenging the right of the department to restrict the eligibility of students who could receive funding.  This week, the case went before the courts.  The judge in the case expressed deep skepticism of the department’s arguments on restricting eligibility to students who otherwise qualify and indicated the court was leaning toward ruling for the community colleges. Of particular interest to the judge was the fact that the department had been so slow in publishing a regulation, particularly given that the money was supposed to be for emergency grants for students in crisis.  It is widely viewed that this week’s court case was the impetus for the department finally getting out its rule. 
In the meantime, nearly all of the student emergency funding has been provided to colleges, who are doing their best to decide which of their students are most in need and the most equitable ways to distribute the funds.

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